CR-2024-000675 - [2025] EWHC 2069 (Ch)

In addition to the statutory duties I have already mentioned, the Applicants also relied on the separate fiduciary obligation which a director owes to cause the company to keep proper records of its transactions, and to provide an account of his own dealings with company property, of which he is treated as being a trustee (Re Shahi Tandoori Restaurant Ltd [2021] EWHC 337 (Ch); [2021] All ER (D) 31 (Mar) at [32]). For this reason, it is the obligation of a director once payments have been identified for the director to demonstrate that such payments were legitimate. In this case therefore, the burden of proof rests on the Respondents to satisfy the court that transactions are legitimate (Re Idessa (UK) Ltd [2011] EWHC 804 (Ch); [2012] 1 BCLC 80 at [28]).

In Re Bronia Buchanan Associates Ltd [2021] EWHC 2740 (Ch); [2022] 1 B.C.L.C. 501 at [85] to [86], the court held that it was not open to a director to recreate history (i.e. the basis upon which they have historically received money from a company). In this context, as explained by Arden LJ in Wetton (as liquidator of Mumtaz Properties Ltd) v Ahmed [2011] EWCA Civ 610; [2012] 2 BCLC 109 at [14], the court can draw inferences from the absence of contemporaneous documents supporting their case.