Trustor AB v Smallbone & Ors [2001] EWHC 703 (Ch) (16 March 2001)

Trustor AB v Smallbone & Ors [2001] EWHC 703 (Ch) (16 March 2001)

The court is entitled to pierce the corporate veil and treat the receipt by Introcom as receipt by Mr Smallbone because Introcom was used as a device or façade for the improper receipt of Trustor's money, and Mr Smallbone controlled and directed all relevant transactions. Mr Smallbone is therefore jointly and severally liable with Introcom for the sums misappropriated.

Citation
[2001] EWHC 703 (Ch)
Parties
Claimant: Trustor AB; First Defendant: Mr Smallbone; Second Defendant: Introcom (International) Ltd
Jurisdiction
England and Wales
Judgment Date
16 March 2001
Procedural Posture
Civil – Summary Judgment Application / Post Court of Appeal, Application for Further Summary Judgment
Outcome
Summary judgment granted for knowing receipt; Mr Smallbone held jointly and severally liable with Introcom for the sums misappropriated.
Legal Topics
Piercing the Corporate Veil, Knowing Receipt, Constructive Trusts, Director's Duties, Restitution
Equity Company Law Trusts Piercing the Corporate Veil Knowing Receipt Constructive Trusts Director's Duties Restitution

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Parties

Trustor AB

Claimant

Mr Smallbone

First Defendant

Introcom (International) Ltd

Second Defendant

Procedural Posture

Civil – Summary Judgment Application / Post Court of Appeal, Application for Further Summary Judgment

Legal Issues

  1. 1 Whether the court should pierce the corporate veil to treat receipt by Introcom as receipt by Mr Smallbone for purposes of knowing receipt
  2. 2 Whether Mr Smallbone is jointly and severally liable with Introcom for the sums misappropriated from Trustor

Ratio Decidendi

The court is entitled to pierce the corporate veil and treat the receipt by Introcom as receipt by Mr Smallbone because Introcom was used as a device or façade for the improper receipt of Trustor's money, and Mr Smallbone controlled and directed all relevant transactions. Mr Smallbone is therefore jointly and severally liable with Introcom for the sums misappropriated.

Court Disposition

Summary judgment granted for knowing receipt; Mr Smallbone held jointly and severally liable with Introcom for the sums misappropriated.

Orders

  • Mr Smallbone to pay Trustor SEK 166.7 million, £404,100 and FIM 75.5 million with interest at 8% from 1 November 1997 until payment, jointly and severally with Introcom.
  • Order made under CPR Rule 24.2.