• Mitchell & Ors v Al Jaber; Al Jaber & Ors v JJW Ltd [2024]

    A director's breach of his fiduciary duty occurred by his ignoring the fact of liquidation of the company of which he was a director, and of the resulting termination of his powers, and instead causing the company to transfer away its shares to a knowing recipient. Play In the present case, a Saudi Arabian sheikh, who was also a director of a BVI company, 'impersonated' a pre-liquidation director of the company - someone with authority to execute some Share Transfer Forms on behalf of the company He did not have the power to execute the Share Transfer Forms as his powers had ceased when the company entered liquidation. In circumstances where those Share Transfer Forms were actually executed later than the director claimed (meaning that, because of the liquidation, his powers had in actual fact ceased before the date of their execution), he was unable to argue that he was not still subject to the fiduciary duties that accompanied such powers. So, in accordance with equitable principles, the court considered him as subject to the fiduciary duties that he would have had if his powers as a director of the company had not ceased.

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    Re UKCloud Ltd (in liquidation) [2024] EWHC 1259 (Ch)

    Internet Protocol Addresses - fixed for floating charge? The question which arose in this case, and on which the liquidator required the court's direction, was whether the security granted by UKCloud Limited was a fixed charge or a floating charge. Play The reason that the liquidator felt he needed assistance on this question was probably because the label used in a debenture to describe the nature of the charge created over an asset, or class of assets, is a guide to the security the parties intended to create, but it is not conclusive. To attempt to answer this question, the court was fundamentally concerned with the nature of the rights and obligations the parties had intended to create. To come to a conclusion, it considered the essential difference between a fixed charge and a floating charge. The case law indicates that under a fixed charge the assets charged as security are permanently appropriated to the payment of the sum charged, in such a way as to give the chargee a proprietary interest in the assets. For as long as the fixed charge remains unredeemed, the assets can be realised from the charge, though only with the agreement of the chargee. The chargee might have good commercial reasons for agreeing to a partial release. Under a fixed charge, that will be a matter for the chargee to decide for itself. A floating charge contrasts with a fixed charge, however, because in the case of a floating charge the chargee does not have the same power to control the security for its own benefit. In this case, the chargee does have a proprietary interest, but its interest is in a fund of circulating capital. Unless and until the chargee intervenes (by crystallisation of the charge), it is for the trader, not the bank, to decide how to run its business.

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    Purkiss v Kennedy & Ors [2024] EWHC 1081 (Ch)

    This case featured another judgment in a group of cases which arose out of schemes which were designed to enable self-employed individuals to avoid the obligation to pay income tax and national insurance on their remuneration. Play The company's problems began with HMRC assessing it for income tax and NIC for around £2.2 million. The company went into creditors' voluntary liquidation without making payment or appealing. The judge in the High Court accepted that “HMRC undoubtedly has a duty to collect tax which is due,” but questioned whether HMRC could have ‘interests’ for the purposes of section 423(3)(b) Insolvency Act 1986 which were affected by arrangements which lawfully reduced or prevented tax arising.

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    Boris Franz Becker v Ford & Ors [2024] EWHC 1001 (Ch)

    This case is an unfortunate reminder of the fate in bankruptcy of an extremely well-known professional tennis player; yet he, as a bankrupt, was ultimately able to convince the court that his compliance with his Trustees in Bankruptcy was consistent with the obligations imposed by the Insolvency Act 1986, and sufficient for his suspension to be lifted. Play In this case, just as the court had to be satisfied that there had been non-compliance by a bankrupt to suspend the bankrupt's automatic discharge, the court also had to be satisfied that the bankrupt had co-operated with the Official Receiver or his Trustee in Bankruptcy to obtain a finding that there had been co-operation which was consistent with his Insolvency Act 1986 obligations. It was noted that the legislation did not impose a requirement that discharge was conditional upon full compliance. Rather, it was enough if Mr Becker could demonstrate that he had done all that he could reasonably do in the circumstances in fulfilling any outstanding obligations which had been previously identified.