1,069
Views
0
CrossRef citations to date
0
Altmetric
Original Articles

The contours and content of the ‘creditors’ interests duty’

ORCID Icon & ORCID Icon
Pages 85-108 | Received 16 Mar 2020, Accepted 08 May 2020, Published online: 05 Jun 2020
 

ABSTRACT

It is well established in a number of Commonwealth jurisdictions that company directors are subject to a duty to consider the interests of creditors as the company nears insolvency. The precise contours of this duty are, however, indeterminate. Particular questions surround when the duty arises and what it requires of directors. Courts in the UK and Australia have provided different answers to these questions. This article critically examines jurisprudence from the UK and Australia and concludes that the position adopted by the England and Wales Court of Appeal is preferable.

Acknowledgements

The authors thank the anonymous referee for helpful comments.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes on contributors

Rosemary Teele Langford is Associate Professor, Melbourne Law School, the University of Melbourne.

Ian Ramsay is the Harold Ford Professor of Commercial Law, Redmond Barry Distinguished Professor and Director of the Centre for Corporate Law, Melbourne Law School, the University of Melbourne.

Notes

1 In BTI 2014 LLC v Sequana SA [2019] EWCA Civ 112, [2019] 1 BCLC 347 [118] David Richards J referred to this duty as ‘the creditors’ interests duty’. This article adopts the same terminology.

2 (1976) 137 CLR 1.

3 Re Smith and Fawcett Ltd [1942] Ch 304, 306; Australian Securities and Investments Commission v Lewski [2018] HCA 63, (2018) 132 ALR 286, 304 [71] citing Rosemary Teele Langford, Directors’ Duties: Principles and Application (Federation Press 2014) 61 [4.2.2].

4 See Explanatory Notes to the Companies Act 2006 [332].

5 In England see, e.g. Re Horsley & Weight Ltd [1982] Ch 442; West Mercia Safetywear Ltd v Dodd [1988] BCLC 250; Brady v Brady [1988] BCLC 20; Colin Gwyer & Associates Ltd v London Wharf (Limehouse) Ltd [2002] EWHC 2748 (Ch), [2003] BCC 885; Re MDA Investment Management Ltd; Whalley v Doney [2003] EWHC 2227 (Ch), [2004] 1 BCLC 217; Roberts (Liquidator of Onslow Ditchling Ltd) v Frohlich [2011] EWHC 257 (Ch), [2011] 2 BCLC 625; GHLM Trading Ltd v Maroo [2012] EWHC 61 (Ch), [2012] 2 BCLC 369; Vivendi SA v Richards [2013] EWHC 3006 (Ch), [2013] BCC 771; Re Loquitor Ltd [2003] EWHC 999 (Ch), [2003] 2 BCLC 442; Re HLC Environmental Projects Ltd; Hellard v Carvalho [2013] EWHC 2876 (Ch), [2014] BCC 337.

6 (1976) 137 CLR 1, 7.

7 (1986) 4 NSWLR 722, 730 (Kinsela).

8 [1988] BCLC 250.

9 ibid 252.

10 ibid 253. Some of the early analysis of the duty was undertaken in the following articles: LS Sealy, ‘Directors’ “Wider” Responsibilities – Problems Conceptual, Practical and Procedural’ (1987) 13 Monash University Law Review 165; Justin Dabner, ‘Directors’ Duties – The Schizoid Company’ (1988) 6 Company and Securities Law Journal 105; Sarah Worthington ‘Directors’ Duties, Creditors’ Rights and Shareholder Intervention’ (1991) 18 Melbourne University Law Review 121.

11 See Andrew Keay, ‘The Director’s Duty to Take into Account the Interests of Company Creditors: When Is It Triggered?’ (2001) 25 Melbourne University Law Review 315; Re New World Alliance Pty Ltd: Sycotex v Baseler (1994) 51 FCR 425, 444–45; Kinsela v Russell Kinsela Pty Ltd (1986) 4 NSWLR 722, 730; Nicholson v Permakraft (NZ) Ltd (1985) 1 NZLR 242, 249–50.

