Flatman v Wiles & Anor [2019] EWHC 3338 (Ch) (13 December 2019)

Flatman v Wiles & Anor [2019] EWHC 3338 (Ch) (13 December 2019)

The District Judge was entitled to find that Mr Flatman had the requisite subjective desire to prefer himself as a creditor, given his knowledge and actions regarding the payments. The appeal against the finding of preference under section 239 is dismissed. However, the District Judge failed to identify the specific duty breached under section 212 or make the necessary findings of fact, so the appeal against the finding of breach of duty under section 212 succeeds.

Citation
[2019] EWHC 3338 (Ch)
Parties
Appellant (respondent Below): Paul Flatman; Respondent (applicant Below): Benjamin John Wiles; Respondent (applicant Below): Paul David Williams
Jurisdiction
England and Wales
Judgment Date
13 December 2019
Procedural Posture
Appeal / Judgment on Appeal From District Judge Rouine's Order Dated 17 June 2019
Outcome
Appeal dismissed in respect of section 239 preference finding; appeal allowed in respect of section 212 breach of duty finding.
Legal Topics
Preference Payments, Director's Duties, Misfeasance, Breach of Fiduciary Duty, Section 239 Insolvency Act 1986, Section 212 Insolvency Act 1986
Insolvency Company Law Preference Payments Director's Duties Misfeasance Breach of Fiduciary Duty Section 239 Insolvency Act 1986 Section 212 Insolvency Act 1986

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Parties

Paul Flatman

Appellant (respondent Below)

Benjamin John Wiles

Respondent (applicant Below)

Paul David Williams

Respondent (applicant Below)

Procedural Posture

Appeal / Judgment on Appeal From District Judge Rouine's Order Dated 17 June 2019

Legal Issues

  1. 1 Whether payments made by the company to Mr Flatman constituted preferences under section 239 of the Insolvency Act 1986
  2. 2 Whether Mr Flatman breached his duties as a director under section 212 of the Insolvency Act 1986

Ratio Decidendi

The District Judge was entitled to find that Mr Flatman had the requisite subjective desire to prefer himself as a creditor, given his knowledge and actions regarding the payments. The appeal against the finding of preference under section 239 is dismissed. However, the District Judge failed to identify the specific duty breached under section 212 or make the necessary findings of fact, so the appeal against the finding of breach of duty under section 212 succeeds.

Court Disposition

Appeal dismissed in respect of section 239 preference finding; appeal allowed in respect of section 212 breach of duty finding.

Orders

  • Declaration that Mr Flatman acted in breach of duty as a director is set aside; remaining parts of the District Judge's order stand.