Personal liability of directors

In Bellini v Paulsen and Another [2013] 2 All SA 26 (WCC) the court was asked to interpret and give meaning to the phrase ‘conducting the business of a company recklessly and fraudulently’, contemplated in s 424 of the Companies Act 61 of 1973 (1973 Act).

The facts were as follows: Bellini was a creditor of a company under winding-up. The two directors (on behalf of the company) bought certain technology from Bellini. At all relevant times the directors were aware that the company was unable, and would never become able, to pay its debts to Bellini, been admitted by one of the directors when under cross-examination.

Bellini sought to hold the directors liable for the debts and other liabilities of the company by virtue of s 424 of the Act.
The court, on the evidence presented, held that:

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