ESS Production Ltd (In Administration) v Sully

ESS Production Ltd (In Administration) v Sully

A company need not carry on all its business under a single prohibited name for the exception in rule 4.230 to apply; it is sufficient if the company carries on part of its business under a prohibited name during the qualifying period. The use of the acronym 'ESS' in business activities, including on products and communications, meant the company was 'known by' a prohibited name for the purposes of rule 4.230. Accordingly, the director could rely on the exception and was not personally liable under section 217.

Parties
Appellant: ESS Production Ltd (In Administration); Respondent: Sully
Jurisdiction
England and Wales
Judgment Date
11 May 2005
Procedural Posture
Civil Appeal / Court of Appeal Judgment on Appeal From County Court
Outcome
Appeal allowed; cross-appeal dismissed.
Legal Topics
Phoenix Companies, Director Liability, Prohibited Names, Statutory Interpretation
Insolvency Law Company Law Phoenix Companies Director Liability Prohibited Names Statutory Interpretation

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 4 Authorities cited 11 Party arguments 2 Amounts and remedies 1
Sign in to unlock

Parties

ESS Production Ltd (In Administration)

Appellant

Sully

Respondent

Procedural Posture

Civil Appeal / Court of Appeal Judgment on Appeal From County Court

Legal Issues

  1. 1 Whether the director could rely on the third excepted case in rule 4.230 of the Insolvency Rules 1986 to avoid personal liability under section 217 of the Insolvency Act 1986 for debts incurred by a company with a prohibited name.
  2. 2 Whether the company was 'known by' a prohibited name for the qualifying period under section 216(6) and rule 4.230.

Ratio Decidendi

A company need not carry on all its business under a single prohibited name for the exception in rule 4.230 to apply; it is sufficient if the company carries on part of its business under a prohibited name during the qualifying period. The use of the acronym 'ESS' in business activities, including on products and communications, meant the company was 'known by' a prohibited name for the purposes of rule 4.230. Accordingly, the director could rely on the exception and was not personally liable under section 217.

Court Disposition

Appeal allowed; cross-appeal dismissed.

Orders

  • The appeal is allowed; the judgment against Mr Sully is set aside.
  • The cross-appeal by the respondent is dismissed.