Chloe Shuffrey, instructed by Frances Coulson and Ian Rees of Wedlake Bell LLP, acted for the successful Applicants, the joint liquidators of Courtside Recycling Limited (in compulsory liquidation), in a claim for c. £2.5m pursuant sections 212 (misfeasance / breach of duty) and 213 (fraudulent trading) against the former director of the Company. In its judgment handed down on 21 February 2024, the High Court found that the former director was guilty of fraudulent trading and fraudulent breach of duty and was accordingly liable to contribute the sum of c. £2.5m to the Company’s assets. The fraudulent trading consisted of a dishonest scheme whereby the director deliberately concealed various Company bank accounts from HMRC (and the Company’s own accountants) so as to avoid accounting to HMRC in respect of the Company’s true VAT liability and in order illegitimately to appropriate huge sums of cash from the Company for his own benefit.

The judgment sheds light on the approach of the Court to the issue of quantum (under both ss. 212 and 213) and the burden of proof where the Company’s records have been deliberately destroyed by the director.

Read the High Court’s Judgment here.