Re Hydrodan (Corby) Ltd ((in Liquidation))

JurisdictionEngland & Wales
Judgment Date17 December 1994
Date17 December 1994
CourtChancery Division

Chancery Division

Before Mr Justice Millett

In re Hydrodam (Corby) Ltd (in liquidation)

Director - shadow and de facto directors - distinction

Distinguishing shadow directors

It did not follow that where a body corporate was a director of a company, whether a de jure, de facto or shadow director, its own directors were ipso facto directors of that company.

To establish that a person was a de facto director of a company it was necessary to plead and prove that he undertook functions in relation to that company which could properly be discharged only by a director.

Mr Justice Millett so held in the Chancery Division, allowing appeals from orders made in Northampton County Court by District Judge Whitehurst in proceedings by the liquidator of Hydrodam (Corby) Ltd against two of 14 defendants alleged to have been guilty of wrongful trading in relation to the affairs of that company.

Mr A G Bompas for the defendant Leslie Thomas; Mr A G Boyle, QC, for the defendant Dr Hardwick; Mr T Hill for the liquidator.

MR JUSTICE MILLETT said that Hydrodam was a wholly owned indirect subsidiary of Eagle Trust plc and was ordered to be wound up by Northampton County Court on December l3, 1988 on a creditors' petition. The liquidator had alleged that the 14 defendants, including Eagle Trust itself, had been guilty of wrongful trading under section 214 of the Insolvency Act l986.

His application for orders against them was supported by an affidavit setting out the evidence on which he relied. His case was that each of the defendants, directors of Eagle Trust, had personally acted as de facto or shadow directors of Hydrodam.

His Lordship said that shadow director was defined in section 251 of the 1986 Act as a person in accordance with whose instructions the directors of the company were accustomed to act.

Directors could be de jure, validly appointed to the office; de facto, who assumed to act as directors without having been appointed validly or at all; and shadow directors.

His Lordship observed...

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119 cases
  • Shepherds Investments Ltd v Walters and Others
    • United Kingdom
    • Chancery Division
    • 12 April 2006
    ...of Investments, Mr Simmons held himself out as, and he was held out by Investments as, a director in fact. In Re Hydrodam (Corby) Ltd [1994] 2 BCLC 180 Millett J said: "A de facto director is a person who assumes to act as a director. He is held out as a director by the company, and claims ......
  • Gemma Ltd ((in Liquidation)) v Davies and Another; Re Gemma Ltd ((in Liquidation))
    • United Kingdom
    • Chancery Division
    • Invalid date
    ... ... a series of relatively modern cases in which the question of what is meant by a de facto director fell to be considered, namely In re Hydrodam (Corby) Ltd [1994] 2 BCLC 180; In re Richborough Furniture Ltd [1996] 1 BCLC 507; Secretary of State for Trade and Industry v Tjolle [1998] 1 BCLC 333; ... ...
  • Mea Corporation Ltd, Re; Secretary of State for Trade and Industry v Aviss
    • United Kingdom
    • Chancery Division
    • 20 July 2006
    ...of directors, even though not formally appointed as such, are called de facto directors or directors in fact. In Re Hydrodam (Corby) Ltd [1994] BCC 161 Millett J described a de facto director as: "a person who assumes to act as a director. He is held out as a director by the company, claims......
  • Secretary of State for Trade and Industry v Hall
    • United Kingdom
    • Chancery Division (Companies Court)
    • Invalid date
  • Request a trial to view additional results
2 firm's commentaries
  • Formalize your arrangements, don't rely on a love affair
    • Hong Kong
    • JD Supra Hong Kong
    • 14 April 2017
    ...enrichment and a constructive trust. After considering UK cases including HMRC v Holland [2010] 1 WLR 2793, Re Hydrodam (Corby) Ltd [1994] BCC 161 and Reading v AG [1951] AC 507 and without the benefit of submissions and evidence from the defendants, the trial judge held that the Mr Bayram ......
  • Out Of The Shadows Into The Light: 'Shadow Directors' Now Recognized In Bahamian Companies Law
    • Bahamas
    • Mondaq Bahamas
    • 25 February 2014
    ...208), Companies Liquidation Rules 2012. 2 Section 183, Companies Act (as amended by the Companies (Winding Up Amendment) Act 2011). 3 [1994] 2 BCLC 180 4 [1994] 1 BCLC 609 5 ibid 616 6 [2001] Ch 340 7 ibid 8 C Hill, 'Shadow Directors: Influence is the real test' (2000) 38(2) Law Society Gaz......
9 books & journal articles
  • Table of Cases
    • United Kingdom
    • Wildy Simmonds & Hill Law of Insolvent Partnerships and Limited Liability Partnerships Contents
    • 29 August 2015
    ...Ltd, Re [2005] EWCA Civ 1072, [2005] 4 All ER 886 167, 168 Hurst v Bryk [2000] UKHL 19, [2002] 1 AC 185 267, 268 Hydrodan (Corby) Ltd, Re [1994] BCC 161 16 Icopal AS, Re [2013] EWHC 3469 (Ch), [2014] 2 BCLC 11 23 Inertia Partnerships LLP, Re [2007] EWHC 539 (Ch), [2007] Bus LR 879 444 Inlan......
  • Introduction
    • United Kingdom
    • Wildy Simmonds & Hill Law of Insolvent Partnerships and Limited Liability Partnerships Contents
    • 29 August 2015
    ...EWHC 1638 (Ch), [2006] FSR 17 at [1262] per Lewison J, and Re Kaytech International plc [1999] 2 BCLC 351. 58 Re Hydrodan (Corby) Ltd [1994] BCC 161. 59 Ultraframe (UK) Ltd v Fielding and Others [2005] EWHC 1638 (Ch), [2006] FSR 17, at [1284] per Lewison J, citing Robert Walker LJ in Re Kay......
  • Corporate Management
    • Jamaica
    • Corporate Business Principles. A Guide to the Jamaica Companies Act
    • 18 February 2021
    ...Limited v Naggar [2013] EWHC 1961 (Ch.). 5. See Unisoft Group Ltd (No 3), Re [1994] BCC 766, 775 (Harman J); Hydrodam (Corby) Ltd, Re [1994] 2 BCLC 180, 183 (Millett J). 6. See Kuwait Asia Bank v National Mutual Life Nominees Ltd [1991] 1 AC 187, [1990] 3 All ER 404 (PC); Unisoft Group Ltd ......
  • The Regulation of Shadow Directors
    • South Africa
    • Juta South Africa Mercantile Law Journal No. , May 2019
    • 25 May 2019
    ...cases include Re TasbianLtd (No 3) [1993] BCLC 297 (CA); Re Unisoft Group Ltd (No 3)[1994] 1 BCLC 609; Re Hydrodan (Corby) Ltd [1994] 2 BCLC 180 (ChD); Re PFTZM Ltd (inliquidation) [1995] 2 BCLC 354 (ChD); Re Kaytech International plc; Secretary of State for Trade andIndustry v Kaczer & Oth......
  • Request a trial to view additional results

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