The court considered the liability of directors for an unlawfully paid dividend.
Held: Robert Walker LJ: ‘The prospect of the former directors being able to obtain contribution from innocent recipients of unlawful dividends was debated (somewhat inconclusively) in the course of the appeal hearing. The statutory remedy in s.277 of the Act is not in point (since it is available only to the company, and only against a shareholder with actual or constructive knowledge of the unlawfulness of the dividend).’
Judges:
Robert Walker LJ, Sir Andrew Morritt V-C and Sedley LJ
Citations:
[2001] EWCA Civ 712, [2002] 2 BCLC 531, [2001] 2 HCLC 53
Links:
Jurisdiction:
England and Wales
Cited by:
Cited – DEG-Deutsche Investitions und Entwicklungsgesellschaft mbH v Koshy and Other (No 3); Gwembe Valley Development Co Ltd (in receivership) v Same (No 3) CA 28-Jul-2003
The company sought to recover damages from a director who had acted dishonestly, by concealing a financial interest in a different company which had made loans to the claimant company. He replied that the claim was out of time. At first instance the . .
Cited – It’s A Wrap (UK) Ltd v Gula and Another ChD 16-Sep-2005
The defendant company directors were accused of having paid dividends to themselves when the company was in fact making a loss.
Held: A claim might lie, but the pleadings did not phrase it adequately, and an amendment would be improper. Though . .
Cited – It’s A Wrap (UK) Ltd v Gula and Another CA 11-May-2006
The company was said to have paid dividends unlawfully, in that the directors who were the shareholders had paid themselves dividends knowing that the company had not earned enough to pay them.
Held: Where shareholders had knowledge of the . .
Lists of cited by and citing cases may be incomplete.
Company
Updated: 23 May 2022; Ref: scu.135404
