UK: Supreme Court hears de facto director case

The Supreme Court begins hearing argument today in Holland v HMRC Commissioners: see here. The court will consider whether the director of a company which acted as a director of 42 companies was a de facto director of those 42 companies. The High Court ([2008] EWHC 2200 (Ch)) held that the director was a de facto director. The Court of Appeal ([2009] EWCA Civ 625) held that he was not.

UK: Supreme Court to hear appeal in de facto director case

A post on the UK Supreme Court blog - a blog about the court with editors from Matrix Chambers and Olswang LLP , which was formally launched last week - informs me that permission has been granted for an appeal to the Supreme Court in Holland v HMRC [2009] EWCA Civ 625, [2009] 2 BCLC 309, [2009] STC 1639. For a summary of the Court of Appeal's decision, see this post. 

England and Wales: The meaning of 'de facto' director

In Gemma Ltd (in liquidation) v Davies and another [2008] EWHC 546 (Ch), [2008] WLR (D) 89, the High Court explored the circumstances in which an individual would be regarded as a de facto director for the purposes of Section 212 of the Insolvency Act (1986). The judgment, which has not yet been published on BAILII, contains a useful overview of the authorities. The trial judge outlined several principles:

(1) It must be proved that the alleged de facto director performed functions that could only be discharged by a director.

(2) There is no need to prove that a de facto director was held out as a director.

(3) The director must have participated on an equal footing with the other directors and not in a subordinate role.

NB: The Companies Act (2006) does not contain a specific definition for de facto director. Section 250 does, however, define the term "director" (in such a way as to include de facto directors) and Section 251 defines the term "shadow director".