Or at least the so-called “illegality defence” will not protect rogue directors, explains Richard Highley
The Supreme Court delivered its long-awaited judgment in Jetivia SA and another (Appellants) v Bilta (UK) Limited and others (Respondents) [2015] UKSC 23 in April. It made clear that a fraudulent director of a company, and third parties complicit in a fraudulent scheme, cannot rely on the 2009 decision in Stone & Rolls Ltd (In Liquidation) v Moore Stephens (A Firm) (Stone & Rolls) [2009] UKHL 39, [2009] 4 All ER 431, and invoke an “illegality defence” to the claim.
Background
Following a period of trading in carbon credits in early 2009, Bilta (UK) Ltd (Bilta) owed HMRC £38m in unpaid VAT. Unable to pay, Bilta was compulsorily wound up in late 2009 on an HMRC petition.
Bilta and its liquidators brought a claim against its two former directors, one of whom was also its sole shareholder, as well as against a Swiss company, Jetivia SA, and Jetivia’s chief executive (the appellants). It was alleged that the appellants and the directors were involved in an “unlawful means conspiracy”