12 [2015] UKSC 23, [2016] AC 1 [104].

13 See The Hon Justice KM Hayne AC, ‘Directors’ Duties and A Company’s Creditors’ (2014) 32 Melbourne University Law Review 795; Worthington, (n 10). For other criticisms see Sealy, (n 10); DD Prentice, ‘Creditors’ Interests and Directors’ Duties’ (1990) 10 Oxford Journal of Legal Studies 265; Ross Grantham, ‘The Judicial Extension of Directors’ Duties to Creditors’ (1991) 1 Journal of Business Law 1.

14 Cf Hayne, (n 13); Sealy, (n 10). For further discussion see Kristen van Zwieten, ‘Director Liability in Insolvency and Its Vicinity’ (2018) 38 Oxford Journal of Legal Studies 382; Andrew Keay, ‘Directors’ Duties to Creditors: Contractarian Concerns Relating to Efficiency and Over-Protection of Creditors’ (2003) 65 Modern Law Review 665; AR Keay, ‘Directors’ Duties and Creditors’ Interests’ (2014) 130 Law Quarterly Review 443; Andrew Keay, Directors’ Duties (3rd edn, LexisNexis 2016) [13.12]–[13.14].

15 See Walker v Wimborne (1976) 137 CLR 1, 6–7, extracted in Section 2.2 above.

16 See also Bell Group Ltd (in liq) v Westpac Banking Corporation (No 9) [2008] WASC 239, (2008) 39 WAR 1, 535 [4396]; Lady Justice Arden, ‘Companies Act 2006 (UK): A New Approach to Directors’ Duties’ (2007) 81 Australian Law Journal 162, 168; Paul Davies and Jonathan Rickford, ‘An Introduction to the New UK Companies Act’ [2008] European Company and Financial Law Review 48; JD Heydon, ‘Directors’ Duties and the Company’s Interests’ in PD Finn (ed), Equity and Commercial Relations (Lawbook 1987) 120, 124.

17 [1987] 1 All ER 114, 118. See also Jeffree v National Companies and Securities Commission [1990] WAR 183; Nicholson v Permakraft (NZ) Ltd [1985] 1 NZLR 242, 254.

18 [2000] HCA 43, (2000) 201 CLR 603 [94].

19 (1994) 51 FCR 425, 445. See also Multinational Gas and Petrochemical Co v Multinational Gas and Petrochemical Services Ltd [1983] 2 All ER 563, 585; Yukong Line Ltd of Korea v Rendsburg Investments Corp of Liberia [1988] 2 BCLC 485.

20 See the judgment of Toulson J in Yukong Lines Ltd of Korea v Rendsburg Investments Corporation [1998] 2 BCLC 485, 503.

21 Due to the operation of the rule in Barnes v Addy (1874) LR 9 Ch App 244 (CA) third parties may be liable in certain circumstances. Where directors have breached the creditors’ interests duty and third parties such as creditors have knowingly received property or knowingly assisted in the breach such third parties may be liable. In the UK this head of liability is preserved by s 178 of the Companies Act 2006. Liability of creditors based on the rule in Barnes v Addy was a significant feature of the Bell group litigation, discussed in Section 4.2 below.

22 See Insolvency Act 1986 s 423.

23 ibid s 238.

24 ibid s 239.

25 See Re Mea Corporation Ltd, Secretary of State for Trade and Industry v Aviss [2006] EWHC 1846 (Ch), [2007] 1 BCLC 618; Re Genosyis Technology Management Ltd, Wallach v Secretary of State for Trade and Industry [2006] EWHC 989 (Ch), [2007] 1 BCLC 208; Brenda Hannigan, Company Law (5th edn, Oxford University Press 2018) [10.21]–[10.45]. For discussion of the interaction between the creditors’ interests duty and rules relating to preferences see van Zwieten, (n 14).

26 Section 588G applies where the company is insolvent at the time of incurring a particular debt (or debts including that debt) and at that time there were reasonable grounds for suspecting that the company was insolvent or would so become insolvent.

