Bilta (UK) Ltd and Others v Nazir and Others: ChD 30 Jul 2012

The company was said to have engaged in a fraud based on false European Trading Scheme Allowances, and had been wound up by the Revenue. The liquidators, in the company name, now sought recovery from former directors and associates.
Held: The court dismissed the application: ‘First, the fact that there is, in accordance with my conclusions, a claim against these defendants both at common law and under s.213 Insolvency Act 1986 is no reason for extending the defence of ex turpi causa so as to provide a defence to the claim by Bilta. There will be cases in which a company is defrauded to the detriment of creditors but is not being wound up. Second, there is no risk of any of the malefactors, such as Mr Chopra, benefitting from any judgment Bilta or the Liquidators may obtain. The claim under s.213 necessarily gives rise to the discretion of the court under s.213(2). Any damages or specific relief granted in respect of Bilta’s claim can be limited and directed to the creditors’

Sir Andrew Morritt Ch
[2012] STC 2424, [2012] EWHC 2163 (Ch), [2012] WLR(D) 236, [2013] 2 WLR 825, [2013] 1 All ER 375, [2013] BCC 235, [2012] STI 2554
Insolvency Act 1986 213, Companies Act 2006 172 180
England and Wales
See AlsoBilta (UK) Ltd (In Liquidation) v Nazir and Others ChD 17-May-2010
The sixth defendant resisted a claim against it saying that matters between them were governed by a framework agreement which provided for matters to be resolved by arbitration. The claimant resisted, denying the arbitration agreement and saying . .
See AlsoBilta (Uk) Ltd v Nazir and Others ChD 24-Nov-2010
The company had been wound up by the Revenue on the basis that it had been used for a substantial VAT fraud. The liquidators now sued those said to have participated. A defendant denied the jurisdiction because of a disputed arbitration agreement. . .
CitedMoore Stephens (A Firm) v Stone Rolls Ltd (in liquidation) HL 30-Jul-2009
The appellants had audited the books of the respondent company, but had failed to identify substantial frauds by an employee of the respondent. The auditors appealed a finding of professional negligence, relying on the maxim ex turpi causa non . .
CitedGreener Solutions Ltd v Revenue and Customs FTTTx 26-Aug-2010
FTTTx INPUT TAX – MTIC fraud – whether agent’s knowledge attributed to company – no – whether company should have known of connection to fraud – no – appeal allowed . .
CitedHMRC v Greener Solutions UTTC 18-Jan-2012
UTCC INPUT TAX – MTIC fraud – whether agent’s knowledge attributed to company – yes-appeal allowed
Greener Solutions sought repayment of the input tax incurred in respect of mobile telephones it had bought . .
CitedWest Mercia Safetywear Ltd v Dodds CA 1988
If a company continues to trade whilst insolvent but in the expectation that it would return to profitability, it should be regarded as trading not for the benefit of the shareholders, but for the creditors also. If there is a possibility of . .
CitedMasri v Consolidated Contractors International Co Sal and Others HL 30-Jul-2009
The claimant sought to enforce a judgment debt against a foreign resident company, and for this purpose to examine or have examined a director who lived abroad. The defendant said that the rules gave no such power and they did, the power was outside . .
CitedEx parte Blain; In re Sawers CA 1-Aug-1879
Where legislation regulates the conduct of an individual, it may be so construed as to limit it to conduct by United Kingdom citizens anywhere.
James LJ referred to ‘broad, general, universal principle that English legislation, unless the . .
CitedIn re Seagull Manufacturing Co Ltd ChD 1992
The court considered the power of an English court over a foreign resident under section 133.
Held: In contrast with the private examination provisions, on its true construction section 133 applies to those who are within the class of persons . .
CitedRe Paramount Airways Ltd (In Administration) CA 8-Apr-1992
It was said that there had been a transction at an undervalue within section 238. It was given effect by a transfer to a bank in Jersey, from which recovery was no sought. The bank claimed that the section did not have extra-territorial effect.
CitedHM Revenue and Customs v Begum and Others ChD 15-Jul-2010
The Commissioners claim was founded in an alleged conspiracy from a ‘missing trader intra-community fraud’ amounting to andpound;96 million.
Held: Section 423 had extra territorial effect. . .
CitedRe International Tin Council ChD 1987
An order for the winding up of a foreign company operates universally, applies to all the foreign company’s assets and brings into play the full panoply of powers and duties under the Insolvency Act 1986 like any other winding up order. Millett J . .
CitedRe Howard Holdings Inc ChD 1998
It is difficult to envisage any developed system of corporate law which does not impose some obligation on directors to consider whether the company is solvent and, if not, to consider what should be done about it.
Chadwick J said: ‘I accept . .
CitedCarman v The Kronos Group SA 2006
The court acted on the basis that section 213 of the 1996 Act had extra-territorial effect. . .

Cited by:
Appeal fromJetivia Sa and Another v Bilta (UK) Ltd and Others CA 31-Jul-2013
Defendants appealed against refusal of their request for a summary striking out for lack of jurisdiction, of the claims against them arising from their management of the insolvency of the first defendant. . .
Appeal fromJetivia Sa and Another v Bilta (UK) Ltd and Others SC 22-Apr-2015
The liquidators of Bilta had brought proceedings against former directors and the appellant alleging that they were party to an unlawful means conspiracy which had damaged the company by engaging in a carousel fraud with carbon credits. On the . .

Lists of cited by and citing cases may be incomplete.


Updated: 10 December 2021; Ref: scu.463317