THE DIRECTOR’S FRIEND BLOG – No ‘Wrongful Trading’ here

Directors Desk

The Director’s Friend

This is the next in the series of blogs for The Director’s Friend blog.

The case:

 This is a discussion about a recent case decided in the Chancery Division of the High Court – (1) Nicholas William Nicholson and (2) Stratford Edward Hamilton (As Joint Liquidators of Main Realisations Limited) and (1) Thomas Geoffrey Fielding and others a judgment by Deputy Registrar Prentis (it would appear unreported).

Summary

 In summary, prior to Mainland Car Deliveries Limited (In Liquidation) (the ‘Company’) being placed into Administration is was alleged by the subsequently appointed joint Liquidators of the Company that the three directors of the Company had caused the Company to wrongfully trade and that they were liable to personally contribute over £2.12M to the assets of the Company. The Deputy Registrar appeared to be less than impressed with the Liquidators evidence and dismissed the application.

Section 214 of the Insolvency Act 1986 (the ‘Act’)

In the Director’s Friend earlier blog this section of the Act was explained.

In summary, the issues that the Court considers includes:

  • Whether the directors of the Company should have known or ought to have concluded that from a date that there was no reasonable prospect that the Company would avoid entering into insolvent liquidation (i.e. not that the Company is insolvent);
  • The focus is on the individual director’s conduct;
  • The maximum loss that the Court can take into account is the loss to the Company (not to creditors) as a result of the liquidation being delayed (net deficiency);
  • How far there is a sufficient connection between the increase in net deficiency and the factors which made the directors decision that the Company should trade on wrongful; then
  • What would be a fair order as between the various Respondents.

The judgment

The Deputy Registrar went through the detail of the evidence in some detail to consider whether or not there was any wrongful trading (paragraphs 54 to 96 of the judgment).

At paragraph 97 the Deputy Registrar found:

The hallmark of the Company’s correspondence with HMRC is that of ongoing detailed consideration of its position, entirely consistent with the evidence of Mr Fielding and Mr Tait that the directors were constantly monitoring and discussing the situation. They were doing so backed by exemplary management accounts prepared by Mr Tait, and they were taking tough decisions: laying off staff, laying up trucks.

 98. All this was against a background of an uncertain financial world, oscillating fuel prices, and an industry entering a significant downturn of uncertain duration. The evidence is that the directors were doing their best to take account of those, and they cannot be criticised for not predicting their full effect.

At paragraph 105 the Deputy Registrar was mindful of the fact that HMRC (a large creditor) ‘… was willing even in early 2009, after multiple failures of the Company to meet its promises, to enter into a further time to pay agreement.

The Deputy Registrar’s observations

The Deputy Registrar did not appear impressed that a deficiency account had not been prepared by the joint Liquidators (per paragraph 112) nor was an explanation provided as to why not.

In addition, he observed at paragraph 112:

I am left without any real clue as to what losses would have been incurred anyway consequent on an earlier liquidation.

The Deputy Registrar was also less than impressed (at paragraph 113):

Next, it seems to me that to rely now without qualification on the statement of affairs in the administration, prepared more than 7 years ago, is utterly inappropriate. Quantum is not an assessment of a notional figure. It is in this context assessment of the loss to the Company caused by ongoing trading.

Perhaps unsurprisingly the application was dismissed.

The Director’s Friend comments

This is another application for wrongful trading that has failed due to a lack of the required evidence being put forward by the Liquidators. The Court did not appear impressed in this case with that lack.

The Director’s Friend says that from the perspective of the directors it would appear fortunate that there was enough contemporaneous evidence in the Company’s correspondence with HMRC to explain the position. The directors were constantly monitoring and discussing the situation backed up by the exemplary management accounts prepared by one of the directors. The situation that the Company found itself in was not found to be the fault of the directors.

Finally, there is no reference to possible consequent director disqualification for participation in wrongful trading, however, with this type of claim there is always a risk of being subject to director disqualification as well. Please see the Director’s Friend earlier blog for more details.