27 See generally Corporations Act 2001 (Cth) s 588FE.

28 See, e.g. BTI 2014 LLC v Sequana SA [2019] EWCA Civ 112, [2019] 1 BCLC 347 [201].

29 Company Law Review Steering Committee, Modern Company Law for a Competitive Economy – Final Report [3.19].

30 Department of Trade and Industry, Modernising Company Law (White Paper, CM 553-1 (2002)) [3.11]:

Directors would need to take a finely balanced judgment, and fears of personal liability might lead to excessive caution. This would run counter to the ‘rescue culture’ which the Government is seeking to promote through the Insolvency Act 2000 and the Enterprise Bill now before Parliament.

31 [2017] EWHC 28, [2018] 1 BCLC 623 [119].

32 Bell Group Ltd (in liq) v Westpac Banking Corporation (No 9) [2008] WASC 239, (2008) 39 WAR 1 [4445]. See also Grove v Flavel (1986) 43 SASR 410.

33 See, e.g. Kinsela v Russell Kinsela Pty Ltd (1986) 4 NSWLR 722; Liquidator of West Mercia Safetywear Ltd v Dodd [1988] BCLC 250; Re Pantone 485 Ltd; Miller v Bain [2001] EWHC 705 (Ch), [2002] 1 BCLC 266; Colin Gwyer & Associates Ltd v London Wharf (Limehouse) Ltd [2002] EWHC 2748 (Ch), [2003] 2 BCLC 153.

34 BTI 2014 LLC v Sequana SA [2019] EWCA Civ 112, [2019] 1 BCLC 347 [147] citing the New Zealand case of Nicholson v Permakraft (NZ) Ltd [1985] 1 NZLR 242, 249, 250.

35 Re MDA Investment Management Ltd (No.1); Whalley v Doney [2003] EWHC 2277 (Ch), [2004] 1 BCLC 217 [75].

36 Colin Gwyer & Associates Ltd v London Wharf (Limehouse) Ltd [2002] EWHC 2748 (Ch), [2003] 2 BCLC 153 [74]; GHLM Trading Ltd v Maroo [2012] EWHC 61 (Ch), [2012] 2 BCLC 368 [173].

37 See Facia Footwear v Hinchcliffe [1998] 1 BCLC 218, 228.

38 E-Clear (UK) plc v Elia [2013] EWCA Civ 1114, [2013] 2 BCLC 455 [24].

39 See BTI 2014 LLC v Sequana SA [2016] EWHC 1686 (Ch), [2017] 1 BCLC 453 [464]–[468]; Singularis Holdings Ltd v Daiwa Capital Markets Europe Ltd [2017] EWHC 257 (Ch), [2017] 1 BCLC 625 [130]; Dickinson v NAL Realisations Ltd [2017] EWHC 28, [2018] 1 BCLC 623 [118], [120]; Secretary of State for Business, Innovation and Skills v Akbar [2017] EWHC 2856 [85].

40 Re MDA Investment Management Ltd (No.1); Whalley v Doney [2003] EWHC 2277 (Ch), [2005] BCC 783 [70].

41 Explanatory Notes to the Companies Act 2006 [332].

42 BTI 2014 LLC v Sequana SA [2019] EWCA Civ 112, [2019] 1 BCLC 347 (BTI v Sequana).

43 This was adopted in Bilta (UK) Ltd (in liq) v Nazir [2013] EWCA Civ 968, [2014] Ch 52.

44 BTI 2014 LLC v Sequana SA [2019] EWCA Civ 112, [2019] 1 BCLC 347 [183], [186] citing Grove v Flavel (1986) 43 SASR 410, 421; Kalls Enterprises Pty Ltd (in liq) v Baloglow [2007] NSWCA 191, (2007) 63 ACSR 557 [162].

45 Robert Austin and Ian Ramsay, Ford, Austin and Ramsay's Principles of Corporations Law (LexisNexis last reviewed February 2020) [8.100.12].

46 [2019] FCA 354, (2019) 135 ACSR 45 (Termite Resources). Note that this case has been appealed.

