The appellant appealed that decision on various grounds, but the decision boiled down to one central issue, was the decision to prefer when the SPA was entered into in November 2011, which was the judge’s conclusion, or at a board meeting in February 2012 when a new board was in place and all parties accepted that there was no intention to prefer?
The Court of Appeal, who disagreed with the judge, upheld the appeal and found that the decision was on the later date when there was no intention to prefer.
A conditional contract for the sale was entered into in November 2011 that provided, among other things, that the existing board would be replaced in advance of an anticipated completion date in February 2012 and that the new board would ultimately decide whether to proceed with completion and the repayments, which they did.
The old board decided to enter into that contract, which set out the repayments that the liquidators contended were preferences and the judge found that this was the date of the decision, with the meeting in February 2012 being a formality.
However, the Court of Appeal found that the enforceable obligation to repay was created by the board decision in February 2012 and that a transaction that required a further board approval did not involve an “operative” decision until that approval was obtained.
It therefore disagreed with the judge’s interpretation and upheld the appeal.
Darty Holdings SAS v Geoffrey Carton-Kelly and others [2023] EWCA Civ 1135