Smithton Ltd v Naggar

Smithton Ltd v Naggar

Mr Naggar was not a de facto or shadow director of Hobart as his actions were consistent with his roles as chairman of DDI and major client/shareholder, not as a director of Hobart. Section 190 Companies Act 2006 was not engaged because the arrangements did not result in the acquisition of substantial non-cash assets by a director or connected person as required by the statute.

Parties
Appellant: Smithton Limited; Respondent: Guy Naggar; Third Party: Barry Townsley; Fourth Party: Colin Thomas; Fifth Party: Jason Berry
Jurisdiction
England and Wales
Judgment Date
10 July 2014
Procedural Posture
Civil Appeal / Court of Appeal Judgment
Outcome
Appeal dismissed
Legal Topics
De Facto Director, Shadow Director, Section 190 Companies Act 2006, Corporate Governance, Substantial Property Transactions
Company Law De Facto Director Shadow Director Section 190 Companies Act 2006 Corporate Governance Substantial Property Transactions

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Parties

Smithton Limited

Appellant

Guy Naggar

Respondent

Barry Townsley

Third Party

Colin Thomas

Fourth Party

Jason Berry

Fifth Party

Procedural Posture

Civil Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Whether Mr Naggar was a de facto or shadow director of Hobart (Smithton Limited)
  2. 2 Whether arrangements between Hobart and Mr Naggar's connected persons infringed section 190 Companies Act 2006

Ratio Decidendi

Mr Naggar was not a de facto or shadow director of Hobart as his actions were consistent with his roles as chairman of DDI and major client/shareholder, not as a director of Hobart. Section 190 Companies Act 2006 was not engaged because the arrangements did not result in the acquisition of substantial non-cash assets by a director or connected person as required by the statute.

Court Disposition

Appeal dismissed