Misfeasance liability for unauthorised winding-up payment survives honesty, indemnity clauses, and a shorter limitation defence.

Directors who knowingly participate in or facilitate an unauthorised payment of company funds after commencement of winding up are liable for misfeasance and breach of trust, even if they did not personally sign the cheque. The Court treated the payment as void and held the director liable only to the extent of the payment for which his responsibility was established. The claim was not barred by limitation because the liability arose from the director's duty and the company's constitution, so the residuary limitation period applied. Relief from liability was refused because the transaction was deliberate, unauthorised, and beyond the company's powers, and an indemnity clause did not protect against ultra vires use of company funds.

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Issues: (i) Whether the director was liable under the misfeasance jurisdiction for authorising or participating in a payment made after commencement of winding up and void under the Companies Act; (ii) whether the claim was barred by limitation; (iii) whether the director was entitled to relief from liability under the Companies Act.

Issue (i): Whether the director was liable under the misfeasance jurisdiction for authorising or participating in a payment made after commencement of winding up and void under the Companies Act.

Analysis: A payment made after commencement of winding up was treated as unauthorised and void. A director who knowingly concurred in such a payment, even without dishonesty, was held to have misapplied company funds and to have committed a breach of trust. The fact that the director did not personally sign the cheque did not avoid responsibility where he acted in concert with the other directors and facilitated the payment.

Conclusion: The director was liable in principle for misfeasance and breach of trust, but only to the extent of the payment for which his responsibility was established.

Issue (ii): Whether the claim was barred by limitation.

Analysis: The liability was treated as one arising from the director's duty and the company's constitution, not as an action outside the ordinary contractual framework. On that basis, the Court held that the longer residuary period applied rather than the shorter contract-based periods relied upon in defence.

Conclusion: The application was not barred by limitation.

Issue (iii): Whether the director was entitled to relief from liability under the Companies Act.

Analysis: Relief was refused because the payment was deliberate, unauthorised, and beyond the company's powers. Honest conduct alone was insufficient where the director must be taken to have known that the transaction was improper. The indemnity clause in the articles did not protect a director against liability for ultra vires application of company funds.

Conclusion: Relief from liability was refused.

Final Conclusion: The director was held liable for a limited part of the unauthorised payment, the claim was within time, and no statutory relief was granted; costs were also awarded to the liquidator.

Ratio Decidendi: Directors who knowingly participate in or facilitate an unauthorised payment of company funds during winding up are liable to compensate the company for misfeasance and breach of trust, and such liability is not avoided by honesty, an indemnity clause, or a shorter limitation period where the governing claim falls under the residuary limitation provision.

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