De-Facto Directors: Case 1: Re Snelling House: Directors' Misfeasance

The law allows any person to be treated as a director even though that person has not been formally appointed as a director. Such directors are known as de-facto directors. By contrast, a de jure director is a person who has been validly appointed as a director.

The recent case of Re Snelling House Ltd (In Liquidation) [2012] EWHC 440 (Ch) serves as a useful reminder to consider possible claims against de-facto directors who may be acting under the wrong impression that they are beyond reprehension.

The facts

The applicant liquidators (L) applied for relief against, inter alia, an individual who was said to be a consultant (R2) of the company (C). R2 was married to the sole de jure director (R1) of C. R2 was subject to a disqualification undertaking in relation to another company which meant that he was prohibited from acting as a director of any company. He had also served a period of imprisonment following a conviction for dishonesty. Both R1 and R2 had a history of 'bad...