Holland v Revenue and Customs & Anor

Holland v Revenue and Customs & Anor

A director of a corporate director is not, by virtue of that position alone, a de facto director of the subject company. Mr Holland, having acted only as a director of the sole corporate director and not outside that capacity, cannot be held liable as a de facto director under section 212 of the Insolvency Act 1986. The appeal is allowed and the orders against Mr Holland are set aside.

Parties
Appellant: Michael Holland; First Respondent: The Commissioners for Her Majesty’s Revenue and Customs; Second Respondent: Linda Holland
Jurisdiction
England and Wales
Judgment Date
02 July 2009
Procedural Posture
Civil Appeal / Court of Appeal Judgment
Outcome
Appeal allowed; orders against Mr Holland set aside; cross-appeal dismissed.
Legal Topics
De Facto Directors, Misfeasance, Unlawful Dividends, Corporate Veil, Section 212 Insolvency Act 1986, Section 727 Companies Act 1985
Company Law Insolvency Law De Facto Directors Misfeasance Unlawful Dividends Corporate Veil Section 212 Insolvency Act 1986 Section 727 Companies Act 1985

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Parties

Michael Holland

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

First Respondent

Linda Holland

Second Respondent

Procedural Posture

Civil Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Whether a director of a corporate director can be held as a de facto director of a company for the purposes of section 212 of the Insolvency Act 1986
  2. 2 Whether Mr Holland was liable for misfeasance and breach of duty in causing payment of unlawful dividends
  3. 3 Whether relief under section 727 of the Companies Act 1985 should be granted

Ratio Decidendi

A director of a corporate director is not, by virtue of that position alone, a de facto director of the subject company. Mr Holland, having acted only as a director of the sole corporate director and not outside that capacity, cannot be held liable as a de facto director under section 212 of the Insolvency Act 1986. The appeal is allowed and the orders against Mr Holland are set aside.

Court Disposition

Appeal allowed; orders against Mr Holland set aside; cross-appeal dismissed.

Orders

  • Set aside all orders adverse to Mr Holland made by the High Court.
  • Dismiss the cross-appeal by HMRC.