47 ibid [201]. See also Kinsela v Russell Kinsela Pty Ltd (in liq) (1986) 4 NSWLR 722, 733.

48 [2019] FCA 354, (2019) 135 ACSR 45 [202]–[203].

49 See, e.g. Nicholson v Permakraft (NZ) Ltd (in liq) [1985] 1 NZLR 242, 249.

50 See, e.g. Kinsela v Russell Kinsela Pty Ltd (in liq) (1986) 4 NSWLR 722, 732; see also Downey v Crawford [2004] FCA 1264, [2004] 51 ACSR 182 [177].

51 Linton v Telnet Pty Ltd (1999) 30 ACSR 465, 471, 478.

52 Re New World Alliance Pty Ltd (Receiver and Manager Appointed); Sycotex Pty Ltd v Baseler (No2) (1994) 51 FCR 425, 444; see also ACN 079638501 Pty Ltd v Pattison [2012] VSC 445 [28]; Geneva Finance Ltd v Resource & Industry Ltd [2002] WASC 121, (2002) 169 FLR 152 [26]; International Swimwear Logistics Ltd v Australian Swimwear Company Pty Ltd [2011] NSWSC 488 [112].

53 Bell Group Ltd (in liq) v Westpac Banking Corporation (No 9) [2008] WASC 239, (2008) 39 WAR 1 [4440].

54 ibid [4421].

55 Westpac Banking Corporation v Bell Group Ltd (in liq) (No 3) [2012] WASCA 157, (2012) 44 WAR 1 [2046].

56 Kalls Enterprises Pty Ltd (in liq) v Baloglow [2007] NSWCA 191, (2007) 63 ACSR 557 [162].

57 (1986) 43 SASR 410, 421.

58 See Kalls Enterprises Pty Ltd (in liq) v Baloglow [2007] NSWCA 191, (2007) 63 ACSR 557 [162].

59 Australian Securities and Investments Commission v Somerville [2009] NSWSC 934, (2009) 77 NSWLR 110 [37].

60 See, e.g. Nicholson v Permakraft (NZ) Ltd [1985] 1 NZLR 242, 249; Linton v Telnet Pty Ltd [1999] NSWCA 33, (1999) 30 ACSR 465 [26].

61 Wright v Frisina (1983) 9 ACLR 532 referred to in Grove v Flavel (1986) 43 SASR 410, 420; Papallo v Queensland Building Services Authority [2012] QCAT 59 [53].

62 Grove v Flavel (1986) 43 SASR 410.

63 Australian Securities and Investments Commission v Sydney Investment House Equities Pty Ltd [2008] NSWSC 1224, (2008) 69 ACSR 1 [36].

64 Lewis v Doran [2005] NSWCA 243, (2005) 219 ALR 555 [25].

65 [2019] QCA 27, (2019) 136 ACSR 26 [47]. See also Parbery v QNI Metals Pty Ltd [2018] QSC 107, (2018) 358 ALR 88 [243]: ‘A financial state short of insolvency can trigger the obligation to consider the interests of creditors, including where the company is “of doubtful solvency” or where prejudice is caused to creditors or one group of creditors.’

66 [2019] FCA 354, (2019) 135 ACSR 45 [209].

67 ibid [708].

68 ibid [710].

69 [2016] EWHC 1686 (Ch), [2017] 1 BCLC 453 [464]–[468].

70 [2002] 1 BCLC 266 [67]–[68], [72].

71 [2013] EWHC 2876 (Ch) [92], referring to Colin Gwyer & Associates Ltd v London Wharf (Limehouse) Ltd [2002] EWHC 2748 (Ch), [2003] 2 BCLC 153; Brady v Brady [1988] BCLC 20 (CA) 40h-I; Roberts v Frohlich [2011] EWHC 257 (Ch), [2011] 2 BCLC 625 [85]. See also Re Idessa (UK) Ltd (in liq) [2011] EWHC 804 (Ch), [2012] BCC 315 [54]; Re Micra Contracts Ltd (in liq) [2016] BCC 153 [23]; Re Pro4Sport Ltd; Hedger v Adams [2015] EWHC 2540 (Ch), [2016] BCC 390 [35]. Note that some earlier cases required that directors take creditors’ interests into account – see, e.g. GHLM Trading Limited v Maroo [2012] EWHC 61 (Ch), [2012] 2 BCLC 369 [164].

