ABSTRACT
In the previous chapter we examined the scope of the provision and focused on when a director might be held liable. We now turn to consider when a director might be able to defend successfully any action brought against him or her. The director need only establish the defence in s 214 once the liquidator’s case has been made out (for example, Re Produce Marketing Consortium Ltd (1989) 5 BCC 569 at 596). But it should be noted that the liquidator is not required to prove that a director participated in irresponsible conduct, for all that he or she has to do is to establish that the director knew or ought to have concluded that there was no reasonable prospect of the company not going into insolvent liquidation. Once that has been established, then the burden is thrown on the respondent to extricate himself or herself by making out the defence provided.
