Both cases involve comparatively small sums of money paid to directors by companies that subsequently falling into insolvency. In both cases the Insolvency Practitioner looked to recoup the money, primarily on the basis that they were "unlawful dividends" within the meaning of the Companies Acts. In both cases the directors argued that the payments were not dividends at all and therefore could not be "unlawful" dividends. In Global, the director was successful; in Robbins, he was not.
Put briefly, the facts in Global were something like this:
Money was paid to the director on a regular basis and the director signed some "dividend paperwork". At the end of each year, the accountant would tally up the books and if it became apparent that the company had insufficient distributable reserves to clear off by way of dividend what the director had already taken, the balance would be recorded as a Directors' loan and in effect the "dividends" would be "reversed * " or "cancelled * " or "pretended never to have happened * " (* delete as you see fit).
In the year of the insolvency, the books were never closed off and the question arose as to how to characterise the sums taken out in a period when there were obviously insufficient distributable reserves (insolvency will do that to a company). What seems to have coloured the court's thinking most of all was the director's knowledge that, if there are insufficient distributable reserves, a company cannot lawfully declare dividends. Accordingly, whatever else the director intended (notwithstanding that he had signed dividend paperwork etc.) he could not have intended to declare a dividend. And since you can't declare a dividend by accident, he could only have declared a dividend when he actually intended to do so. And he clearly didn’t intend to do so when there were insufficient distributable reserves because he knew he couldn’t. So, the court held that the payments were not unlawful dividends because they were not dividends.
In Robbins, the books and records of the company were a bit of a mess, albeit there were journal entries showing a treatment of payments as dividends. The court noted that a director may not rely on the fact that the books and records were shoddy (because a director has a duty to ensure that they are not shoddy) to argue that payments that he had received from the company were one thing (which would be favourable to him) rather than another thing (which would be unfavourable to him). Accordingly the payments were treated as unlawful dividends and could be recouped by the liquidator.
The facts of the cases are sufficiently different that it is not impossible to distinguish them but on the other hand there are striking similarities. There was some paperwork suggestive of dividends in both but the crucial thing seems to have been that Mr Hale had a knowledge of dividend law and that knowledge (that you can't declare a dividend when you can't lawfully declare a dividend and so he can't have intended to declare a dividend) saved him (despite having signed paperwork that indicated that he had declared a dividend).
If only Mr Robbins had chatted to Mr Hale over a pint and discussed the finer points of s830 of the Companies Act 2006 (as I like to do of an evening) and had later been prepared to explain to the court that, whatever he though he might have been doing and whatever it looked like he was doing, he clearly wasn’t declaring a dividend.
Who says a little knowledge is a dangerous thing?