Limits to the ex turpi causa defence—Jetivia v Bilta (UK)

Limits to the ex turpi causa defence—Jetivia v Bilta (UK)

The Supreme Court’s examination of an illegality defence and the extra-territorial application of section 213 of the Insolvency Act 1986 (IA 1986) is considered by Christopher Parker QC, of Maitland Chambers, who appeared for the respondents in Jetivia SA v Bilta.

Original news

Jetivia SA and another v Bilta (UK) Ltd and others [2015] UKSC 23, [2015] All ER (D) 149 (Apr)

The liquidators of a UK company had issued proceedings against its directors as well as against a Swiss company and its chief executive. The liquidators alleged that the defendants had perpetrated a fraudulent conspiracy to cause the UK company to enter into a VAT fraud and that in doing so the directors had breached their fiduciary duty while the other two defendants had dishonestly assisted them. Those latter two defendants applied to strike out the claim against them because the UK company, having been involved in fraud, was barred by the principle of ex turpi causa non oritur actio and because they could not be required to pay a contribution to it under IA 1986, s 213 since they were based outside the UK. The High Court refused the applications and the Court of Appeal dismissed their appeal. The Supreme Court, also dismissing their appeal, held that illegality could not be raised as a defence in the circumstances and IA 1986, s 213 had extra-territorial effect.

What were the issues that arose in the case?

The two issues were:

  • whether Bilta, the UK company, could bring claims for unlawful means conspiracy and dishonest assistance against the Swiss company Jetivia SA and its director, Mr Brunschweiler, based on their assisting in breaches of fiduciary duty by the two directors of Bilta in circumstances where (i) Bilta’s loss consisted of non-payment of VAT and (ii) the entire shareholding of Bilta was owned by one of those directors, or whether Bilta was debarred from doing so by the principle of ex turpi causa
  • whether IA 1986, s 213 had extra-territorial effect

What were the main legal arguments put forward?

Jetivia and Mr Brunschweiler argued that their position was the same as that

Subscription Form

Related Articles:
Latest Articles:

Already a subscriber? Login
RELX (UK) Limited, trading as LexisNexis, and our LexisNexis Legal & Professional group companies will contact you to confirm your email address. You can manage your communication preferences via our Preference Centre. You can learn more about how we handle your personal data and your rights by reviewing our  Privacy Policy.

Access this article and thousands of others like it free by subscribing to our blog.

Read full article

Already a subscriber? Login

About the author:

Stephen qualified as a solicitor in 2005 and joined the Restructuring and Insolvency team at Lexis®PSL in September 2014 from Shoosmiths LLP, where he was a senior associate in the restructuring and insolvency team.

Primarily focused on contentious and advisory corporate and personal insolvency work, Stephen’s experience includes acting for office-holders on a wide range of issues, including appointments, investigations and the recovery and realisation of assets (including antecedent transaction claims), and for creditors in respect of the impact on them of the insolvency of debtors and counterparties.