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Re D’Jan of London

[1994] 1 B.C.L.C 561

Case summary last updated at 22/01/2020 17:06 by the Oxbridge Notes in-house law team.

Judgement for the case Re D’Jan of London

D was 99% shareholder of company, and a director. Signed a fire insurance form with some insurers, as a result of which the insurers repudiated liability for a fire at company’s premises; fire caused £174,000 of damage. Liquidator brought action against D under Insolvency Act1986 (under equivalent provisions to those in s.175). Held:
·       If document is huge and in legal prose, is not breach of duty for D to sign it on advice of solicitor
·       However here, document wassmall and simple
Ø  Plus D was best person to sign it
·       Thus by failing to read it prior to signing it, D was not reasonably diligent
Relief by court
·       Nevertheless, is appropriate for court to relieve liability (under predecessor to s.1157)
i)         D is majority shareholder
-        Thus more reasonable for him to run the risk
-        Only person’s interests he endangered were him and his wife
ii)        D’s misconduct was not gross

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