Aston Risk Management Ltd v Jones & Ors (Rev1) [2023] EWHC 603 (Ch) (20 March 2023)

Aston Risk Management Ltd v Jones & Ors (Rev1) [2023] EWHC 603 (Ch) (20 March 2023)

The court found that Mr Lee Jones acted as a de facto director of ASS by exercising real influence and control over its affairs, and that he breached his fiduciary duties by causing ASS to make substantial unauthorised and excessive payments to Neutrino and Cumulo, not properly supported by invoices or board authority. Some payments constituted transactions at an undervalue and/or preferences under the Insolvency Act 1986. Neutrino Network Ltd was found liable as a constructive trustee for knowing receipt of misapplied company funds.

Citation
[2023] EWHC 603 (Ch)
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
High Court Chancery Division (business List) Claim / Final Judgment After Trial
Outcome
Claim allowed in part against the First and Fifth Defendants
Legal Topics
De Facto Directorship, Breach of Fiduciary Duty, Transactions at Undervalue, Preferences Under Insolvency Act 1986, Constructive Trust Liability, Corporate Governance, Director's Duties
Company Law Insolvency Law Equity and Trusts De Facto Directorship Breach of Fiduciary Duty Transactions at Undervalue Preferences Under Insolvency Act 1986 Constructive Trust Liability +2 more

Case Brief

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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

High Court Chancery Division (business List) Claim / Final Judgment After Trial

Legal Issues

  1. 1 Whether Mr Lee Jones was a de facto director of Audiological Support Services Ltd (ASS)
  2. 2 Whether Mr Jones breached fiduciary duties as a de facto director
  3. 3 Whether payments to Neutrino Network Ltd and Cumulo Accountancy and Taxation Ltd were properly authorised or constituted overpayments

Ratio Decidendi

The court found that Mr Lee Jones acted as a de facto director of ASS by exercising real influence and control over its affairs, and that he breached his fiduciary duties by causing ASS to make substantial unauthorised and excessive payments to Neutrino and Cumulo, not properly supported by invoices or board authority. Some payments constituted transactions at an undervalue and/or preferences under the Insolvency Act 1986. Neutrino Network Ltd was found liable as a constructive trustee for knowing receipt of misapplied company funds.

Court Disposition

Claim allowed in part against the First and Fifth Defendants

Orders

  • Declaration that Mr Lee Jones acted as a de facto director of ASS and breached fiduciary duties
  • Order for Mr Lee Jones and Neutrino Network Ltd to account to ARM for overpayments received from ASS