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Director Held Personally Liable for Company’s Non Compliance of Court Order

14th February, 2013

A recent case has demonstrated the potential consequences for directors of a corporate defendant that fails to comply with a Court Order.

In the case of The Lord Mayor and the Citizens of the City of Westminster v Addbins Limited and others, cigarette bins were erected by the First Defendant, displaying advertising for the Second Defendant in various locations throughout Westminster in contravention of planning legislation.

The Defendants failed to remove the signs, even after being found guilty of a criminal offence. It was at this point that the City of Westminster applied to the civil courts for an injunction compelling the Defendants to remove the bins. The injunction was granted, but the bins were still not removed.

Both corporate Defendants were held to be in contempt of Court for failing to comply with the Court order. Despite not being a named party to the injunction, the Court found Mr Griffin (who was a director of both corporate Defendants) to have enough personal involvement in the proceedings to find him personally liable.

Mr Griffin could have faced a prison sentence for the contempt, but instead was ordered to pay a fine, as were both corporate Defendants.

The case serves as a reminder of the wide ranging nature of directors’ duties. In particular, a director should take reasonable steps to ensure any penal order is obeyed. A wilful failure to do so could lead to fines, seizure of personal assets or even imprisonment.

Directors who are concerned about their personal liability in such situations are recommended to seek independent legal advice.

 

If you have any questions regarding this article, please do not hesitate to contact David Harries on 01244 405527 or email him at [email protected].

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