What to do now

If you are faced with:

  • worrying insolvency issues with your company;
  • a claim against you for wrongful trading or perhaps misfeasance; and / or
  • director disqualification

then please talk to me today on +44 (0)1992 558411.  That is in order to protect your position without delay.  The earlier that you speak with me the more that I can likely help.

I am a Hertfordshire / London based solicitor and a full member both the Insolvency Lawyers Association and the Association of Business Recovery Professionals.

Until the next time…

THE DIRECTOR’S FRIEND

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Fixed fee divorce package at a cost of £750 plus VAT plus Court fee

Here at Breeze & Wyles Solicitors Ltd, we offer a fixed fee divorce package at a cost of £750 plus VAT plus Court fee

Our service enables you to be fully represented, by a qualified family specialist Solicitor, throughout your straightforward and undefended divorce for a one-off fixed fee payment.

Our experienced and dedicated family Solicitors will fully explain the divorce process to you and deal with any concerns or queries you may have. They understand that it can be a stressful, difficult time and they will take responsibility for the preparation of all relevant forms and will also deal with the Court on your behalf throughout the entire matter to conclusion.

Breeze & Wyles Solicitors Ltd are also able to offer expert advice in respect of all issues surrounding divorce or a relationship break up, such as advice on financial settlements as well as matters relating to children. We are one of an elite few firms in Hertfordshire and North London to offer all of the alternatives to going to Court such as; Negotiation, Mediation, Collaborative Law and Family Law Arbitration.

Contact us at our head office on 01992 558 411 or email lisa.honey@breezeandwyles.co.uk

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THE DIRECTOR’S FRIEND – A director fails to validate his obligations to a company

Director's Desk

The Director’s Friend

This is the next in the series of blogs for the Director’s Friend.

 

The case:

This is a discussion about a recent case decided in the Chancery Division of the High Court – Officeserve Technologies Ltd (In Liquidation) v Anthony-Mike [2017] EWHC 1920 (Ch) by HHJ Paul Matthews.

Summary

In summary, prior to Officeserve Technologies Ltd (In Liquidation) (the ‘Company’) being placed into Compulsory Liquidation and importantly post the presentation of a winding up petition. The director asserted that the right of the Joint Liquidators to bring a Misfeasance claim against him had been compromised by a settlement agreement entered into between the Company and the director post the Petition being presented and prior to the liquidation in respect of what was expressed as the director’s employment by the Company.

Section 127 of the Insolvency Act 1986 (the ‘Act’)

This section of the Act renders void any ‘disposition’ of property made by a company between the presentation of a winding up petition and the winding up order.

Section 129(2) of the Act deems that the winding up commences as a matter of law at the time that the winding up petition is presented (to the Court).

This is to protect the creditors of a company and to ensure that the assets of that company are distributed fairly or ‘pari passu’.

Surprisingly

Perhaps surprisingly to those that practice insolvency was that at the time of the negotiation of the settlement agreement post the Petition being presented was that (per paragraph 52) there was no discussion between the two sides of the possible application of section 127 of the Act.

Findings

At paragraph 59 the judge found that:

The claims put forward in the present litigation against the respondent, however, arise out of the respondent’s holding of an office. I therefore conclude that on its true construction the settlement agreement does not in any event protect the respondent against claims of the kind which are being put forward now.

At paragraph 90:

‘The mischief against which the section (127) is directed is clear. The destruction, or at least the reduction in value, of a property right belonging to the company, causing an immediate and equivalent accrual in value to another person, is well within that mischief.’

At paragraph 98:

‘I consider that I am therefore free to hold that the release of contractual rights such as a debt by a creditor company in favour of the debtor constitutes a ‘disposition’ of the property of the company within the meaning of s 127.’

