The Secretary of State for Business, Energy And Industrial Strategy v Lummis & Anor [2021] EWHC 1501 (Ch) (04 June 2021)

The Secretary of State for Business, Energy And Industrial Strategy v Lummis & Anor [2021] EWHC 1501 (Ch) (04 June 2021)

The defendants, as directors, caused the company to enter into substantial transactions for their own benefit after the company had ceased trading and was insolvent, and while aware of a significant risk of substantial tax liabilities to HMRC arising from the EDF Scheme. Their conduct demonstrated a disregard for the interests of creditors, particularly HMRC, and amounted to unfitness under section 6 of the Company Directors Disqualification Act 1986.

Citation
[2021] EWHC 1501 (Ch)
Parties
Claimant: The Secretary of State for Business, Energy and Industrial Strategy; Defendant: Lee Edward Lummis; Defendant: Craig Stanley Lummis
Jurisdiction
England and Wales
Judgment Date
04 June 2021
Procedural Posture
Company Directors Disqualification / Judgment After Trial
Outcome
Disqualification orders made against both defendants under section 6 of the Company Directors Disqualification Act 1986.
Legal Topics
Director Disqualification, Unfit Conduct, Insolvent Trading, Tax Avoidance Schemes, Directors' Duties
Insolvency Company Law Director Disqualification Unfit Conduct Insolvent Trading Tax Avoidance Schemes Directors' Duties

Case Brief

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Parties

The Secretary of State for Business, Energy and Industrial Strategy

Claimant

Lee Edward Lummis

Defendant

Craig Stanley Lummis

Defendant

Procedural Posture

Company Directors Disqualification / Judgment After Trial

Legal Issues

  1. 1 Whether the defendants' conduct rendered them unfit to be concerned in the management of a company under section 6 of the Company Directors Disqualification Act 1986
  2. 2 Whether the defendants caused the company to enter into transactions at the risk of HMRC after ceasing to trade and while insolvent
  3. 3 Whether the defendants were aware of the risk of substantial tax liabilities arising from the EDF Scheme

Ratio Decidendi

The defendants, as directors, caused the company to enter into substantial transactions for their own benefit after the company had ceased trading and was insolvent, and while aware of a significant risk of substantial tax liabilities to HMRC arising from the EDF Scheme. Their conduct demonstrated a disregard for the interests of creditors, particularly HMRC, and amounted to unfitness under section 6 of the Company Directors Disqualification Act 1986.

Court Disposition

Disqualification orders made against both defendants under section 6 of the Company Directors Disqualification Act 1986.

Orders

  • Lee Edward Lummis disqualified from acting as a director for 10 years.
  • Craig Stanley Lummis disqualified from acting as a director for 10 years.