30th April, 2019
In Mental Health Care (UK) Limited v Edward Lupen Healthcare Limited & others [2019] EWHC 1 (Ch) the court had to consider whether a defendant was a de facto director. Mark Baldwin of our Insolvency Service team considers the decision.
In a widely drafted claim, the Claimant (C) alleged breaches of director’s duties by the second defendant (D) and, to succeed in those claims, had to prove that D was a de facto director of C.
The factors that C argued constituted D to be a de facto director were as follows: -
His Honour Judge Pelling QC found that:
D was therefore found not to be a de facto director.
This is an interesting illustration of the pitfalls in making an allegation of de facto directorship, the evidencing of which is dealt with in my previous article on the topic (click here to read the article).
It is therefore important to look beyond the title of the putative de facto director and focus upon whether he/she was actually on an equal footing with those who were formally appointed.
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