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Ultraframe (UK) Ltd v Fielding & Ors

[2005] EWHC 1638 (Ch)

Case summary last updated at 22/01/2020 18:44 by the Oxbridge Notes in-house law team.

Judgement for the case Ultraframe (UK) Ltd v Fielding & Ors

Lewison J
When is director liable?
·       2 principles clear:
1)     For application of no-conflict rule, no need for company to have‘proprietary interest’ in opportunity diverted
2)     However after director leaves office, may be liable under:
i)          No profit rule
ii)        If business opportunity is treated as ‘property’ of the company
 
Competing Directorships
·       Even if competing directorships give rise to potential conflict of interest, can be remedied by consent of boards of both companies
 
Where profit from breach goes to company
·       CMS Dolphin is WRONG.
·       No such thing as joint liability for breach of trust.
 
1)     Where director himself receives profit from breach of duty and puts it into a company, director is liable for knowing receipt.
Ø  Plus company potentially liable for knowing receipt.
2)     Where profits from a director’s breach of duty are paid directly to a company:
i)       If company is alter ego of director
–       Court will pierce corporate veil
–       Thus third party company liable to director’s original company
ii)     If director owns large number of shares in company but it is not a mere alter ego
–       Directoris not personally liable to account for profits made
–       Companymay be liable for knowing receipt

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