Shepherds Investments Ltd & Anor v Walters & Ors

Shepherds Investments Ltd & Anor v Walters & Ors

The Individual Defendants, by 12 August 2003, had formed the irrevocable intention to establish a competing business and took steps in conflict with their fiduciary duties and obligations of loyalty to the claimants. These steps went beyond permissible preparatory activity and were not disclosed to the claimants. Mr Walters also breached express contractual terms. However, the claimants failed to prove causation of loss for damages. The claimants are entitled to an account of profits from the Individual Defendants, but not damages. The claim for misuse of confidential information was not established.

Parties
Claimant: Shepherds Investments Limited; Claimant: Shepherds (Financial) Limited; Defendant: Andrew Walters; Defendant: Mike Simmons; Defendant: Mark Hindle; Defendant: Alan Morgan-Moodie; Defendant: Assured Fund Limited; Defendant: Policy Selection Limited
Jurisdiction
England and Wales
Judgment Date
12 April 2006
Procedural Posture
Civil (company/employment/fiduciary Duties) / Judgment After Trial
Outcome
Claim partly allowed; account of profits ordered against Individual Defendants; damages refused; claim for misuse of confidential information dismissed.
Legal Topics
Fiduciary Duties, Breach of Contract, Employee Loyalty, Diversion of Business Opportunity, Misuse of Confidential Information, Account of Profits, Damages
Company Law Employment Law Equity and Trusts Fiduciary Duties Breach of Contract Employee Loyalty Diversion of Business Opportunity Misuse of Confidential Information +2 more

Case Brief

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Parties

Shepherds Investments Limited

Claimant

Shepherds (Financial) Limited

Claimant

Andrew Walters

Defendant

Mike Simmons

Defendant

Mark Hindle

Defendant

Alan Morgan-Moodie

Defendant

Assured Fund Limited

Defendant

Policy Selection Limited

Defendant

Procedural Posture

Civil (company/employment/fiduciary Duties) / Judgment After Trial

Legal Issues

  1. 1 Whether the Individual Defendants breached fiduciary duties and contractual obligations by setting up a competing business while employed/directors
  2. 2 Whether confidential information was misused
  3. 3 Whether there was diversion of a maturing business opportunity

Ratio Decidendi

The Individual Defendants, by 12 August 2003, had formed the irrevocable intention to establish a competing business and took steps in conflict with their fiduciary duties and obligations of loyalty to the claimants. These steps went beyond permissible preparatory activity and were not disclosed to the claimants. Mr Walters also breached express contractual terms. However, the claimants failed to prove causation of loss for damages. The claimants are entitled to an account of profits from the Individual Defendants, but not damages. The claim for misuse of confidential information was not established.

Court Disposition

Claim partly allowed; account of profits ordered against Individual Defendants; damages refused; claim for misuse of confidential information dismissed.

Orders

  • Account of profits to be taken against Mr Walters, Mr Simmons, and Mr Hindle for profits made from breaches of duty.
  • No order for damages as causation of loss not established.