Tradition Financial Services Ltd v Bilta (UK) Ltd & Ors

Tradition Financial Services Ltd v Bilta (UK) Ltd & Ors

Liability under section 213 of the Insolvency Act 1986 is not limited to persons exercising management or control over the company but extends to outsiders who knowingly participate in fraudulent trading. The statutory deeming provision in section 1032(1) of the Companies Act 2006 does not require the assumption that directors in office at the date of dissolution remained in office throughout the period of non-existence; only inevitable consequences of restoration are deemed. The judge's costs order was within his discretion and not manifestly unjust.

Parties
Appellant: Tradition Financial Services Ltd; Respondents: Bilta (UK) Ltd and others (including Weston Trading UK Ltd, Nathanael Eurl Ltd, Vehement Solutions Ltd, Inline Trading Ltd, and their liquidators)
Jurisdiction
England and Wales
Judgment Date
10 February 2023
Procedural Posture
Civil Appeal / Judgment of the Court of Appeal on Appeal From the High Court
Outcome
Appeal dismissed; cross-appeal dismissed.
Legal Topics
Fraudulent Trading, Accessory Liability, Limitation of Actions, Restoration of Dissolved Companies, Costs Orders
Insolvency Law Company Law Civil Procedure Fraudulent Trading Accessory Liability Limitation of Actions Restoration of Dissolved Companies Costs Orders

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Parties

Tradition Financial Services Ltd

Appellant

Bilta (UK) Ltd and others (including Weston Trading UK Ltd, Nathanael Eurl Ltd, Vehement Solutions Ltd, Inline Trading Ltd, and their liquidators)

Respondents

Procedural Posture

Civil Appeal / Judgment of the Court of Appeal on Appeal From the High Court

Legal Issues

  1. 1 Whether liability under section 213 of the Insolvency Act 1986 is limited to persons exercising management or control over the company or extends to outsiders who knowingly participate in fraudulent trading
  2. 2 Proper interpretation and application of statutory deeming provisions upon restoration of dissolved companies under section 1032 of the Companies Act 2006
  3. 3 Whether the judge was entitled to make the costs order that he did

Ratio Decidendi

Liability under section 213 of the Insolvency Act 1986 is not limited to persons exercising management or control over the company but extends to outsiders who knowingly participate in fraudulent trading. The statutory deeming provision in section 1032(1) of the Companies Act 2006 does not require the assumption that directors in office at the date of dissolution remained in office throughout the period of non-existence; only inevitable consequences of restoration are deemed. The judge's costs order was within his discretion and not manifestly unjust.

Court Disposition

Appeal dismissed; cross-appeal dismissed.

Orders

  • Appeal on section 213 issue dismissed: liability is not limited to those with management or control.
  • Appeal on statutory deeming provision dismissed: no assumption that directors remain in office during dissolution.