Northampton Borough Council v Cardoza & Ors [2019] EWHC 26 (Ch) (24 January 2019)

Northampton Borough Council v Cardoza & Ors [2019] EWHC 26 (Ch) (24 January 2019)

The court found that D1 and D2, as directors, failed to justify the receipt and application of substantial sums from NTFC, did not properly account for or record such payments, and acted in breach of their statutory and fiduciary duties. The transfer of D2's interest in Cheriton to D3 was found to be a transaction...

Source-derived case information.

Citation
[2019] EWHC 26 (Ch)
Parties
Claimant: Northampton Borough Council; First Defendant: Anthony Michael Cardoza; Second Defendant: David Anthony Cardoza; Third Defendant: Christina Loraine Cardoza
Jurisdiction
England and Wales
Judgment Date
24 January 2019
Procedural Posture
Civil Claim (chancery Division) / Final Judgment After Trial
Outcome
Claim allowed in substantial part
Legal Topics
Breach of Directors' Duties, Transaction at Undervalue, Restitution, Fraudulent Conveyance, Assignment of Claims
Company Law Insolvency Law Equity and Trusts Breach of Directors' Duties Transaction at Undervalue Restitution Fraudulent Conveyance Assignment of Claims

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Parties

Northampton Borough Council

Claimant

Anthony Michael Cardoza

First Defendant

David Anthony Cardoza

Second Defendant

Christina Loraine Cardoza

Third Defendant

Procedural Posture

Civil Claim (chancery Division) / Final Judgment After Trial

Legal Issues

  1. 1 Whether the defendants breached their statutory and fiduciary duties as directors of NTFC by misapplying company funds
  2. 2 Whether the transfer of D2's interest in Cheriton to D3 was a transaction at an undervalue intended to defraud creditors under s.423 Insolvency Act 1986
  3. 3 Whether the defendants are liable to account for or restore monies received from NTFC

Ratio Decidendi

The court found that D1 and D2, as directors, failed to justify the receipt and application of substantial sums from NTFC, did not properly account for or record such payments, and acted in breach of their statutory and fiduciary duties. The transfer of D2's interest in Cheriton to D3 was found to be a transaction at an undervalue intended to put assets beyond the reach of creditors, contrary to s.423 Insolvency Act 1986. The court ordered an account, restoration of assets, and other relief as appropriate.

Court Disposition

Claim allowed in substantial part

Orders

  • Inquiry as to dealings by D1 with £2.05 million received from Oundle and 1st Land and what remains of that sum
  • Account of what is due from D1 and D2 in respect of breaches of fiduciary duties and payment thereof