Lack of company records is no defence

Liquidators of a scrap metal company brought claims against a director (Mr Crabb) relating to the under-declaration of VAT, the extraction of large cash sums for no apparent benefit of the company, and the destruction of books and records.

It was alleged Mr Crabb had deliberately kept swathes of the business secret from HMRC and had withdrawn over £2.5m in cash. Mr Crabb claimed that the cash withdrawals were entirely for the purchase of stock.

Mr Crabb admitted that he had habitually destroyed the company’s books and records. The court concluded that he had done so deliberately, to mask the company’s real trading position. 

As a result, there was no way of verifying what the true position of the company was in regard to its income, expenditure, VAT liabilities and day-to-day trading activities, and no contemporary evidence to demonstrate how the cash withdrawals had been used.

Mr Crabb was found liable for both misfeasance and fraudulent trading, having failed to demonstrate the use of cash in his hands for benefit to the company, and having fraudulently hidden the company’s true trading position to HMRC in order to under-pay VAT. He was found liable for sums exceeding £2.5m.

In regards to Dominik Thiel-Czerwinke and Jamie Taylor (Joint Liquidators of Courtside Recycling Limited) v Nicholas James Crabb [2024] EWHC 337 (Ch).

Our content explained

Every piece of content we create is correct on the date it’s published but please don’t rely on it as legal advice. If you’d like to speak to us about your own legal requirements, please contact one of our expert lawyers.

Mills & Reeve Sites navigation
A tabbed collection of Mills & Reeve sites.
My Mills & Reeve navigation
Subscribe to, or manage your My Mills & Reeve account.
My M&R


Register for My M&R to stay up-to-date with legal news and events, create brochures and bookmark pages.

Existing clients

Log in to your client extranet for free matter information, know-how and documents.


Mills & Reeve system for employees.