At paragraph 99:

‘In my judgment, it is sufficient that identifiable property by some act having legal consequences (so excluding mere effluxion of time) ceases to be in the ownership of the company, so that it is no longer available to the liquidator of the company for the statutory purposes, and the value accrues to some other person (so excluding consumption or waste), even though that other person cannot necessarily be said to become the owner of the same property.’

At paragraph 104:

In my judgment, if the settlement agreement on its true construction extended to the claims being made against the respondent in the present application, that agreement would be void pursuant to s 127, to the extent that it operated either to release the respondent from those claims or to create an enforceable promise not to sue on them.’

At paragraph 110:

  • ‘In my judgment, s 127 is not, and is not intended to be, a prescription for the behaviour of company directors in future.’
  • At paragraph 118:
  • I hold that, on its true construction, the settlement agreement does not release the respondent from his obligations to the company in his capacity as a director, but that, if it did, section 127 of the Insolvency Act 1986 would operate on the releases of such obligations and avoid them, and that I would not validate such releases under the discretion given to the court by section 127 itself.’

The Director’s Friend comments

It is clear therefore that the Court is not going to allow a compromise of the company’s claims against a director or former director post the presentation of a winding up petition and pre-liquidation to bind subsequently appointed liquidators from bring a claim against that person in misfeasance.

In order for the actions of the director to be retrospectively validated under section 127 of the Act then at the very least it should be shown by the director that matters have turned out well for creditors. That may also go some way to assist in defending a misfeasance claim.

The fact that it turned out well for creditors is also likely to assist with responding to any subsequent director disqualification / compensation investigation brought by the Insolvency Service.

WHAT TO DO NOW

If you are faced with:

  • worrying insolvency issues with your company;
  • a winding up petition (and have payments that need to be made);
  • a claim against you for misfeasance; and / or

then please talk to me today on +44 (0)1992 558411.  That is in order to protect your position without delay.  The earlier that you speak with me the more that I can likely help.

I am a Hertfordshire / London based solicitor and a full member both the Insolvency Lawyers Association and the Association of Business Recovery Professionals.

Until the next time…

THE DIRECTOR’S FRIEND

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Good practice vital for employers in managing tribunal claims

notarising_documentsIn July, the Supreme Court ruled that employment tribunal claim fees were unlawful, and now it’s been confirmed that an ex-employee has been granted an extension of time to pursue their out-of-date unfair dismissal claim, on the basis that the original action was dropped due to the fees.

In giving the go-ahead for an extension in the case of Dhami v Tesco Stores Ltd, the claimant could show they had lodged the original claim within the three-month time limit and the fees were an important reason for not proceeding.  It is likely that many more out-of-date claims will be put forward, and, as a result, employers may find themselves firefighting situations that were considered closed.

The Supreme Court ruling in July in R (on the application of UNISON) v Lord Chancellor put an end to the requirement for a fee to be paid on submitting a claim, known as the issue fee, and another a few weeks before the hearing.  Introduced in 2013, the cost was more than £1,000 for complex claims, and the number of tribunal claims dropped by two-thirds as a result.

The public service union UNISON brought the case, arguing that the fees undermined the fundamental principle of access to justice for all, and that it was discriminatory as women generally earn less and so were likely to find it harder to pay. The Supreme Court agreed, saying it was unlawful under both domestic and EU law, and the fees were abolished with immediate effect, and  payments made under the scheme are to be refunded.

Commentators and employer groups were quick to predict a steep increase in claims back to previous levels, arguing that with no financial risk involved, employees will be more likely to make a claim, whether legitimate or bogus.

Said employment law expert, Sharon Matchwick of Hertford town solicitors Breeze & Wyles:  “For now, employers who focus on best practice and knowing their responsibilities will be better placed to manage any such claims.  This is the time to identify any potential claims that may be made, and having reviewed the circumstances take steps to avoid such things recurring.  Demonstrating a positive attitude to any Employment Tribunal will stand a business in good stead.”

She added: “It’s more important than ever to have a positive working environment, as well as complying with the many laws applying in the workplace. It’s good for business, as well as minimising the risk of claims.

