Glasgow City Council v. Craig & Anor [2008] ScotCS CSOH_171 (11 December 2008)

Glasgow City Council v. Craig & Anor [2008] ScotCS CSOH_171 (11 December 2008)

Personal liability under s.217 of the Insolvency Act 1986 is limited to debts incurred by the company in the course of carrying on business under the prohibited name. The defenders are not liable for all debts of Degreefresh Limited, but only for those attributable to the rates for 67 Kilmarnock Road, where the prohibited name 'Arigo' was used.

Citation
[2008] ScotCS CSOH_171
Parties
Pursuer: Glasgow City Council; First Defender: Gordon Craig; Second Defender: Aristide Moccia
Jurisdiction
Scotland
Judgment Date
11 December 2008
Procedural Posture
Civil / Judgment After Proof (trial)
Outcome
Partially allowed for pursuer; defenders held personally liable only for debts incurred under the prohibited name.
Legal Topics
Personal Liability of Directors, Prohibited Names, Phoenix Companies, Non Domestic Rates, Interpretation of Insolvency Act 1986 Ss.216 217
Insolvency Law Company Law Civil Procedure Personal Liability of Directors Prohibited Names Phoenix Companies Non Domestic Rates Interpretation of Insolvency Act 1986 Ss.216 217

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Parties

Glasgow City Council

Pursuer

Gordon Craig

First Defender

Aristide Moccia

Second Defender

Procedural Posture

Civil / Judgment After Proof (trial)

Legal Issues

  1. 1 Extent of personal liability of directors under s.217 Insolvency Act 1986 when only part of a company's business is conducted under a prohibited name
  2. 2 Whether liability extends to all debts of the company or only those incurred under the prohibited name

Ratio Decidendi

Personal liability under s.217 of the Insolvency Act 1986 is limited to debts incurred by the company in the course of carrying on business under the prohibited name. The defenders are not liable for all debts of Degreefresh Limited, but only for those attributable to the rates for 67 Kilmarnock Road, where the prohibited name 'Arigo' was used.

Court Disposition

Partially allowed for pursuer; defenders held personally liable only for debts incurred under the prohibited name.

Orders

  • Declaration that 'Arigo' is a prohibited name in relation to the defenders under s.216 Insolvency Act 1986.
  • Declaration that defenders are personally liable under s.217 for debts incurred by Degreefresh Limited in the course of carrying on business under the name 'Arigo'.