Peace and Glory Society Ltd (in liq) v Samsa

The liquidators of Peace and Glory Society Ltd appealed the High Court’s rejection of their claim that Mr Samsa had breached his duties as a director by allowing the company to incur an obligation it could not meet, and failed to keep proper accounting records for the company. They sought orders requiring Mr Samsa to contribute to the debts of the company. Mr Samsa accepted that he had breached his duties as a director but submitted that the High Court’s assessment of the appropriate contribution was correct and that he should not be required to make a contribution. The appeal was dismissed. The Court found that the High Court judge had not erred in his assessment of the appropriate contribution to be made by Mr Samsa. The High Court had taken into account all the relevant factors in making its assessment, including Mr Samsa’s awareness of the company’s insolvency and the limited options available to him. The Court held that, while Mr Samsa had breached his duties as a director, he had acted honestly and with a genuine belief that he was taking the best course of action available to him in the circumstances. The Court also noted that the IRD had not taken steps to intervene in the sale of the property and had effectively given its blessing to the sale. The Court found that the High Court judge’s assessment of the appropriate contribution to be made by Mr Samsa was correct and that he should not be required to make a contribution.