The Court of Appeal in England recently handed down a decision that has potential implications for company directors including Australian directors. In MCA Records Inc -v- Charly Records Limited [2003] 1 BCLL 93, the Plaintiff obtained substantial damages against a series of companies for breach of copyright. However the companies were in receivership or otherwise of little worth. Not to be thwarted, it pursued a director of Charly Records personally on the basis he procured or participated in the breach by the companies. The Court of Appeal recognised that although the mere carrying out of the duties of a director would not suffice to make a director liable the situation could be different where the person procured or induced the tortious acts done by the company. In such circumstances the director could be liable as a join and/or concurrent tortfeasor.
The authority could prove useful in Australia in enabling a Plaintiff or Cross Claimant to pursue a remedy and have judgment satisfied in circumstances where the target company is a shell and no insurance exists or can be found. The decision can be found via www.austlii.edu.au.
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