Liquidator seeks redress for VAT under-declaration and unlawful payments

Background

The High Court case of Brittain vs Choppen centred around Louise Mary Brittain, the liquidator of D.W.B. Waste Management Limited, seeking to recover significant sums from Mr David John Choppen, the sole director of the company. The case was heard in the Business and Property Courts of England and Wales, Insolvency and Companies List, with ICC Judge Barber presiding.

The Application

Ms Brittain, in her capacity as liquidator, sought declarations and orders against Mr Choppen for breaches of duty under the Companies Act 2006 and the Insolvency Act 1986. These included under-declaration of VAT totalling £251,437, unlawful payments to Mr Choppen amounting to £69,000, and cash withdrawals of £286,180, allegedly misapplied by Mr Choppen.

Company Background

D.W.B. Waste Management Limited, incorporated in 2014, traded in recycled waste for energy purposes. The company entered creditor's voluntary liquidation in June 2017 and was dissolved in January 2019. The company was restored and wound up by the court in 2020, with Ms Brittain appointed as liquidator.

Respondent's Defence

Mr Choppen, diagnosed with mild cognitive impairment, claimed his role as director was nominal. He alleged that the company was effectively run by Steve Rozario, a business associate of the previous director, Kelly Bond, who was imprisoned. Mr Choppen argued that he acted under duress from Rozario and Bond, both of whom had criminal backgrounds.

Procedural History

The application was issued in September 2022, with various directions hearings following. The trial was initially set for May 2024 but was vacated due to scheduling conflicts and rescheduled for February 2025. Mr Choppen faced difficulties securing legal representation, leading to an application for adjournment.

Adjournment Request

Ms Gardiner, representing Mr Choppen, argued for an adjournment, citing the need for adequate preparation time and Mr Choppen's cognitive impairments. The court was asked to consider the fairness of proceeding without sufficient preparation, given the complexity of the case and the sums involved.

Court's Decision

Judge Barber granted the adjournment, recognising the need for Mr Choppen's counsel to adequately prepare and the potential impact of Mr Rozario's role in the proceedings. The court emphasised the importance of ensuring a fair trial and the need for reasonable adjustments for Mr Choppen's vulnerabilities.

Implications

The case highlights the challenges faced by individuals with cognitive impairments in legal proceedings and the court's role in ensuring fairness. It also underscores the complexities involved in insolvency cases where alleged breaches of director duties are contested.

Learn More

For more information on insolvency proceedings and director duties, see BeCivil's guide to Shareholder Law.