72 See Keay, ‘Directors’ Duties and Creditors’ Interests’ (n 14), 454; see also at 456.

73 [2019] EWCA Civ 112, [2019] 1 BCLC 347.

74 ibid [199].

75 ibid [198].

76 ibid [222].

77 Bell Group Ltd (in liq) v Westpac Banking Corporation (No 9) [2008] WASC 239, (2008) 39 WAR 1 [4436] – [4440] (Bell v Westpac).

78 ibid [4439]. Owen J’s views were disapproved by John Randall QC in Re HLC Environmental Projects Ltd; Hellard v Carvlho [2013] EWHC 2876 (Ch) [92]. On appeal the judges expressed different views as to the contours of the creditors’ interests duty, although all three found the directors to be in breach of duty – see, Westpac Banking Corporation v Bell Group Ltd (in liq) (No 3) [2012] WASCA 157, (2012) 44 WAR 1 [767], [849], [920], [2046], [2818]. Drummond AJA appeared to suggest that directors might have to take positive action in such contexts by referring to directors needing to ‘give proper effect to the interests of creditors’ – see Westpac Banking Corporation v Bell Group Ltd (in liq) (No 3) [2012] WASCA 157, (2012) 44 WAR 1 [2031].

79 [2008] WASC 239, (2008) 39 WAR 1, 663 [6064].

80 ibid [6088].

81 [2019] FCA 354, (2019) 135 ACSR 45 [695].

82 Termite Resources NL (in liq) v Meadows, in the matter of Termite Resources NL (in liq) (No 2) [2019] FCA 354, (2019) 135 ACSR 45 [208] citing Robert P Austin and Ian M Ramsay, Ford, Austin and Ramsay’s Principles of Corporations Law (16th edn, LexisNexis 2015) [8.100.12].

83 [2019] FCA 354, (2019) 135 ACSR 45.

84 Australian Securities and Investments Commission, Insolvency: A Guide for Directors, Information Sheet 42, September 2017, 1 (emphasis in the original).

85 [2019] EWCA Civ 112, [2019] BCLC 347.

86 ibid [176] (emphasis in the original). In the first instance judgment (BTI 2014 LLC v Sequana SA [2016] EWHC 1686 (Ch), [2017] 1 BCLC 453) Rose J, at [377], gave the following example to illustrate the difference between the two tests:

To say that my house is on the verge of burning down seems to me to describe a much more worrying situation compared to one in which there is a risk which is something more than a remote risk of my house burning down. Similarly, giving the words their natural meaning, a test set at the level of ‘a real (as opposed) to remote risk of insolvency’ would appear to set a much lower threshold than a test set at the level of being ‘on the verge of insolvency’ or of ‘doubtful’ or ‘marginal’ solvency.

87 [2019] EWCA Civ 11, [2019] BCLC 347 [222].

88 See, e.g. Bell Group Ltd (in liq) v Westpac Banking Corporation (No 9) [2008] WASC 239, (2008) 39 WAR 1.

89 [2002] EWHC 2748 (Ch), [2004] 1 BCLC 217 [81]. This is also the position adopted by Keay, who argues that the company’s affairs should be administered so as to ensure that creditors will be repaid more of the funds that are owed to them – see Keay, Directors’ Duties, (n 14) [13.67]; Keay, ‘Directors’ Duties and Creditors’ Interests’, (n 14), 458.

90 [1985] 1 NZLR 242, 249. In making this statement, Cooke J referred to it as a matter of ‘business ethics’ but then proceeded to state that it was appropriate to ‘translate this into a legal obligation’: at 249.

