Holland v Revenue and Customs and Another: CA 2 Jul 2009

The appellant supported IT workers. Through his own company, he set up companies in which his company was a director, and which companies in turn employed the IT workers securing substantial savings in higher rate Corporation Tax.
Held: The defendant’s appeal succeeded. Though the appellant was not himself a director in the companies, his company was and it in turn held the directorships, and such a person might according to the circumstances be personally liable for misfeasance as a de facto director of them under section 744. In this case he was not.

Ward, Rimer, Elias LJJ
[2009] EWCA Civ 625, [2009] STC 1639, [2009] STI 2026, Times 28-Jul-2009, [2009] 2 BCLC 309
Insolvency Act 1986 212, Companies Act 1985 727 744
England and Wales
Appeal fromHM Revenue and Customs v Holland and Another ChD 24-Jun-2008
The Revenue sought to recover from the defendant substantial sums in respect of allegedly unlawful dividends paid from an insolvent company. They said that the defendant and his wife were de facto directors.
Held: Claims agains the second . .
CitedSalomon v A Salomon and Company Ltd HL 16-Nov-1896
A Company and its Directors are not same paersons
Mr Salomon had incorporated his long standing personal business of shoe manufacture into a limited company. He held nearly all the shares, and had received debentures on the transfer into the company of his former business. The business failed, and . .
CitedIn re Hydrodam (Corby) Limited ChD 1994
ET plc wholly owned MCP Ltd which wholly owned Landsaver MCP Limited, which wholly owned Hydrodam (Corby) Limited (‘HCL’). The only de jure directors of HCL were two Channel Island companies. HCL went into compulsory liquidation and its liquidator . .
CitedIn re Bulawayo 1907
The court asked as to the possibility of appointing a company as a director of another company in the absence of an express power in the articles. . .
CitedSecretary of State for Trade and Industry v Hall and Nuttall ChD 28-Jul-2006
The Secretary sought disqualification of the defendants. The second defendant had not been a director of the company, but director of another company which in turn held a directorship in the defaulting company.
Held: The claim failed: ‘i) As I . .
CitedRe Kaytech International plc; Secretary of State for Trade and Industry v Kaczer and others CA 1999
Robert Walker LJ said that the expression ‘de facto director’ had been in use for a long time, and commented on the failure to distinguish in pleadings between pleas that someone was a shadow or a de facto director. The two different labels were not . .

Cited by:
Appeal fromHolland v Revenue and Customs and Another SC 24-Nov-2010
The Revenue sought an order under section 212 of the 1986 Act, for payment of the tax debts of the insolvent company by a de facto director. H had organised a scheme under which IT contractors had worked through companies created by him under a . .

Lists of cited by and citing cases may be incomplete.

Company, Corporation Tax

Updated: 02 November 2021; Ref: scu.347298