Currencies Direct Ltd v Ellis, Court of Appeal - Civil Division, May 31, 2002,  EWCA Civ 779
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Case No: A2/2002/0199Neutral Citation Number:  EWCA Civ 779IN THE SUPREME COURT OF JUDICATURECOURT OF APPEAL (CIVIL DIVISION)ON APPEAL FROM THE QUEEN'S BENCH DIVISIONMR JUSTICE GAGERoyal Courts of JusticeStrand, London, WC2A 2LL Friday 31st May 2002 Before : LORD JUSTICE SIMON BROWNLORD JUSTICE MUMMERYand MR JUSTICE HART - - - - - - - - - - - - - - - - - - - - -Between : - - - - - - - - - - - - - - - - - - - - -(Transcript of the Handed Down Judgment ofSmith Bernal Reporting Limited, 190 Fleet StreetLondon EC4A 2AGTel No: 020 7421 4040, Fax No: 020 7831 8838Official Shorthand Writers to the Court)- - - - - - - - - - - - - - - - - - - - - MR SIMON RUSSEN (instructed by Abrahams Dresden) for the AppellantMR CHRISTOPHER SPRATT (instructed by Bailey Gibson for the Respondent) - - - - - - - - - - - - - - - - - - - - -JudgmentAs Approved by the Court Crown Copyright © Lord Justice Mummery : The Appeal1. This is an appeal by Currencies Direct Limited (the Company) from an order of Gage J dated 19 October 2001. He ordered that judgment be entered for the Company against Mr Peter Ellis, a former director of, and a shareholder in, the Company, in the sum of £46,679.76 (a debt of £43,117, plus interest.) The issue on this appeal is whether the judge was right to hold that further substantial sums paid by the Company to, or for the benefit of, Mr Ellis between 1997 and April 2000 represented irrecoverable remuneration, not repayable loans.2. The judge refused permission to appeal. Permission was granted by Rix LJ on 21 November 2001. This was followed by the grant to Mr Ellis on 1 May 2002 of limited permission to cross appeal, seeking to set aside the entire judgment. Rival Contentions3. Mr Russen, on behalf of the Company, contends that judgment should have been given for the substantially larger sum of £253,000 (plus interest), being the total of the sums paid to Mr Ellis by the Company from time to time between 1997 and April 2000. The Company's claim was formulated in the Claim Form issued on 10 November 2000 as "Repayment of a director's loan account." It was pleaded that, during the course of his directorship of the Company, Mr Ellis borrowed money from it and then wrongly refused to repay it after a formal demand for repayment on or before 7 October 2000.4. Mr Spratt, on behalf of Mr Ellis, contends that the sums claimed by the Company were paid to Mr Ellis by the Company as remuneration. So he was entitled to keep them.5. After a six day hearing on these and other issues, the judge handed down a detailed and careful reserved judgment. He held that Mr Ellis was liable to repay £43,117, which was the subject of an express written acceptance of liability to repay that sum on demand, as evidenced in a letter dated 10 December 1998 signed by Mr Ellis. But the balance of the sum claimed by the Company was remuneration, which Mr Ellis was not liable to repay.6. The judge rejected Mr Spratt's contention that the obligation to repay the sum of £43,117 was unenforceable as a loan by the Company to a director in contravention of sections 330, 341 and 342 of the Companies Act 1985. That part of the judgment was the subject of Mr Ellis's cross appeal, which was not pursued at the hearing. Mr Spratt, who described the cross appeal as "protective", correctly recognised the difficulties...
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