Caselaw Digest
Caselaw Digest

Omnimax International LLC v Simon Cullen & Ors

17 September 2024
[2024] EWHC 2367 (Ch)
High Court
A company director used company money to buy a house without proper records. The judge said he had no chance of winning in court and ordered him to repay the money.

Key Facts

  • OmniMax International LLC (C) sought summary judgment against Simon Cullen (D1) and Aluinox Limited (D2) for breach of fiduciary duty.
  • C is assignee of claims from Alumill and Rolmet (in liquidation), where D1 was sole director and shareholder.
  • D1 received significant payments (£1,666,968.17) from the Companies, a portion used to purchase a property with his wife (D3).
  • D1 claims payments were repayments of loans and compensation for loss of customer list.
  • D1 failed to maintain proper accounting records.
  • The court considered D1’s prospects of proving the payments were for a proper purpose.

Legal Principles

Summary judgment can be granted if a party has no real prospect of succeeding and there's no other compelling reason for a trial.

CPR 24.3

Principles governing summary judgment (realistic prospect of success, no mini-trial, consideration of evidence available at trial).

Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch)

Company directors owe fiduciary duties to use company assets for proper purposes.

Companies Act 2006, sections 171, 172, 175; Sinclair Investments (UK) Ltd v Versailles Trade Finance Ltd [2011] EWCA Civ 347

Once a director receives company money, it's their burden to show it was for a proper purpose.

Gillman & Soame Ltd v Young [2007] EWHC 1245 (Ch); GHLM Trading Ltd v Maroo [2012] EWHC 61 (Ch)

Adverse inferences can be drawn from the absence of contemporaneous documents a party is responsible for maintaining.

Re Mumtaz Properties Ltd, Wetton v Ahmed [2011] EWCA 610; GHLM Trading Ltd v Maroo [2012] EWHC 61 (Ch)

Importance of critically examining evidence presented to court and reliance on documentary evidence in commercial disputes.

Calland v Financial Conduct Authority [2015] EWCA Civ 192; Gestmin SGPS SA v Credit Suisse (UK) Limited [2013] EWHC 3560 (Comm)

Hesitation before granting summary judgment if a fuller investigation of facts might alter the outcome.

Doncaster Pharmaceuticals Group Ltd v The Bolton Pharmaceutical Co 100 Ltd [2006] EWCA Civ 661

Outcomes

Summary judgment granted against D1 for £932,248.80 (property purchase) and £348,393.61 (DLA debt).

D1 failed to demonstrate a real prospect of successfully defending the claims. His evidence was unreliable, contradictory and lacked sufficient supporting documentation; the burden of proving proper use of funds rested on him, which he failed to meet.

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