Tarn Insurance Services Ltd v Kirby & Ors

Tarn Insurance Services Ltd v Kirby & Ors

The Court of Appeal held that the High Court judge erred in granting Mr Kirby relief from the sanction of being debarred from defending due to deliberate and persistent non-compliance with disclosure and information orders made to protect proprietary claims. The seriousness of the allegations and the existence of a real prospect of defence were not decisive; the overriding objective and administration of justice required the sanction to take effect. The evidence of breach of fiduciary duty and fraud was overwhelming, justifying summary judgment against Mr Kirby, Mr Holden, and STS. However, summary judgment was not appropriate against Mr Rodriguez and Outtake on the bribery claims as...

Parties
Claimant/appellant: Tarn Insurance Services Limited (in administration); Defendant/respondent: Mr Stephen Kirby; Defendant/respondent: Mr Tony Bennett; Defendant/respondent: Mr Stephen Hirst; Defendant/respondent: Mr David Holden; Defendant/respondent: STS Insurance Services Limited; Defendant/respondent: Luxury Bathe Limited; Defendant/respondent: Get With It Limited; Defendant/respondent: Mr Francisco Xavier Rodriguez-Purcet; Defendant/respondent: Outtake Limited
Jurisdiction
England and Wales
Judgment Date
27 January 2009
Procedural Posture
Civil Appeal / Court of Appeal Judgment on Appeal From High Court (chancery Division)
Outcome
Appeal allowed in part, dismissed in part.
Legal Topics
Directors' Fiduciary Duties, Breach of Fiduciary Duty, Constructive Trusts, Summary Judgment, Relief From Sanctions, Freezing Orders, Bribery and Secret Commissions, Disclosure Obligations
Company Law Insolvency Law Civil Procedure Directors' Fiduciary Duties Breach of Fiduciary Duty Constructive Trusts Summary Judgment Relief From Sanctions +3 more

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Parties

Tarn Insurance Services Limited (in administration)

Claimant/appellant

Mr Stephen Kirby

Defendant/respondent

Mr Tony Bennett

Defendant/respondent

Mr Stephen Hirst

Defendant/respondent

Mr David Holden

Defendant/respondent

STS Insurance Services Limited

Defendant/respondent

Luxury Bathe Limited

Defendant/respondent

Get With It Limited

Defendant/respondent

Mr Francisco Xavier Rodriguez-Purcet

Defendant/respondent

Outtake Limited

Defendant/respondent

Procedural Posture

Civil Appeal / Court of Appeal Judgment on Appeal From High Court (chancery Division)

Legal Issues

  1. 1 Whether the High Court judge erred in granting relief from sanctions to Mr Kirby after breach of an unless order for disclosure and provision of information under freezing orders.
  2. 2 Whether summary judgment should have been entered against Mr Kirby, Mr Holden, STS, Mr Rodriguez, and Outtake for claims of breach of fiduciary duty, knowing receipt, and bribery/secret commission.
  3. 3 Whether the STS Agreement was entered into in breach of fiduciary duty and was voidable or should be set aside.

Ratio Decidendi

The Court of Appeal held that the High Court judge erred in granting Mr Kirby relief from the sanction of being debarred from defending due to deliberate and persistent non-compliance with disclosure and information orders made to protect proprietary claims. The seriousness of the allegations and the existence of a real prospect of defence were not decisive; the overriding objective and administration of justice required the sanction to take effect. The evidence of breach of fiduciary duty and fraud was overwhelming, justifying summary judgment against Mr Kirby, Mr Holden, and STS. However, summary judgment was not appropriate against Mr Rodriguez and Outtake on the bribery claims as...

Court Disposition

Appeal allowed in part, dismissed in part.

Orders

  • Paragraph 1 of the High Court order of 2 July 2008 (granting Mr Kirby relief from sanction) set aside; Mr Kirby debarred from defending the proceedings.
  • Appeal from refusal to grant summary judgment against Mr Rodriguez and Outtake dismissed; they may defend the bribery claims.