PSV 1982 Limited v Sean Anthony Edward Langdon

PSV 1982 Limited v Sean Anthony Edward Langdon

Section 217 IA 1986, on its natural and ordinary meaning, imposes personal liability on a director for relevant debts of a company established in proceedings against the company, even if the director was not a party or privy to those proceedings, provided the statutory requirements are met. The relevant debt or liability is incurred at the time of breach of contract, not when the contract is entered into.

Parties
Claimant/respondent: PSV 1982 Limited; Defendant/appellant: Sean Anthony Edward Langdon
Jurisdiction
England and Wales
Judgment Date
12 October 2022
Procedural Posture
Civil Appeal / Appeal From High Court Judgment on Preliminary Issues
Outcome
Appeal dismissed
Legal Topics
Personal Liability of Directors, Phoenix Companies, Statutory Interpretation, Section 216 and 217 Insolvency Act 1986
Insolvency Law Company Law Personal Liability of Directors Phoenix Companies Statutory Interpretation Section 216 and 217 Insolvency Act 1986

Case Brief

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Parties

PSV 1982 Limited

Claimant/respondent

Sean Anthony Edward Langdon

Defendant/appellant

Procedural Posture

Civil Appeal / Appeal From High Court Judgment on Preliminary Issues

Legal Issues

  1. 1 Whether section 217 Insolvency Act 1986 automatically imposes personal liability on a director for a company debt established in proceedings to which the director was not a party or privy
  2. 2 When a 'relevant debt' or liability is incurred for the purposes of section 217(3)(a) IA 1986—at contract entry or breach

Ratio Decidendi

Section 217 IA 1986, on its natural and ordinary meaning, imposes personal liability on a director for relevant debts of a company established in proceedings against the company, even if the director was not a party or privy to those proceedings, provided the statutory requirements are met. The relevant debt or liability is incurred at the time of breach of contract, not when the contract is entered into.

Court Disposition

Appeal dismissed

Orders

  • The appeal is dismissed on all grounds.