Aston Risk Management Ltd v Lee Jones & Ors.

Aston Risk Management Ltd v Lee Jones & Ors.

Mr Jones was a de facto director of ASS, exercised control, and breached fiduciary duties by causing ASS to make unjustified payments to Neutrino and Cumulo and by transferring the business and assets to AMR without consideration. Neutrino, through Mr Jones, knowingly received company assets in breach of fiduciary duty and is liable to account as constructive trustee. Payments to Neutrino and Cumulo beyond agreed terms were not commercially justified and were made when ASS was insolvent or creditors' interests should have been considered.

Parties
Claimant: Aston Risk Management Ltd; First Defendant: Mr Lee Jones; Second Defendant: Mr Richard Kilburn; Third Defendant: Mr Clinton Jones; Fourth Defendant: Professor Mark Lutman; Fifth Defendant: Neutrino Network Ltd; Sixth Defendant: Cumulo Accountancy and Taxation Ltd
Jurisdiction
England and Wales
Judgment Date
20 March 2023
Procedural Posture
Civil (company/commercial) / Judgment on Liability After Trial
Outcome
Liability established against Mr Jones and Neutrino for breach of fiduciary duty and knowing receipt; quantum and remedies to be determined at a further hearing.
Legal Topics
De Facto Directors, Breach of Fiduciary Duty, Knowing Receipt, Transactions at an Undervalue, Constructive Trust, Director's Duties, Phoenix Companies
Company Law Insolvency Law Fiduciary Duties De Facto Directors Breach of Fiduciary Duty Knowing Receipt Transactions at an Undervalue Constructive Trust +2 more

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Parties

Aston Risk Management Ltd

Claimant

Mr Lee Jones

First Defendant

Mr Richard Kilburn

Second Defendant

Mr Clinton Jones

Third Defendant

Professor Mark Lutman

Fourth Defendant

Neutrino Network Ltd

Fifth Defendant

Cumulo Accountancy and Taxation Ltd

Sixth Defendant

Procedural Posture

Civil (company/commercial) / Judgment on Liability After Trial

Legal Issues

  1. 1 Whether Mr Jones was a de facto director of ASS
  2. 2 Whether Mr Jones breached fiduciary duties as a de facto director of ASS by causing payments to Neutrino and Cumulo and transferring assets to AMR
  3. 3 Whether Neutrino is liable for knowing receipt of payments made in breach of fiduciary duty

Ratio Decidendi

Mr Jones was a de facto director of ASS, exercised control, and breached fiduciary duties by causing ASS to make unjustified payments to Neutrino and Cumulo and by transferring the business and assets to AMR without consideration. Neutrino, through Mr Jones, knowingly received company assets in breach of fiduciary duty and is liable to account as constructive trustee. Payments to Neutrino and Cumulo beyond agreed terms were not commercially justified and were made when ASS was insolvent or creditors' interests should have been considered.

Court Disposition

Liability established against Mr Jones and Neutrino for breach of fiduciary duty and knowing receipt; quantum and remedies to be determined at a further hearing.

Orders

  • Mr Jones liable for breach of fiduciary duty as de facto director for unjustified payments to Neutrino and Cumulo and for transfer of business to AMR.
  • Neutrino liable to account as constructive trustee for knowing receipt of payments made in breach of fiduciary duty.