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.