Key Facts
- •PK Investments Limited (a Maltese company and creditor of Finno Medical Limited) sought summary judgment against Mr. Sabaratnam for breach of his directorial duties to Finno Medical Limited.
- •Finno Medical Limited (the Company) was compulsorily wound up with estimated deficiencies of £2,645,486.61.
- •PK Investments claimed Mr. Sabaratnam made payments to various entities (Hafiza, Zait, Idiosys, etc.) after the Company became insolvent, without proper due diligence, and without commercial benefit to the Company.
- •Mr. Sabaratnam defended the claim, arguing the payments were in the best interests of the Company, and that the Company's failure was due to Brexit.
- •Mr. Sabaratnam's defense lacked sufficient documentation to support his claims and he failed to produce requested documents despite repeated requests by the liquidator.
Legal Principles
Summary judgment may be granted if a party has no real prospect of succeeding on the claim or defense.
CPR 24.3
A director must act in good faith to promote the success of the company (Section 172 Companies Act 2006) and exercise reasonable care, skill, and diligence (Section 174 Companies Act 2006).
Companies Act 2006, Sections 172 and 174
Failure to produce documentary evidence can lead to adverse inferences being drawn by the court.
Wetton v Ahmed; Re Mumtaz Properties Ltd [2011] EWCA Civ 610
Outcomes
Summary judgment granted in favor of PK Investments.
Mr. Sabaratnam failed to demonstrate a real prospect of successfully defending the claim. His defense lacked sufficient evidence and documentation to support his assertions that the payments were made in the best interests of the company. The court drew adverse inferences from his failure to provide supporting evidence.