IBM United Kingdom Ltd v Lzlabs GmbH & Ors [2022] EWHC 884 (TCC) (11 April 2022)

IBM United Kingdom Ltd v Lzlabs GmbH & Ors [2022] EWHC 884 (TCC) (11 April 2022)

The claim against the Fourth and Fifth Defendants as currently pleaded is struck out for failure to plead and particularise that they acted in bad faith or outside the scope of their authority as directors, as required by the Said v Butt principle. However, the Claimant is given permission to re-amend its pleading to allege, with proper factual basis, that the directors' conduct was in breach of their section 172 duties and thus outside the protection of Said v Butt. Paragraphs 11 and 12 of the Amended Particulars of Claim are struck out as immaterial.

Citation
[2022] EWHC 884 (TCC)
Parties
Claimant: IBM United Kingdom Limited; First Defendant: LZLabs GmbH; Second Defendant: Winsopia Limited; Third Defendant: LZLabs UK Limited; Fourth Defendant: Mark Jonathan Cresswell; Fifth Defendant: Thilo Rockmann
Jurisdiction
England and Wales
Judgment Date
11 April 2022
Procedural Posture
Civil (technology and Construction Court) / Interlocutory Application for Strike Out And/or Summary Judgment
Outcome
Claim against Fourth and Fifth Defendants struck out with permission to re-amend; paragraphs 11 and 12 of Amended Particulars of Claim struck out; summary judgment granted in part.
Legal Topics
Inducing Breach of Contract, Directors' Liability, Pleading Requirements, Summary Judgment, Strike Out Applications
Contract Law Tort Law Company Law Inducing Breach of Contract Directors' Liability Pleading Requirements Summary Judgment Strike Out Applications

Case Brief

Summary, issues, holding and outcome

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Parties

IBM United Kingdom Limited

Claimant

LZLabs GmbH

First Defendant

Winsopia Limited

Second Defendant

LZLabs UK Limited

Third Defendant

Mark Jonathan Cresswell

Fourth Defendant

Thilo Rockmann

Fifth Defendant

Procedural Posture

Civil (technology and Construction Court) / Interlocutory Application for Strike Out And/or Summary Judgment

Legal Issues

  1. 1 Whether the claim against the Fourth and Fifth Defendants for inducing breach of contract is adequately pleaded
  2. 2 Whether the claim discloses a tenable cause of action against directors under the Said v Butt principle
  3. 3 Whether paragraphs of the Amended Particulars of Claim should be struck out as immaterial

Ratio Decidendi

The claim against the Fourth and Fifth Defendants as currently pleaded is struck out for failure to plead and particularise that they acted in bad faith or outside the scope of their authority as directors, as required by the Said v Butt principle. However, the Claimant is given permission to re-amend its pleading to allege, with proper factual basis, that the directors' conduct was in breach of their section 172 duties and thus outside the protection of Said v Butt. Paragraphs 11 and 12 of the Amended Particulars of Claim are struck out as immaterial.

Court Disposition

Claim against Fourth and Fifth Defendants struck out with permission to re-amend; paragraphs 11 and 12 of Amended Particulars of Claim struck out; summary judgment granted in part.

Orders

  • Paragraphs 11 and 12 of the Amended Particulars of Claim are struck out.
  • Claim against Fourth and Fifth Defendants is struck out as currently pleaded, with permission to re-amend within a short time limit.