Singh Brothers Contractors (North West) Ltd, Re [2013] EWHC 2138 (Ch) (27 June 2013)

Singh Brothers Contractors (North West) Ltd, Re [2013] EWHC 2138 (Ch) (27 June 2013)

Permission to continue the derivative claim is refused because the conduct complained of was either authorised by the company before it occurred or has been ratified by the company since, as evidenced by approval of accounts and payments by all directors and shareholders. No director acting in accordance with section 172 would seek to continue the claim. The claimant's motivation is found to be personal animosity rather than the company's interests, and alternative remedies are available.

Citation
[2013] EWHC 2138 (Ch)
Parties
Claimant: Sukhpaul Singh; First Defendant: Satpaul Singh; Second Defendant: Singh Brothers Contractors (North West) Limited
Jurisdiction
England and Wales
Judgment Date
27 June 2013
Procedural Posture
Derivative Claim / Application for Permission to Continue Derivative Claim
Outcome
Permission to continue the derivative claim refused.
Legal Topics
Derivative Claims, Directors' Duties, Breach of Fiduciary Duty, Breach of Trust, Remuneration and Dividends, Ratification of Company Acts
Company Law Derivative Claims Directors' Duties Breach of Fiduciary Duty Breach of Trust Remuneration and Dividends Ratification of Company Acts

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Parties

Sukhpaul Singh

Claimant

Satpaul Singh

First Defendant

Singh Brothers Contractors (North West) Limited

Second Defendant

Procedural Posture

Derivative Claim / Application for Permission to Continue Derivative Claim

Legal Issues

  1. 1 Whether permission should be granted to continue a derivative claim under section 261 of the Companies Act 2006 for alleged breaches of duty by a director involving excessive remuneration and dividends.
  2. 2 Whether the acts complained of were authorised or ratified by the company, barring the claim under section 263(2) of the Companies Act 2006.
  3. 3 Whether the claimant is acting in good faith and whether an alternative remedy is more appropriate.

Ratio Decidendi

Permission to continue the derivative claim is refused because the conduct complained of was either authorised by the company before it occurred or has been ratified by the company since, as evidenced by approval of accounts and payments by all directors and shareholders. No director acting in accordance with section 172 would seek to continue the claim. The claimant's motivation is found to be personal animosity rather than the company's interests, and alternative remedies are available.

Court Disposition

Permission to continue the derivative claim refused.

Orders

  • Permission to continue the derivative claim is refused.
  • No indemnity from company assets for claimant's costs.