Psv 1982 Ltd v Langdon (Rev1) [2021] EWHC 2475 (Ch) (08 September 2021)

Psv 1982 Ltd v Langdon (Rev1) [2021] EWHC 2475 (Ch) (08 September 2021)

Section 217 Insolvency Act 1986 is interpreted to mean that once a liability is established against the company in proceedings, a director in breach of s.216 is automatically personally liable for that debt; the liability is incurred when the breach of contract occurs, not when the contract is entered into.

Citation
[2021] EWHC 2475 (Ch)
Parties
Claimant: PSV 1982 Limited; Defendant: Sean Anthony Edward Langdon
Jurisdiction
England and Wales
Judgment Date
08 September 2021
Procedural Posture
Civil Claim / Judgment on Preliminary Issues
Outcome
Preliminary issues determined in favour of claimant; liabilities established for s.217 purposes; liabilities incurred at breach date; director personally liable.
Legal Topics
Director Liability, Phoenix Companies, Personal Liability for Company Debts, Estoppel, Breach of Contract
Insolvency Law Company Law Director Liability Phoenix Companies Personal Liability for Company Debts Estoppel Breach of Contract

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Parties

PSV 1982 Limited

Claimant

Sean Anthony Edward Langdon

Defendant

Procedural Posture

Civil Claim / Judgment on Preliminary Issues

Legal Issues

  1. 1 Whether liabilities of DYGL are established for purposes of s.217 Insolvency Act 1986 by Commercial Court proceedings
  2. 2 Whether Mr Langdon is bound by the Commercial Court judgment as privy or estopped
  3. 3 When the relevant liabilities were incurred for s.217 purposes

Ratio Decidendi

Section 217 Insolvency Act 1986 is interpreted to mean that once a liability is established against the company in proceedings, a director in breach of s.216 is automatically personally liable for that debt; the liability is incurred when the breach of contract occurs, not when the contract is entered into.

Court Disposition

Preliminary issues determined in favour of claimant; liabilities established for s.217 purposes; liabilities incurred at breach date; director personally liable.

Orders

  • Parties invited to agree appropriate order to reflect judgment and costs.
  • If needed, parties to agree terms for amended particulars of claim; otherwise court will address on hand-down.