Recovery Partners GP Ltd & Anor v Rukhadze & Ors [2023] EWCA Civ 305 (21 March 2023)

Recovery Partners GP Ltd & Anor v Rukhadze & Ors [2023] EWCA Civ 305 (21 March 2023)

There was no binding pre-existing profit-sharing agreement limiting the defendants' liability to account for profits; any such agreement would not have limited the principal's interest. The strict rule requires full account of profits, subject only to equitable allowance for skill and effort. Delay by the claimants was not unconscionable and did not justify limiting the account temporally. The award of a 25% equitable allowance was within the judge's discretion.

Citation
[2023] EWCA Civ 305
Parties
Claimant/respondent: Recovery Partners GP Limited; Claimant/respondent: Revoker LLP; Defendant/appellant: Mr Irakli Rukhadze; Defendant/appellant: Mr Igor Alexeev; Defendant/appellant: Mr Benjamin Marson; Defendant/appellant: Hunnewell Partners (UK) LLP; Defendant/appellant: Hunnewell Partners (BVI) Limited; Defendant/appellant: Park Street (GP) Limited; Defendant/appellant: Park Street (BR) Limited; Defendant/appellant: Park Street (GS) Limited; Defendant/appellant: Park Street (L) Limited
Jurisdiction
England and Wales
Judgment Date
21 March 2023
Procedural Posture
Civil Appeal / Court of Appeal Judgment on Appeal From High Court (commercial Court)
Outcome
Appeal dismissed; cross-appeal dismissed.
Legal Topics
Account of Profits, Breach of Fiduciary Duty, Equitable Allowance, Remedies, Delay and Laches, Profit Sharing Agreements
Equity Commercial Law Fiduciary Law Account of Profits Breach of Fiduciary Duty Equitable Allowance Remedies Delay and Laches +1 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 4 Authorities cited 16 Party arguments 2 Amounts and remedies 4
Sign in to unlock

Parties

Recovery Partners GP Limited

Claimant/respondent

Revoker LLP

Claimant/respondent

Mr Irakli Rukhadze

Defendant/appellant

Mr Igor Alexeev

Defendant/appellant

Mr Benjamin Marson

Defendant/appellant

Hunnewell Partners (UK) LLP

Defendant/appellant

Hunnewell Partners (BVI) Limited

Defendant/appellant

Park Street (GP) Limited

Defendant/appellant

Park Street (BR) Limited

Defendant/appellant

Park Street (GS) Limited

Defendant/appellant

Park Street (L) Limited

Defendant/appellant

Procedural Posture

Civil Appeal / Court of Appeal Judgment on Appeal From High Court (commercial Court)

Legal Issues

  1. 1 Whether a pre-existing profit-sharing agreement limited the defendants' liability to account for profits
  2. 2 Whether unconscionable delay by claimants should limit the temporal scope of the account of profits
  3. 3 Whether the judge erred in awarding an equitable allowance to the defendants

Ratio Decidendi

There was no binding pre-existing profit-sharing agreement limiting the defendants' liability to account for profits; any such agreement would not have limited the principal's interest. The strict rule requires full account of profits, subject only to equitable allowance for skill and effort. Delay by the claimants was not unconscionable and did not justify limiting the account temporally. The award of a 25% equitable allowance was within the judge's discretion.

Court Disposition

Appeal dismissed; cross-appeal dismissed.

Orders

  • Defendants' appeal on profit-sharing agreement and delay dismissed.
  • Claimants' cross-appeal on equitable allowance dismissed.