Jak Trude v Christopher Rajendran Hyman & Anor
[2023] EWHC 1703 (Ch)
Complete Facilities Solutions Limited v Livingston Consulting Limited & Ors.
14 March 2023
[2023] EWHC 571 (Ch)
High Court
A company sued some directors and an employee for not getting paid. The judge said the company didn't prove anyone did anything wrong and threw out the case because they didn't have enough evidence.
Key Facts
- •Complete Facilities Solutions Ltd (CFS) claimed £672,281.68 from Livingstone Consulting Ltd (LC) and others for unpaid maintenance work performed for Martin McColl Ltd (MCL).
- •LC acted as managing agent for MCL, with a 'pay when paid' arrangement with CFS.
- •MCL experienced cash flow difficulties and went into administration, owing LC £2.28m. LC subsequently went into liquidation.
- •CFS sued LC and its directors (D2-3-5) and a senior employee (D3) for various alleged breaches including deceit, procuring breach of contract, conspiracy to injure, and breach of tortious and fiduciary duties.
- •CFS's claim against D2-3-5 was not contractual, but based on their alleged personal responsibility for LC's actions.
Legal Principles
CPR 3.4(2) allows striking out a statement of case with no reasonable grounds or that is an abuse of process.
JSC Bank of Moscow v Kekhman [2015] EWHC 3037 (Comm)
Fraud or dishonesty must be specifically and sufficiently particularised; primary facts must justify an inference of dishonesty.
Sofer v Swissindependent Trustees SA [2020] EWCA Civ 699; Three Rivers District Council v Governor and Company of the Bank of England (No.3) [2003] 2 AC 1
A director can be liable for procuring a company's breach of contract only if acting outside their duties.
Said v Butt [1920] 3 K.B. 497
A director is not liable as a joint tortfeasor if they only perform their constitutional role.
MCA Records Inc v Charly Records Ltd [2001] EWCA Civ 1441
A director's liability for conspiracy with their company only arises if they acted outside their constitutional role.
Digicel (St Lucia) Ltd v Cable & Wireless plc [2010] EWHC 774 (Ch)
A Quistclose trust requires an objective intention to create a trust, with the property only used for a specific purpose and usually segregated.
Snell’s Equity (34th edn); Bieber v Teathers (In Liquidation) [2012] EWCA Civ 1466
Outcomes
Claims against D2-3-5 for procuring breach of contract, deceit, conspiracy to injure, and joint tortfeasorship were struck out.
CFS failed to plead sufficient primary facts to support inferences of dishonesty or wrongdoing. The claims were also not fully pleaded as complete causes of action, lacking the necessary elements.
Claims against D2-3-5 for breach of tortious duty and breach of fiduciary duty (Quistclose trust) were dismissed.
No evidence suggested D2-3-5 acted outside their roles, assumed personal responsibility, or created a Quistclose trust. Claims lacked any realistic prospect of success.