NICHOLAS BARNETT (as Liquidator of Glam and Tan Limited) & Anor v DANIELLE LITRAS

NICHOLAS BARNETT (as Liquidator of Glam and Tan Limited) & Anor v DANIELLE LITRAS

Mrs Litras breached her duties as director by causing or permitting payments for her own benefit, receiving unlawful salary and dividends, and failing to account for company assets. However, payments made under duress due to domestic violence were beyond her control and it would not be just to hold her liable for those sums. She remains liable for sums received for her own benefit, unlawful salary and dividends, and insurance proceeds, totaling £70,705.82, with interest.

Parties
Applicant (liquidator): Nicholas Barnett; Applicant (company): Glam and Tan Limited – In Liquidation; Respondent: Mrs Danielle Litras
Jurisdiction
England and Wales
Judgment Date
08 April 2022
Procedural Posture
Insolvency/misfeasance Application / Judgment After Trial
Outcome
Mrs Litras found liable to contribute to company losses for sums received for her own benefit, unlawful salary and dividends, and insurance proceeds; not liable for sums paid under duress to third parties.
Legal Topics
Directors' Duties, Misfeasance, Unlawful Dividends, Breach of Fiduciary Duty, Section 212 Insolvency Act 1986
Insolvency Law Company Law Directors' Duties Misfeasance Unlawful Dividends Breach of Fiduciary Duty Section 212 Insolvency Act 1986

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Parties

Nicholas Barnett

Applicant (liquidator)

Glam and Tan Limited – In Liquidation

Applicant (company)

Mrs Danielle Litras

Respondent

Procedural Posture

Insolvency/misfeasance Application / Judgment After Trial

Legal Issues

  1. 1 Whether Mrs Litras breached her duties as director under the Companies Act 2006 and is liable for misfeasance under section 212 of the Insolvency Act 1986
  2. 2 Whether payments made by the Company were unlawful dividends, loans, or misapplied assets
  3. 3 Whether Mrs Litras is personally liable for losses caused by payments made under duress or for her own benefit

Ratio Decidendi

Mrs Litras breached her duties as director by causing or permitting payments for her own benefit, receiving unlawful salary and dividends, and failing to account for company assets. However, payments made under duress due to domestic violence were beyond her control and it would not be just to hold her liable for those sums. She remains liable for sums received for her own benefit, unlawful salary and dividends, and insurance proceeds, totaling £70,705.82, with interest.

Court Disposition

Mrs Litras found liable to contribute to company losses for sums received for her own benefit, unlawful salary and dividends, and insurance proceeds; not liable for sums paid under duress to third parties.

Orders

  • Mrs Litras to restore £70,705.82 to the company, with interest at 1% above base to judgment.
  • Parties to agree an order for approval by the court.