“If you do find yourself facing a claim, then think about maximising mediation efforts, and using ACAS Early Conciliation as an opportunity to resolve things swiftly. Equally, if having investigated the claim and having tried to resolve the matter by conciliation, you believe that the employee is just trying it on because they have nothing to lose, it may be worth being bullish and going for costs, a deposit order or applying to strike out proceedings.”

If you want to know any more, feel free to contact our Business Services Department on 01992 558411

 

R (on the application of UNISON) v Lord Chancellor

Dhami v Tesco Stores Ltd

Web site content note: 

This is not legal advice; it is intended to provide information of general interest about current legal issues.

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Giving rookie renters a helping hand

StudentFollowing the recent A level results, many first-time students will be looking for last-minute accommodation, if they aren’t heading to their first choice of university with an assured place in the halls of residence.

Parents can help guide the rookie tenants through the process, but may themselves not be aware of how things have changed since their uni days or first-time flat rental.

All too often both parents and students get focused on the emotional upheaval or logistics, rather than the important details of checking out the property and making sure the landlord is a safe bet.

Privately-owned student accommodation is likely to be an HMO – or house of multiple occupation – if it accommodates three or more students, which places extra obligations on the landlord. For example, an HMO will need to satisfy special requirements regarding fire and general safety, utility supplies and management of communal areas, which could include fire alarms, extinguishers and fire blankets on every floor. You can also ask to see landlord’s HMO licence. If a landlord doesn’t have a licence when they should, they can be prosecuted and you may be able to reclaim up to 12 months’ worth of rent paid during the time that the HMO was unlicensed.

Whether the property is classed as an HMO or not, all landlords should ensure that gas appliances are covered by an annual check, that all electrical installations are checked every five years by a qualified electrician and that any appliances like washing machines, kettles or toasters have a PAT certificate.

In privately-owned student accommodation, any agreement is likely to be based on an assured short hold tenancy. This can be for a fixed term such as the academic year, for 12 months, or periodic, which may run from month-to-month. Most lets include the summer holiday period these days, with either full or reduced rent due.

A written agreement should be provided by the landlord, and as a minimum this should be a statement of the main terms, including the date it will begin, the rent due, when and how it must be paid, if the rent can be changed and how long the agreement is for. Under some agreements the tenants may be jointly and severally liable for the rent. This means that, if one of the tenants does not pay their share, the landlord can sue any of the other tenants for the unpaid rent and may pursue the easiest option.  For example, in a house share with a mix of home and overseas students, the landlord may choose to pursue one UK resident for the whole sum, rather than any of the overseas students. Also, it’s likely that every student will have to be backed up by a guarantor such as a parent.

By law, any deposit must be held by the landlord in a registered deposit protection scheme and you should ask to see evidence of this being done within 30 days. The deposits may be held in the name of one or more designated tenants.

The property should be checked carefully against the inventory, and whether this is a comprehensive record of all contents and the general condition of each aspect of the accommodation or a simple list, it’s worth taking photographs of the condition of everything, including any damage or poor condition that you pick up as you go round the property, to ensure that you have a strong case for the full return of your deposit at the end of the tenancy.

Recently, a group of student tenants in Bristol took a letting agent to court and managed to overturn a deduction of £780 worth of charges which was being taken from their deposit to cover redecoration and cleaning. The students had photographic proof of the state of the accommodation when they took it on and could show it was cleaner when they left, as well as having evidence to demonstrate that works claimed for by the letting agent had not subsequently been done. Their attention to detail helped them secure a County Court judgement, and the return of the deposit.

Explained tenancy legal expert Rita Wright, of solicitors Breeze & Wyles Solicitors based in Hertford: “Thanks to the huge rise in demand for university places over recent years, many different types of investors and private landlords have entered the student accommodation sector. There’s been a big shift away from the scruffy digs that people used to experience at university, but there are still many older properties that may be more likely to pose problems in terms of repairs and general condition, and no sector is immune from difficult landlords.