91 It is also consistent with the statement of Ward J of the Supreme Court of New South Wales in International Swimwear Logistics Ltd v Australian Swimwear Company Pty Ltd [2011] NSWSC 488 [111] that the ‘interests of creditors are generally expressed in clearly defined monetary terms’. Her Honour cited Lindgren J of the Federal Court of Australia in Deputy Commissioner of Taxation v Alternative Business Solutions (Aust) Pty Ltd (administrators appointed) [2006] FCA 400, (2006) 24 ACLC 435 [9] where, in the context of an application under s 440A(2) of the Corporations Act 2001 (Cth) to adjourn the hearing of an application to wind up a company while the company was under administration, his Honour stated that ‘When s 440A speaks of “the interests of creditors” it is referring to the creditors' interests as creditors, that is to say, to their interests in recovering what is owed to them.’

92 [2019] EWCA Civ 112, [2019] BCLC 347.

93 This approach had been advocated by Keay prior to the decision in BTI v Sequana – see Keay, Directors’ Duties, (n 14) [13.47] citing Andrew Keay, Company Directors’ Responsibilities to Creditors (Routledge-Cavendish 2007) 215; Vanessa Finch, ‘Directors’ Duties: Insolvency and the Unsecured Creditor’ in Alison Clarke (ed), Current Issues in Insolvency Law (Stevens 1991) 106.

94 For studies on court judgments based on s 588G, see Stacey Steele and Ian Ramsay, ‘Insolvent Trading in Australia: A Study of Court Judgments from 2004 to 2017’ (2019) 27 Insolvency Law Journal 156; Anna MacFarlane, ‘Safe Harbour Reforms – Should Insolvent Trading Provisions be Reformed?’ (2010) 18 Insolvency Law Journal 138; Paul James, Ian Ramsay and Polat Siva, ‘Insolvent Trading – An Empirical Study’ (2004) 12 Insolvency Law Journal 210.

95 Commonwealth Treasury of Australia, Insolvent Trading: A Safe Harbour for Reorganisation Attempts Outside of External Administration, January 2010.

96 ibid [3.8].

97 Productivity Commission, Business Set-up, Transfer and Closure, Report No 75, September 2015, 378.

98 Explanatory Memorandum, Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill 2017 (Cth) 3.

99 ibid.

100 ibid 6–7.

101 See ns 10–14 above and accompanying text.

102 See, e.g. Kalls Enterprises Pty Ltd (in liquidation) v Baloglow [2007] NSWCA 191, (2007) 63 ACSR 557 [162]; Facia Footwear Ltd (in administration) v Hinchcliffe [1998] 1 BCLC 218, 228; Re MDA Investment Management Ltd (No.1); Whalley v Doney [2003] EWHC 2277 (Ch), [2004] 1 BCLC 217 [75].

103 The need for directors to consider the interests of creditors on an ongoing basis is evident in the judgment of HHJ David Cooke in LRH Services Ltd (in liquidation) v Trew [2018] EWHC 600 (Ch). When considering s 172(1) of the Companies Act 2006 (UK), his Honour stated, at [30]:

Success of the company for the benefit of members requires it to be able to meet its liabilities to creditors, since if it does not do so it is liable to be wound up, putting an end to its business and, necessarily, its ‘success’.

104 For criticism of a test based on balancing see also Keay, ‘Directors’ Duties and Creditors’ Interests’, (n 14), 460.

105 The Cambridge Dictionary, definition of ‘balancing’, https://dictionary.cambridge.org/dictionary/english/balancing

106 The Free Dictionary, definition of ‘balancing’, https://legal-dictionary.thefreedictionary.com/balancing

107 In International Swimwear Logistics Ltd v Australian Swimwear Company Pty Ltd [2011] NSWSC 488 [102] Ward J stated:

It is a fundamental principle of company law that directors owe their duties to the company as a whole. This phrase is generally interpreted to mean the shareholders as a whole (Greenhalgh v Arderne Cinemas Ltd [1951] Ch 286 at [291]; [1950] 2 All ER 1120). The consideration as to whether directors have complied with their duties involves a determination of whether the conduct diverged from the interests of the company’s shareholders (often referred to as the ‘shareholder primacy norm’).

