ABSTRACT
The uncertainty which has existed with aspects of s 213, and particularly, the meaning of ‘intent to defraud’ has led to suggestions that a liquidator might be far more inclined, where possible, to initiate proceedings pursuant to s 214, because it has a lower threshold of proof, and the elements of the section appear, prima facie, easier to establish. But, while at one time it was generally thought that s 213 would not be used frequently, especially in light of the emergence of wrongful trading in s 214, that is not the case, and there have been several fraudulent trading actions in recent times, as was mentioned in Chapters 4 and 5. Also, it might be said that there have been, relatively speaking, few wrongful trading cases, and that given the way that the wrongful trading proceedings have been dealt with, success under s 214 is far from assured, and might not even present a better opportunity of succeeding when compared with actions under s 213. But of course much will depend on the facts. A claim under s 213 must involve proof of fraud, and not every instance of directorial misconduct will involve fraud.