“The important thing is to make sure young people have some guidance, and if necessary get the contract and terms checked out professionally. It’s likely to be the parent who is on the line as guarantor, so it’s worth taking time to be sure, and not just jumping to secure a last-minute property.”

Some tips from Rita include:

  • If you’re using a letting agent be sure of their procedures and where a holding or advance rental deposit is required, find out if it will be refunded if the application fails to complete, for example if you don’t pass a credit check
  • Ask to see the relevant licences, such as for a House in Multiple Occupation, and for any gas or electrical installations and appliances
  • If the letting agent or landlord says that any work will be undertaken as a condition of you taking on the tenancy, get it in writing before signing any agreement
  • Read the small print on the tenancy agreement and if anything doesn’t sound right then get it checked out, as once you’ve signed, you’re committed
  • Check the inventory – dispute anything that’s not accurate and take photographs when you move in
  • Make sure the deposit is being held in a Government-backed scheme.

If you have any questions about Tenancy agreements and Landlord Disputes, please contact our Landlord and Tenant department on 01992 558 411 and we will be happy to discuss this in greater detail with you.

Web site content note: 

This is not legal advice; it is intended to provide information of general interest about current legal issues.

Reference:

Licensing of houses in multiple occupation in England: a guide for tenants

News coverage of student getting back their deposit after court action

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Name and Shame in Divorce and Adultery Cases

tug-ropeThe government has introduced a new form in England and Wales to apply for divorce which invites the applicant to name and shame adulterers.

Although there is no actual obligation to fill in this box, the new form gives the impression that this is not the case, unless you read the small print. Applicants will also fill it in because it is there. The new box is an opportunity for the injured party to punish their cheating spouse. The guidance notes on the form advise it “is not normally necessary to name the person your spouse committed adultery with; you should only consider doing so if the petition is likely to be disputed” but how many aggrieved spouses who actually read these notes are going to ignore them?

What applicant’s often don’t know is that if someone is named on the application as having committed adultery with your husband or wife, they usually become a party to the court proceedings. This can cause an increase in costs and a delay to proceedings.

The question solicitors will be asking themselves now is what is this going to do for the legal system? We advise our client’s to keep the divorce petition as neutral as possible in order to reach a swift and amicable settlement thus keeping costs down, yet this form is an opportunity for the applicant to seek revenge which will, no doubt, invite “defended” divorces and lengthy litigation.

At Breeze and Wyles, our expert family lawyers in Essex, Hertfordshire and North London can advise how best to proceed with your divorce application so you can move forward with your life. When applying for a divorce, you must give one of these reasons – adultery, unreasonable behaviour, desertion, you have lived apart for more than two years and your spouse agrees to the divorce or you have lived apart from your spouse for at least 5 years (your spouse does not have to agree). We can help you work through which is the most suitable option for you.

If you are wanting to divorce your spouse or formally separate from your civil partner, contact the family team on 01992 558 411 for help and advice.

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The Director’s Friend – Director Disqualification – Current and Future Misconduct Trends

Director's Desk

The Director’s Friend

 

This is the next article in a series by the Director’s Friend.

The Director’s Friend recently attended the Insolvency Live! 2017 event run by The 

(‘IS’). This was attended by a lot of stakeholders in the insolvency industry.

Director Disqualification current misconduct trends:

From a perspective of director disqualification, the IS have identified a growing number of trends in terms of misconduct at least worthy of director disqualification proceedings being considered to include:

The theme seems to be that a public interest winding up petition is presented, the offending company wound up by order of the Court and then director disqualification proceedings follow.

These are in addition to the, at present, usual themes of the insolvent company not paying HMRC or employing illegal workers, being as a consequence fined by the Home Office and thereafter being placed into liquidation to avoid paying the fine.

 Future Director Disqualification focus:

 According to the IS complaints about Binary Options appear to be on the increase.

