Bhullar v Bhullar & Ors [2015] EWHC 1943 (Ch) (07 July 2015)

Bhullar v Bhullar & Ors [2015] EWHC 1943 (Ch) (07 July 2015)

Permission is granted to continue the derivative claim in relation to the payments made to Torex, as there is a prima facie case of dishonest breach of fiduciary duty not barred by limitation, and the case falls within the fraud on the minority exception. Permission is refused regarding the Southgate B transfer due to insufficient evidence of undervalue or dishonesty. A pre-emptive indemnity as to costs is refused, as the court is not satisfied it would be the proper order post-trial and to avoid unfair advantage to the claimant.

Citation
[2015] EWHC 1943 (Ch)
Parties
Claimant: Inderjit Singh Bhullar; First Defendant: Jatinderjit Singh Bhullar; Second Defendant: Bhullar Developments Limited; Third Defendant: Bhullar Bros. Limited
Jurisdiction
England and Wales
Judgment Date
07 July 2015
Procedural Posture
Derivative Claim (double Derivative) / Application for Permission to Continue Derivative Claim and for Pre Emptive Indemnity as to Costs
Outcome
Permission granted in part; pre-emptive indemnity refused; claim stayed for mediation.
Legal Topics
Derivative Actions, Directors' Duties, Fiduciary Duty, Limitation of Actions, Costs (indemnity), Fraud on the Minority
Company Law Civil Procedure Derivative Actions Directors' Duties Fiduciary Duty Limitation of Actions Costs (indemnity) Fraud on the Minority

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Parties

Inderjit Singh Bhullar

Claimant

Jatinderjit Singh Bhullar

First Defendant

Bhullar Developments Limited

Second Defendant

Bhullar Bros. Limited

Third Defendant

Procedural Posture

Derivative Claim (double Derivative) / Application for Permission to Continue Derivative Claim and for Pre Emptive Indemnity as to Costs

Legal Issues

  1. 1 Does the court have jurisdiction to permit a double derivative claim post-Companies Act 2006?
  2. 2 Has the claimant established a prima facie case for the company to claim against the director?
  3. 3 Is the claim statute-barred by limitation?

Ratio Decidendi

Permission is granted to continue the derivative claim in relation to the payments made to Torex, as there is a prima facie case of dishonest breach of fiduciary duty not barred by limitation, and the case falls within the fraud on the minority exception. Permission is refused regarding the Southgate B transfer due to insufficient evidence of undervalue or dishonesty. A pre-emptive indemnity as to costs is refused, as the court is not satisfied it would be the proper order post-trial and to avoid unfair advantage to the claimant.

Court Disposition

Permission granted in part; pre-emptive indemnity refused; claim stayed for mediation.

Orders

  • Permission granted to Inderjit Singh Bhullar to continue the derivative claim in relation to payments made to Torex.
  • Permission refused in relation to the transfer of Southgate B.