ETL Holdings (UK) Limited v Kenneth McGregor Munn & Anor

ETL Holdings (UK) Limited v Kenneth McGregor Munn & Anor

Damages for breach of warranty in the SPA are to be assessed at the date of breach (2015), and subsequent events such as the compromise of the Dormco debt and forfeiture/sale of shares do not reduce the claimant’s loss. The claimant is entitled to the difference between the value of the shares as warranted and their true value, calculated as 40% of the Dormco debt, plus damages for the dilapidations claim and legal costs. The value of the director’s loan account cannot be set off against liability.

Parties
Claimant: ETL Holdings (UK) Limited; First Defendant: Kenneth McGregor Munn; Second Defendant: Ruth Munn
Jurisdiction
England and Wales
Judgment Date
17 April 2026
Procedural Posture
Civil Commercial (share Purchase Agreement) / Assessment of Damages After Summary Judgment on Liability; Judgment After Rehearing
Outcome
Judgment for the claimant against the second defendant for damages for breach of warranty, with interest as per statutory provisions.
Legal Topics
Breach of Warranty, Assessment of Damages, Share Purchase Agreement, Non Disclosure, Compensatory Principle
Contract Law Company Law Breach of Warranty Assessment of Damages Share Purchase Agreement Non Disclosure Compensatory Principle

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Parties

ETL Holdings (UK) Limited

Claimant

Kenneth McGregor Munn

First Defendant

Ruth Munn

Second Defendant

Procedural Posture

Civil Commercial (share Purchase Agreement) / Assessment of Damages After Summary Judgment on Liability; Judgment After Rehearing

Legal Issues

  1. 1 Whether subsequent events (compromise of Dormco debt, forfeiture and sale of shares) affect the assessment of damages for breach of warranty in a share purchase agreement
  2. 2 Whether the claimant is entitled to the full measure of damages for non-disclosure of the Dormco debt and dilapidations claim
  3. 3 Whether the value of the director’s loan account created by the unlawful dividend should be set off against liability

Ratio Decidendi

Damages for breach of warranty in the SPA are to be assessed at the date of breach (2015), and subsequent events such as the compromise of the Dormco debt and forfeiture/sale of shares do not reduce the claimant’s loss. The claimant is entitled to the difference between the value of the shares as warranted and their true value, calculated as 40% of the Dormco debt, plus damages for the dilapidations claim and legal costs. The value of the director’s loan account cannot be set off against liability.

Court Disposition

Judgment for the claimant against the second defendant for damages for breach of warranty, with interest as per statutory provisions.

Orders

  • Second defendant to pay the claimant £1,242,463.23 in respect of the Dormco debt warranty.
  • Second defendant to pay the claimant £25,100 in respect of legal costs for dealing with the Dormco debt.