Complete Facilities Solutions Limited v Livingston Consulting Limited & Ors.
[2023] EWHC 571 (Ch)
Glenea Contracts Limited v Philip Joseph Friel
10 May 2024
[2024] EWHC 1243 (Ch)
High Court
A company's manager stole money, claiming it was for overtime or he planned to pay it back. The judge said he was a bad guy who must pay back over half a million pounds because he broke his promise to do his job properly and also shared company secrets.
Key Facts
- •Glenea Contracts Limited (Claimant) sued Philip Friel (Defendant), its former Commercial Manager, for misappropriating £566,707.11 between 2014 and 2022.
- •Friel admitted taking company money to fund his gambling addiction but claimed some payments were legitimate or intended repayments.
- •Glenea also claimed misuse of confidential information.
- •Friel had unrestricted access to Glenea's bank account and was responsible for making payments.
- •There was no written employment contract; disputes arose regarding overtime pay and profit sharing.
- •Glenea's director, James Doogan, claimed he rarely reviewed bank statements, while Friel contended Doogan had access.
- •Friel shared confidential information with a competitor, Novaseven, before leaving Glenea.
Legal Principles
Fiduciary duties arise where a relationship of trust and confidence exists, creating a legitimate expectation that the fiduciary will not act adversely to the principal's interests.
Snell’s Equity at 7-005; Cobbets LLP v Hodge [2009] EWHC 786 (Ch) at [89]; Nottingham University v Fishel [2000] ICR 1462 (QBD)
A fiduciary in control of another's property, even without formal trusteeship, can be a constructive trustee, accountable without time limit.
Keown v Nahoor [2015] EWHC 3418 (Ch); Lewin on Trusts at 8-018; Paragon Finance v D B Thakerar & Co [1999] 1 All ER 400; Williams v Central Bank of Nigeria [2014] AC 1189
Limitation Act 1980, s21(1)(b) does not apply to actions to recover trust property or proceeds from a trustee.
Limitation Act 1980, s21(1)(b)
The burden of justifying payments lies on the fiduciary.
Keown at [36]; Cobbetts v Hodge [2009] EWHC 786 (Ch) at [108]
Employees owe a duty of fidelity to their employer.
Clerk & Lindsell 25-06
Limitation Act 1980, s32(1) delays the limitation period for fraud or deliberate concealment, but requires reasonable diligence from the claimant.
Limitation Act 1980, s32(1)
To establish breach of confidence, the information must be confidential, imparted in circumstances implying confidence, and used or disclosed without authorization.
Clerk & Lindsell 25-06
Outcomes
Friel owed fiduciary duties to Glenea regarding the company's financial affairs.
Friel had significant control over Glenea's bank account and finances, creating a relationship of trust and confidence.
Friel was a constructive trustee of the misappropriated funds.
Friel's breach of fiduciary duty resulted in him becoming a constructive trustee of the money he wrongfully took from Glenea.
Friel failed to justify most of the payments received beyond his salary.
Friel didn't provide sufficient evidence to support his claims of legitimate expenses, overtime, or bonuses.
Friel's claim of overtime payments was rejected.
Lack of evidence to support the claim.
Section 32(1) of the Limitation Act 1980 did not extend the limitation period for breach of contract.
Glenea could have discovered Friel's actions with reasonable diligence by reviewing bank statements.
Friel was liable for breach of confidence.
Friel admitted or evidence showed his unauthorized disclosure of confidential information to Novaseven.
Friel was ordered to repay £552,993.86.
This represents the total amount misappropriated, accounting for salary, authorized bonuses, and proven expenses.