Supreme Court confirms that section 213 of the Insolvency Act 1986 is not restricted to those involved in the management or control of the company’s business (Bilta (UK) Ltd (in liquidation) and others v Tradition Financial Services Ltd; Nathanael Eurl Ltd (in liquidation) and another v Tradition Financial Services Ltd)
The Supreme Court unanimously dismissed both appeals. Applying ordinary principles of statutory interpretation, the court affirmed that the language of section 213 of the Insolvency Act 1986 (IA 1986) does not restrict liability to those involved in the management or control of the company’s business such as directors or managers, but could very well apply to someone routinely transacting with the company in the knowledge that the company was carrying on a fraudulent business. In addition, the court held that where claimant companies had been struck off and then later restored to the register, the deemed existence of the claimant companies during the period in which they were in fact in dissolution did not necessitate assuming that they lacked directors or other officers during that time. That was a question of probability to be determined on the evidence: the burden of proof was on the claimant companies and they had failed to discharge it. Accordingly, the dishonest assistance claim remained time-barred. Andrew Westwood KC, barrister practising from Maitland Chambers, comments on the implications of the judgment.