According to the FCA website these are a form of fixed-odds betting on movements in financial markets. Typically, a trade in binary options involves a simple question of whether an event will happen or not – for example, will the price of a particular share or asset go up. The outcome is either yes or no, hence the term binary option. If the investor is correct, they ‘win’ and should see a return on their investment. If the investor is wrong, they lose their full investment.

For more details please also see the Action Fraud website.

Top tips by the Director’s Friend:

  1. When you are faced with an investigation by the IS the Directors Friend’s advice is that you should usually engage with that investigation and put forward carefully crafted answers and representations to the IS.
  2. If the well-advised director does not put across their side of the story with the assistance of specialist legal advice then that director (however well intentioned) could make matters worse for themselves.
  3. Your legal adviser will be able to advise you as to the risk of other parallel investigations that may be going on at the same time. To include criminal and compensation proceedings.
  4. If the IS can be persuaded that it is no longer in the public interest to bring director disqualification proceedings then in the Directors Friend’s experience the IS can, will and do drop the investigation or discontinue their case. Director disqualification is not inevitable.

What to do now:

My name is Richard Cole. I am a Solicitor who formerly worked at the IS carrying out director disqualification investigations. I am now the Director’s Friend. Why not contact me to discuss on: +44(0) 1992 558411. The earlier that you speak with me the more that I can likely help.

Until the next time…

THE DIRECTOR’S FRIEND

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Where there’s a will, there’s a way…

LegacyWhen thinking of making a will, the idea of a Victorian lawyer taking down the last instructions at the bedside still springs to mind for many people.

And the 19th century lawyer would find things pretty much as they were if they time travelled to 2017, but a major change to how people can say what should happen after their death is likely to happen soon.  If the proposals from the Law Commission get the go ahead, the law is likely to catch up with technology, and in future we could see emails and other simple expressions of intention being acceptable.

But in the meantime, the only way to be sure of what happens after you die is to make your will following the formalities that have been in place for hundreds of years.  That is particularly important for those who may be living with partners, for whom the current law offers no protection, or where there are young children, for whom the choice of guardians may be important. Yet it’s estimated that around 40% of the adult population don’t have a will.

To be valid, a will must be in writing and be signed by the person making the will in the presence of two or more witnesses, who must also sign at the same time.

Without a valid will, the division of assets is decided by the Intestacy Rules under which, typically, the whole of the state of someone who dies leaving no surviving spouse or civil partner will go to children, or if they have none, to parents or other family members.  If there is a surviving cohabitee they could apply for “reasonable financial provision” under the Inheritance (Provision for Family and Dependants) Act 1975, but this is a very slow and potentially expensive option, and in the meantime, they may be blocked from living in the couple’s home if it was not held in shared ownership.

The main proposal from the Law Commission would see the Courts able to recognise wills that have not followed the existing strict rules, so long as the deceased’s testamentary intentions are clear.  That will include provisions to recognise electronic wills, if fraud and undue influence can be ruled out. It is also intended that new rules would take better account of conditions such as dementia, which affect decision-making.

Said Patrice Lawrence, trust and estate law specialist with Hertford based Solicitors Breeze & Wyles:   “If these proposals go ahead, it will bring the law relating to will writing into the modern world, which is good news as long as there is sufficient protection, particularly for the elderly and vulnerable.  But nothing is going to change right away, and even if the rules do change there is likely to be a period of uncertainty during which any ambiguities in the new rules are tested in the courts, so for the time being it’s important that wills comply with the long-standing rules.  Not having a valid will in place can create a lot of stress for surviving family, at what is already a very difficult time.”

She added: “Making a will is something that people often put off, perhaps because they find it hard to think about it, but it’s the only way you can be sure of what happens when you die, and there are issues that will be important at different life stages.  If you have children under 18, it’s likely you would want to have named guardians to care for them, or to make special provision if a child of any age has limiting physical or mental health issues.  Older people may want to make plans to mitigate inheritance tax, and cohabiting couples may want to ensure property or assets pass to each other, as they do not have the protection that comes with marriage or civil partnership.”

