Caley Oils Limited (in Administration) Against David John Wood
| Jurisdiction | Scotland |
| Judge | Lord Clark |
| Neutral Citation | [2018] CSOH 42 |
| Date | 20 April 2018 |
| Docket Number | CA19/16 |
| Court | Court of Session |
| Published date | 20 April 2018 |
OUTER HOUSE, COURT OF SESSION
[2018] CSOH 42
CA19/16
OPINION OF LORD CLARK
In the cause
CALEY OILS LIMITED (IN ADMINISTRATION), Bishop’s Court, 29 Albyn Place, Aberdeen
AB10 1YL and EWEN ROSS ALEXANDER and GORDON MALCOLM MACLURE, both of
Bishop’s Court, 29 Albyn Place, Aberdeen AB10 1YL, the Joint Administrators thereof
Pursuers
against
DAVID JOHN WOOD, residing at Bedewood House, Cullen, AB56 4XN
Defender
Pursuer: D Thompson QC; Davidson Chalmers LLP
Defender: Party
20 April 2018
Introduction
[1] In this action, the pursuers, as the joint administrators of Caley Oils Limited (“the
Company”), seek recovery of certain sums from the defender, who is the sole director of the
Company. The joint administrators were appointed on 20 August 2015. The first sum sought
is £295,119, said by the pursuers to be the total sum of money loaned by the Company to the
defender and not repaid. The second sum sought is £150,000, made up of two payments by
the Company to the defender on 12 August 2015. This second sum is claimed on two
separate grounds: firstly, that the payments constituted unfair preferences for the purposes
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of section 243 of the Insolvency Act 1986 (“the 1986 Act”); and, secondly, that in making
payment of these sums to himself, the defender acted in breach of his duty at common law
to have regard to the interests of the Company’s creditors.
Procedural history
[2] In terms of substantive procedure, the procedural history of the case can be summed
up as follows. Following a debate on 24 August 2016, decree de plano was granted by the
Lord Ordinary who heard the debate, for payment by the defender to the pursuers of
£280,116 (the sum then sued for), and the pursuers were awarded the expenses of process.
The defender reclaimed. The Inner House allowed the defender time to lodge a minute of
amendment. By interlocutor dated 3 May 2017 the defender’s minute of amendment was
allowed to be received, the pursuers were given time to lodge answers and the interlocutors
of the Lord Ordinary granting decree de plano and awarding expenses were recalled.
Following adjustment of the minute and amendment and answers the case was once again
appointed for debate and a motion for summary decree, enrolled by the pursuers, was
continued to be heard on the same day as the diet of debate. On 3 November 2017, the case
called before me for the diet of debate and on the pursuers’ motion for summary decree.
Having considered the note of argument lodged by the defender, who is a party litigant, it
became apparent to me that factual matters of potential relevance to his defence were raised
in the note but not in the pleadings. I also formed the view, after hearing from the defender,
that he wished to explain further his position on certain matters. I therefore granted a
motion by the defender, which was opposed by the pursuers, to discharge the diet of debate
and to allow him to lodge a further minute of amendment. The pursuers were allowed to
lodge answers to the minute of amendment, if so advised, and both parties were allowed a
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period of adjustment. On 8 December 2017, I allowed the summons and the defences to be
amended in terms of the minute of amendment and answers, as adjusted. On the unopposed
motion of the pursuers, a debate was fixed and the pursuers’ motion for summary decree
was continued to the same diet. In view of the fact that there was to be a motion for
summary decree in which material other than the pleadings could be considered, and that
the defender was a party litigant who might well wish to explain his position more fully
than was set out in his pleadings, I considered it appropriate that both parties be given the
opportunity to lodge any documents and affidavits to be relied upon at the hearing. I also
made orders as to the exchange of documents. Documents and affidavits were lodged. The
hearing took place on 31 January 2018. The defender expressed certain concerns about
documents not having been made available by the pursuers but following an explanation by
senior counsel for the pursuers, in particular as to the matters to be relied upon in relation to
the allegation of insolvency, the defender was content to proceed.
The pursuers’ case in outline
[3] In their pleadings, the pursuers make a number of detailed averments setting out
specific points about the financial position of the Company and aver that as at 12 August
2015 the Company was insolvent. These averments relate to debts due by the Company to
its principal creditor, ASCO UK Limited (“ASCO”). The pursuers’ position, in relation to the
debate, was in short that the defender had made no relevant averments in his defences in
respect of the pursuers’ case that the sum of £150,000 was paid to him by the Company
when the Company was insolvent or verging upon insolvency, and that he acted in breach
of fiduciary duty as director of the Company by making such payment without considering
or having regard to the interests of the Company’s creditors. Separately, the pursuers
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