Jetivia SA & Anor v Bilta (UK) Ltd & Ors [2013] EWCA Civ 968 (31 July 2013)

Jetivia SA & Anor v Bilta (UK) Ltd & Ors [2013] EWCA Civ 968 (31 July 2013)

The Court held that the ex turpi causa principle does not bar a company's claim against its own directors or third parties for conspiracy, dishonest assistance, or breach of fiduciary duty where the company is the victim of the wrongdoing. The fraudulent acts and knowledge of the directors are not attributed to the company for the purpose of defeating such claims. The company retains its right to recover losses from those who have defrauded it, including its own directors and dishonest assistants. The appeal was dismissed and the claims were allowed to proceed.

Citation
[2013] EWCA Civ 968
Parties
Appellant/6th Defendant: Jetivia S.A.; Appellant/7th Defendant: Urs Brunschweiler; Respondent/claimant: Bilta (UK) Limited (in liquidation); Respondent/claimant: Kevin John Hellard (liquidator of Bilta (UK) Ltd); Respondent/claimant: David Anthony Ingram (liquidator of Bilta (UK) Ltd)
Jurisdiction
England and Wales
Judgment Date
31 July 2013
Procedural Posture
Civil Appeal / Appeal From High Court (chancery Division) to Court of Appeal
Outcome
Appeal dismissed
Legal Topics
Attribution of Directors' Acts, Ex Turpi Causa Non Oritur Actio, Dishonest Assistance, Conspiracy, Fraudulent Trading, Breach of Fiduciary Duty
Company Law Insolvency Law Equity and Trusts Tort Law Attribution of Directors' Acts Ex Turpi Causa Non Oritur Actio Dishonest Assistance Conspiracy +2 more

Case Brief

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Parties

Jetivia S.A.

Appellant/6th Defendant

Urs Brunschweiler

Appellant/7th Defendant

Bilta (UK) Limited (in liquidation)

Respondent/claimant

Kevin John Hellard (liquidator of Bilta (UK) Ltd)

Respondent/claimant

David Anthony Ingram (liquidator of Bilta (UK) Ltd)

Respondent/claimant

Procedural Posture

Civil Appeal / Appeal From High Court (chancery Division) to Court of Appeal

Legal Issues

  1. 1 Whether Bilta's claims against its directors and third parties are barred by ex turpi causa due to the company's involvement in VAT fraud
  2. 2 Whether the acts and knowledge of Bilta's directors should be attributed to the company so as to defeat its claims against them and third parties
  3. 3 Whether section 213 of the Insolvency Act 1986 applies to foreign defendants

Ratio Decidendi

The Court held that the ex turpi causa principle does not bar a company's claim against its own directors or third parties for conspiracy, dishonest assistance, or breach of fiduciary duty where the company is the victim of the wrongdoing. The fraudulent acts and knowledge of the directors are not attributed to the company for the purpose of defeating such claims. The company retains its right to recover losses from those who have defrauded it, including its own directors and dishonest assistants. The appeal was dismissed and the claims were allowed to proceed.

Court Disposition

Appeal dismissed

Orders

  • The applications to dismiss or strike out Bilta's claims against the appellants are refused.
  • The claims for conspiracy, dishonest assistance, and under section 213 of the Insolvency Act 1986 are allowed to proceed.