In order to try to trade out of difficulties, company directors decided to give priority to the payment of trade and banking debts over debts due to the revenue.
Held: An appeal against the refusal to disqualify the Directors succeeded. There was no dispute as to the facts alleged and so the appeal court was in as good a position as the first instance court to make the assessment. It would allow a wrong message to go out that such an approach would not be strongly disapproved. Where directors had deliberately given priority to certain trade creditors by a policy of non-payment of other creditors of a certain class, was inevitably to lead to a disqualification. The company had withheld substantial sums which had been retained from payments to sub-contractors and which should have been paid to the Inland Revenue. They had used the money in the hope of trading out of their difficulties.
Gazette 29-Jun-2000, Times 05-Jul-2000,  BCC 579
England and Wales
Cited – Cathie and Another v Secretary of State for Business, Innovation and Skills CA 1-Jun-2012
The directors appealed against disqualification orders made against them under the 1986 Act. Their company had become insolvent, owing substantial arrears of PAYE and NI contributions. The revenue had said that they had paid other creditors first. . .
Lists of cited by and citing cases may be incomplete.
Updated: 17 June 2022; Ref: scu.82205