Lendy Ltd v Brooke & Ors [2020] EWHC 1475 (Ch) (02 June 2020)

Lendy Ltd v Brooke & Ors [2020] EWHC 1475 (Ch) (02 June 2020)

There is a good arguable case of misappropriation of funds by directors, the Duomatic principle does not apply to unlawful acts, there is a real risk of dissipation of assets, and a prima facie link exists between misappropriated funds and properties, justifying both freezing and proprietary injunctions.

Citation
[2020] EWHC 1475 (Ch)
Parties
Applicant / Intended Claimant: Lendy Limited (in administration); Respondent / Intended Defendant: Liam Brooke; Respondent / Intended Defendant: Tim Gordon; Respondent / Intended Defendant: LP Alhambra Limited; Respondent / Intended Defendant: RFP Holdings Limited
Jurisdiction
England and Wales
Judgment Date
02 June 2020
Procedural Posture
Interlocutory Application for Freezing Order and Proprietary Injunction / Judgment on Application
Outcome
Application granted
Legal Topics
Freezing Orders, Proprietary Injunctions, Director Duties, Misappropriation of Funds, Breach of Trust
Civil Procedure Company Law Injunctions Freezing Orders Proprietary Injunctions Director Duties Misappropriation of Funds Breach of Trust

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Parties

Lendy Limited (in administration)

Applicant / Intended Claimant

Liam Brooke

Respondent / Intended Defendant

Tim Gordon

Respondent / Intended Defendant

LP Alhambra Limited

Respondent / Intended Defendant

RFP Holdings Limited

Respondent / Intended Defendant

Procedural Posture

Interlocutory Application for Freezing Order and Proprietary Injunction / Judgment on Application

Legal Issues

  1. 1 Whether there is a good arguable case for misappropriation of funds by directors
  2. 2 Whether the Duomatic principle applies to ratification of breaches of duty involving unlawful acts
  3. 3 Whether there is a real risk of dissipation of assets justifying a freezing order

Ratio Decidendi

There is a good arguable case of misappropriation of funds by directors, the Duomatic principle does not apply to unlawful acts, there is a real risk of dissipation of assets, and a prima facie link exists between misappropriated funds and properties, justifying both freezing and proprietary injunctions.

Court Disposition

Application granted

Orders

  • Freezing order against first and second defendants
  • Proprietary injunction against first, third, and fourth defendants