Mobigo Ltd, Re [2022] EWHC 1349 (Ch) (01 June 2022)

Mobigo Ltd, Re [2022] EWHC 1349 (Ch) (01 June 2022)

The court held that the regulatory penalty imposed by the PSA is not, on the evidence and regulatory context, a liability wholly personal to the company and does not preclude a claim against directors for breach of duty. The Safeway principle is limited to its statutory context and does not bar recovery from directors in this case. The Duomatic principle does not apply where the company is insolvent or creditors' interests are engaged. The Substantive Application raises triable issues and should not be struck out or summarily dismissed.

Citation
[2022] EWHC 1349 (Ch)
Parties
Claimant/respondent: Stratford Hamilton; Defendant/applicant: James Kevin McAteer; Defendant/applicant: Teresa Delgaudio
Jurisdiction
England and Wales
Judgment Date
01 June 2022
Procedural Posture
Strike Out Application in Insolvency Proceedings / Judgment on Strike Out Application
Outcome
Strike Out Application dismissed; Substantive Application to proceed to trial.
Legal Topics
Director's Duties, Breach of Fiduciary Duty, Ratification (duomatic Principle), Regulatory Penalties, Abuse of Process, Summary Judgment, Illegality Defence
Insolvency Company Law Regulatory Law Director's Duties Breach of Fiduciary Duty Ratification (duomatic Principle) Regulatory Penalties Abuse of Process +2 more

Case Brief

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Parties

Stratford Hamilton

Claimant/respondent

James Kevin McAteer

Defendant/applicant

Teresa Delgaudio

Defendant/applicant

Procedural Posture

Strike Out Application in Insolvency Proceedings / Judgment on Strike Out Application

Legal Issues

  1. 1 Whether the Substantive Application should be struck out as an abuse of process or for disclosing no reasonable grounds
  2. 2 Whether directors can be held personally liable for regulatory fines imposed on the company
  3. 3 Whether breaches of duty were ratified under the Duomatic principle

Ratio Decidendi

The court held that the regulatory penalty imposed by the PSA is not, on the evidence and regulatory context, a liability wholly personal to the company and does not preclude a claim against directors for breach of duty. The Safeway principle is limited to its statutory context and does not bar recovery from directors in this case. The Duomatic principle does not apply where the company is insolvent or creditors' interests are engaged. The Substantive Application raises triable issues and should not be struck out or summarily dismissed.

Court Disposition

Strike Out Application dismissed; Substantive Application to proceed to trial.

Orders

  • The Substantive Application is not struck out.
  • No summary judgment granted.