First Subsea Ltd v Balltec Ltd & Ors

First Subsea Ltd v Balltec Ltd & Ors

A director is a class 1 fiduciary and thus a trustee for the purposes of s.21 of the Limitation Act 1980. Where the director's breaches of fiduciary duty are found to be fraudulent, s.21(1)(a) applies and no limitation period bars the claim. The breaches by Mr Emmett were properly pleaded and proved to be dishonest and intended to injure the company, justifying the judge's finding that s.21(1)(a) applied. The appeal is dismissed.

Parties
Claimant/respondent: First Subsea Limited (formerly BSW Limited); Defendant/appellant: Balltec Limited; Defendant/appellant: Robert Emmett; Defendant/appellant: Russell Benson; Defendant/appellant: Roger Bacon
Jurisdiction
England and Wales
Judgment Date
30 March 2017
Procedural Posture
Civil Appeal / Appeal From High Court Judgment on Liability
Outcome
Appeal dismissed
Legal Topics
Directors' Fiduciary Duties, Limitation Periods for Breach of Trust, Fraudulent Breach of Trust, Constructive Trusts, Remedies for Breach of Fiduciary Duty
Company Law Equity and Trusts Limitation of Actions Directors' Fiduciary Duties Limitation Periods for Breach of Trust Fraudulent Breach of Trust Constructive Trusts Remedies for Breach of Fiduciary Duty

Case Brief

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Parties

First Subsea Limited (formerly BSW Limited)

Claimant/respondent

Balltec Limited

Defendant/appellant

Robert Emmett

Defendant/appellant

Russell Benson

Defendant/appellant

Roger Bacon

Defendant/appellant

Procedural Posture

Civil Appeal / Appeal From High Court Judgment on Liability

Legal Issues

  1. 1 Whether claims against a director for breach of fiduciary duty are statute barred under s.21 of the Limitation Act 1980
  2. 2 Whether the breaches were fraudulent within the meaning of s.21(1)(a)
  3. 3 Whether the claims fall within s.21(1)(b) as actions to recover trust property

Ratio Decidendi

A director is a class 1 fiduciary and thus a trustee for the purposes of s.21 of the Limitation Act 1980. Where the director's breaches of fiduciary duty are found to be fraudulent, s.21(1)(a) applies and no limitation period bars the claim. The breaches by Mr Emmett were properly pleaded and proved to be dishonest and intended to injure the company, justifying the judge's finding that s.21(1)(a) applied. The appeal is dismissed.

Court Disposition

Appeal dismissed

Orders

  • Mr Emmett remains liable to account or pay damages for breaches of fiduciary duty as ordered by the High Court
  • No limitation period bars the claims for fraudulent breach of fiduciary duty