Burnell v Trans-Tag Ltd & Anor

Burnell v Trans-Tag Ltd & Anor

Mr Burnell was not a de jure or de facto director of TTL before 28 February 2017, but became a de facto director from 28 February to 29 March 2017, owing fiduciary duties. He did not breach those duties during his directorship, but after ceasing to be a director, he breached his continuing duty under s.175 CA 2006 by acquiring TTS and using confidential information to terminate TTL's licence, depriving TTL of its rights. TTL's only recoverable loss was the value of its rights under the Licence Agreement, not the value of the entire business. Mr Burnell was entitled to repayment of his loan due to TTL's failure to issue shares as agreed, and to damages against Mr Aird for breach of...

Parties
Claimant: Alan Burnell; First Defendant: Trans-Tag Limited; Second Defendant: Robert Aird
Jurisdiction
England and Wales
Judgment Date
28 May 2021
Procedural Posture
Civil (commercial/company) / Judgment After Trial
Outcome
Claim and counterclaim both succeed in part; set-off ordered.
Legal Topics
Director's Duties, Breach of Contract, Loan Agreements, Shareholder Agreements, Breach of Confidence, Restitution, Valuation of Company Assets
Company Law Contract Law Fiduciary Duties Equity Director's Duties Breach of Contract Loan Agreements Shareholder Agreements +3 more

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Parties

Alan Burnell

Claimant

Trans-Tag Limited

First Defendant

Robert Aird

Second Defendant

Procedural Posture

Civil (commercial/company) / Judgment After Trial

Legal Issues

  1. 1 Whether Mr Burnell is entitled to repayment of his loan to TTL and/or damages for breach of contract against Mr Aird for failure to procure shares in TTL;
  2. 2 Whether Mr Burnell was a de facto or de jure director of TTL and owed fiduciary duties;
  3. 3 Whether Mr Burnell breached fiduciary duties or duties of confidence to TTL by acquiring TTS and/or exploiting confidential information;

Ratio Decidendi

Mr Burnell was not a de jure or de facto director of TTL before 28 February 2017, but became a de facto director from 28 February to 29 March 2017, owing fiduciary duties. He did not breach those duties during his directorship, but after ceasing to be a director, he breached his continuing duty under s.175 CA 2006 by acquiring TTS and using confidential information to terminate TTL's licence, depriving TTL of its rights. TTL's only recoverable loss was the value of its rights under the Licence Agreement, not the value of the entire business. Mr Burnell was entitled to repayment of his loan due to TTL's failure to issue shares as agreed, and to damages against Mr Aird for breach of...

Court Disposition

Claim and counterclaim both succeed in part; set-off ordered.

Orders

  • TTL to pay Mr Burnell £250,000 for repayment of the loan.
  • Mr Burnell to recover from Mr Aird damages up to £67,500 for breach of contract, limited to the value of shares or irrecoverable loan amount.