108 See, e.g. Colin Gwyer and Associates Ltd v London Wharf (Limehouse) Ltd [2002] EWHC 2748 (Ch), [2004] 1 BCLC 217 [74] and Re HLC Environmental Projects Ltd (in liquidation); Hellard v Carvalho [2013] EWHC 2876 (Ch), [2014] BCC 337 [92].

109 See Keay, ‘Directors’ Duties and Creditors’ Interests’, (n 14), 454; Paul L Davies and Sarah Worthington, Gower’s Principles of Modern Company Law (10th edn, Sweet & Maxwell 2016) [9–14].

110 Bell Group Ltd (in liq) v Westpac Banking Corporation (No 9) [2008] WASC 239, (2008) 39 WAR 1.

111 For practical suggestions see Mark Arnold and Marcus Haywood, ‘Duty to Promote the Success of the Company’ in Simon Mortimore (ed), Company Directors: Duties, Liabilities and Remedies (2nd edn, Oxford University Press 2013)[12.63], [12.85]; Keay, ‘Directors’ Duties and Creditors’ Interests’, (n 14), 462–71; Keay, Directors’ Duties, (n 14), [13.91]–[13.93]. Arnold and Haywood suggest that, before committing the company to a particular transaction, directors should satisfy themselves that it is appropriate to enter it having regard to the effect it will have on the company’s solvency, the value to be derived from it, the benefits that will accrue to the company’s business and any potential prejudice to creditors’ interests generally that may ensue – see Arnold and Haywood, ibid, [12.86].

112 See, e.g. Re Pro4Sport Ltd; Hedger v Adams [2015] EWHC 2540, [2016] 1 BCLC 257 [34], [38]; Westpac Banking Corporation v Bell Group Ltd (in liq) (No 3) [2012] WASCA 157, (2012) 44 WAR 1 [2819] but note also Charterbridge Corp Ltd v Lloyds Bank Ltd [1970] Ch 62, 74, Re HLC Environmental Projects Ltd; Hellard v Carvalho [2013] EWHC 2876 (Ch), [2014] BCC 337 [92].

113 See, e.g. Re Pantone 485 Ltd; Miller v Bain [2002] 1 BCLC 266 [72]; GHLM Trading Ltd v Maroo [2012] EWHC 61 (Ch), [2012] 2 BCLC 369 [168]; Re HLC Environmental Projects Ltd; Hellard v Carvalho [2013] EWHC 2876 (Ch), [2014] BCC 337 [106]; Re Micra Contracts Ltd (in liq) [2016] BCC 153 [82]; Capital for Enterprise Fund UK LLP v Bibby Financial Services Ltd [2015] EWHC 2593 (Ch) [90]; see also International Swimwear Logistics Ltd v Australian Swimwear Company Pty Ltd [2011] NSWSC 488 [115]; Ultraframe (UK) Ltd v Fielding [2005] EWHC 1638 (Ch), [2006] FSR 17 [1304].

114 See Keay, ‘Directors’ Duties and Creditors’ Interests’, (n 14), 466–71; Keay, Directors’ Duties, (n 14), [13.68]–[13.72]; Van Zwieten, (n 14), 388; for other commentary see Sealy, (n 10); Anil Hargovan and Jason Harris, ‘For Whom the Bell Tolls: Directors’ Duties to Creditors after Bell’ (2013) 35 Sydney Law Review 433.

Log in via your institution

Log in to Taylor & Francis Online

PDF download + Online access

  • 48 hours access to article PDF & online version
  • Article PDF can be downloaded
  • Article PDF can be printed
USD 53.00 Add to cart

Issue Purchase

  • 30 days online access to complete issue
  • Article PDFs can be downloaded
  • Article PDFs can be printed
USD 408.00 Add to cart

* Local tax will be added as applicable
 

Related Research

People also read lists articles that other readers of this article have read.

Recommended articles lists articles that we recommend and is powered by our AI driven recommendation engine.

Cited by lists all citing articles based on Crossref citations.
Articles with the Crossref icon will open in a new tab.