Key Facts
- •David Victor Garofalo (Applicant) filed an unfair prejudice petition under the Companies Act 2006 s.994 against David Crisp and others (Respondents), alleging breaches of sanctions regulations and fiduciary duties.
- •The Respondents are a group of companies involved in the sale of perfume.
- •Mr. Crisp allegedly caused the companies to export perfume to Russia in breach of sanctions, without Mr. Garofalo's knowledge or consent.
- •An ex parte injunction was granted to remove Mr. Crisp as a director and install new directors chosen by Mr. Garofalo.
- •The court considered various allegations, including breach of sanctions, furlough fraud, and use of banned substances.
- •The court heard evidence from numerous witnesses and reviewed considerable documentation.
Legal Principles
Unfair prejudice under Companies Act 2006 s.994
Companies Act 2006 s.994
Power to grant interim relief under Senior Courts Act 1981 s.37
Senior Courts Act 1981 s.37
American Cyanamid test for interlocutory injunctions
American Cyanamid Co v Ethicon Ltd (No.1) [1975] A.C. 396 HL
Higher threshold for mandatory injunctions and orders potentially dispositive of the case
Nottingham Building Society v Eurodynamics Systems plc [1993] FSR 468; NWL Limited v Woods [1979] 1 W.L.R. 1294
Russia (Sanctions) (EU Exit) Regulations 2019
Russia (Sanctions) (EU Exit) Regulations 2019
Outcomes
The ex parte injunction removing Mr. Crisp as a director and appointing new directors was continued.
The court found a high degree of assurance that Mr. Crisp knowingly breached sanctions regulations, causing unfair prejudice to the companies. The removal of Mr. Crisp was deemed necessary to mitigate reputational damage and protect the viability of the business.
Other ancillary orders (imaging, delivery up, passport order) were left to be considered at trial.
These orders had been fully executed, and there was no immediate urgency to address them.
The court will consider fortification of Mr. Garofalo's cross-undertaking as to damages.
To ensure adequate protection for Mr. Crisp in case the injunction is ultimately overturned.