Flatman v Wiles & Anor

The District Judge was entitled to infer a subjective desire to prefer from Mr Flatman's acts and omissions, given his knowledge of the sweep arrangement and the cessation of the commercial relationship. The finding of preference under section 239 was upheld. However, the District Judge failed to adequately identify and support a breach of duty under section 212, and that finding was set aside.

Parties: Appellant: Paul Flatman; Respondent: Benjamin John Wiles; Respondent: Paul David Williams
Jurisdiction: England and Wales
Judgment Date: 13 December 2019
Procedural Posture: Appeal / Judgment
Outcome: Appeal dismissed in relation to section 239; appeal allowed in relation to section 212.
Legal Topics: Preferences, Breach of Director's Duty, Misfeasance, Creditors' Voluntary Liquidation

Insolvency Company Law Preferences Breach of Director's Duty Misfeasance Creditors' Voluntary Liquidation

Case Brief

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Parties

Paul Flatman

Appellant

Benjamin John Wiles

Respondent

Paul David Williams

Respondent

Procedural Posture

Appeal / Judgment

Legal Issues

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

Ratio Decidendi

Court Disposition

Appeal dismissed in relation to section 239; appeal allowed in relation to section 212.

Orders

Declaration that Mr Flatman acted in breach of his duties as a director under section 212 set aside.
Order for recovery of £376,820.30 plus interest under section 239 upheld.