Jetivia SA v Bilta (UK) Limited (in liquidation)

 (sometimes referred to as Bilta (UK) Limited v Nazir) is a UK company and insolvency law decision of the Supreme Court of the United Kingdom in relation to (i) the attribution of unlawful acts of a director to the company where the company is the victim of the unlawful act, and (ii) the extent to which liability for fraudulent trading under section 213 of the Insolvency Act 1986 has extraterritorial effect.
The Supreme Court held that:
Facts.
Paragraphs 113 - 116 of the joint opinion of Lord Toulson and Lord Hodge summarised the alleged facts as follows:
Because the appeal concerned an application by the defendants to strike out certain claims as disclosing no sustainable cause of action in law the relevant facts had not been determined at this stage of the proceedings. Accordingly, for the purposes of the hearing and the subsequent appeals all of the facts alleged against the defendants were assumed to be true for the purposes of determining whether the claims were legally sustainable.
The defendants applied to strike out various claims against them on two different grounds.
Judgment.
The decision was handed down in April 2015 after the original hearing had concluded in October of the previous year; an unusual length of time for the Supreme Court.
All seven judges agreed unanimously that the court's power to impose liability for fraudulent trading was extraterritorial. Relatively little judicial time was dedicated to the discussion of that subject in the judgments.
In relation to the question of attribution, all seven judges similarly agreed that "Where a company has been the victim of wrong-doing by its directors, or of which its directors had notice, then the wrong-doing, or knowledge, of the directors cannot be attributed to the company as a defence to a claim brought against the directors by the company's liquidator, in the name of the company and/or on behalf of its creditors, for the loss suffered by the company as a result of the wrong-doing, even where the directors were the only directors and shareholders of the company, and even though the wrong-doing or knowledge of the directors may be attributed to the company in many other types of proceedings."
However Lord Sumption, Lord Toulson and Lord Hodge dissented from the majority in relation to the scope of the "illegality defence".
Although it was not a point in issue in the case, Lord Neuberger further expounded that "section 172(3) [of the Companies Act 2006] cannot be defeated by the directors invoking the defence of ex turpi causa."
Significance.
English law had recently seen a number of judicial decisions relating to difficult issues of attribution of fraudulent conduct by a director to the company. This included the controversial decision of the House of Lords in , and the so-called "sole actor" exception. The "Moore Stephens" decision in turn had followed a number of other recent decisions in relation to the issue of illegality, including "Tinsley v Milligan" [1994] 1 AC 340; and . Commentators had hoped that the decision of the Supreme Court in "Jetivia v Bilta" would resolve these issues. Unfortunately their Lordships declined to make an authoritative statement on illegality in English law.
Although most commentators agree with the emphasis of the decision, and applaud the move away from "Stone & Rolls Ltd v Moore Stephens" the case represents yet another missed opportunity to issue an authoritative statement on the thorny issue of illegality.
The test in "Jetivia" has been subsequently applied by the courts in relation to attribution on various occasions, including by the Court of Appeal in .