The consultation period will run until 10 November 2017

If you have any questions, feel free to speak to Patrice in our Private Client Department on 01992 558411, we can arrange meetings in our Hertford, Bishop’s Stortford or Enfield Offices

Web site content note:  

This is not legal advice; it is intended to provide information of general interest about current legal issues.

1837 Wills Act

Inheritance (Provision for Family and Dependents) Act 1975

Law Commission consultation

http://www.step.org/news/law-commission-proposes-judicial-power-recognise-informal-wills

 

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Inquorate appointment of administrators

weightThe Court of Appeal has given a recent judgment (Randhawa and Turpin [2017] EWCA Civ 1201 dated 01 August 2017) upon the inquorate appointment of administrators by a sole director. That case is here.

The question:

The question that the Court of Appeal had to decide was this:

‘… whether the sole director of a company, whose articles required two directors for its board meeting to be quorate, could validly appoint administrators under paragraph 22 of Schedule B1 to the Insolvency Act 1986.

Sir Geoffrey Vos, Chancellor of the High Court gave the lead judgment.

The answer:

At paragraph 79:

‘… I conclude that the judge was wrong to have held that the sole director of the Company had the right to appoint the Joint Administrators under paragraph 22(2) of Schedule B1 notwithstanding the provision in the Articles requiring a quorum of 2 directors at board meetings of the Company.’ 

The warning:

At paragraph 97:

… the administrators could themselves have been expected to check that their appointment was valid as long ago as September 2013, when it was made. They had the Articles and a copy of the resolution appointing them. That resolution contained a clear inaccuracy, when it said that [the director of the Company] constituted a quorum for the directors’ meeting. A brief inspection of the Articles would have uncovered that inaccuracy.

 … the  ought to have … [investigated any impediment to their appointment] immediately they were appointed if not before they accepted their appointment.

 [one of the Joint Administrators] failed to investigate the matter to ensure that the appointment of his firm would be valid.

 The conclusion:

At paragraph 101:

… I would hold that the appointment of the Joint Administrators was invalid.

 The lesson:

Check that the director(s) have a quorum to appoint pre-appointment. Check again post appointment.

I am an insolvency solicitor. If you have any questions please give me a call on +(0) 1992 558 411 or drop me an email on: Richard.Cole@breezeandwyles.co.uk

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Husband left with less than 1/3 of assets after short marriage!

The Court of Appeal left solicitors with more questions than answers recently after ruling that factors such as a dual-career/income, separate finances, no children and a short marriage can be ample evidence to depart from the long standing principle of equal sharing on divorce.

The duration of Mr and Mrs Sharp’s marriage was approximately 6 years (including the initial period of cohabitation). The couple had similar incomes of roughly £100,000 per annum, however, Mrs Sharp received bonuses totalling approximately £10.5m during the course of the marriage. The couple kept their finances separate and even split their outgoings. Mr Sharp was not aware of the amount of bonus his wife received. Mr Sharp was deemed not to have contributed either in a domestic or business sense to his wife’s bonus and as a result received a settlement of £2m; just under a third of the parties’ total assets.Sharp Blog Picture

The decision in Sharp v Sharp suggests you may not have to share all assets accrued during your marriage with your spouse/civil partner. Of course such a decision perhaps leaves more questions than it answers; how long is a short marriage? Would the decision have been different if Mrs Sharp shared her bonuses?  As with all cases, the decision here is fact specific.

At Breeze and Wyles Solicitors Ltd, our expert family lawyers in Essex, Hertfordshire and North London can advise how best to protect your assets at the outset with a pre-nuptial agreement and/or post nuptial agreement. In the event you face a divorce without such an agreement, we are able to guide you through the process at every step towards a fair settlement.

If you are arranging your finances with your spouse, civil partner or ex-partner, contact the family team on 01992 558 411 for help and advice.

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