Here, a liquidator chased directors for debts incurred by a company.
The liquidator said the debts were incurred while the company was insolvent. The Court accepted that: .
The directors were a father and son. Dad retired as a director more or less simultaneously with son’s appointment. The debts were incurred while Dad was a director, and before the son’s appointment.
The quantum of the debts increased over time as interest accrued on both. This gave rise to the question: should Dad be liable for interest accrued after his retirement?: . While there was a suggestion that Dad should be liable for post-retirement interest because the ‘die was cast’ when he incurred the debts () the Court took the alternative approach.
First, it found the continuing day-to-day failure to pay the debt rather than the debt itself gave rise to the accruing interest: . Second, holding the son solely liable was consistent with an incoming director’s duty to immediately familiarise themselves with the company’s position and act to stop insolvent trading:  and .