Fairford Water Ski Club Ltd v Cohoon & Ors [2020] EWHC 290 (Comm) (28 February 2020)

Fairford Water Ski Club Ltd v Cohoon & Ors [2020] EWHC 290 (Comm) (28 February 2020)

Directors who fail to comply with statutory and fiduciary duties, including full disclosure of conflicted interests and unauthorised payments, are accountable to the company for losses and profits derived from breach. Management fees paid without proper shareholder approval and full disclosure are recoverable. Watersports' entitlement to management fees depends on compliance with section 317 Companies Act 1985 and shareholder approval. Alternate directors are liable only for acts when acting in office.

Citation
[2020] EWHC 290 (Comm)
Parties
Claimant: Fairford Water Ski Club Limited; Defendant: Craig Ronald Cohoon; Defendant: Scott Richard Cohoon; Defendant: Jane Louise Cohoon; Defendant: Craig Cohoon Watersports (A Firm)
Jurisdiction
England and Wales
Judgment Date
28 February 2020
Procedural Posture
Commercial Claim and Counterclaim / Post Trial Judgment
Outcome
Claim partially upheld, counterclaim partially upheld
Legal Topics
Directors' Duties, Breach of Fiduciary Duty, Management Agreement, Conflict of Interest, Disclosure Requirements, Remedies for Breach, Counterclaim for Management Fees
Company Law Commercial Law Fiduciary Law Directors' Duties Breach of Fiduciary Duty Management Agreement Conflict of Interest Disclosure Requirements +2 more

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Parties

Fairford Water Ski Club Limited

Claimant

Craig Ronald Cohoon

Defendant

Scott Richard Cohoon

Defendant

Jane Louise Cohoon

Defendant

Craig Cohoon Watersports (A Firm)

Defendant

Procedural Posture

Commercial Claim and Counterclaim / Post Trial Judgment

Legal Issues

  1. 1 Whether the defendants breached fiduciary duties as directors under Companies Act 2006
  2. 2 Whether management fees and property transfers were unauthorised and in breach of duty
  3. 3 Whether Watersports is entitled to management fees under a management agreement

Ratio Decidendi

Directors who fail to comply with statutory and fiduciary duties, including full disclosure of conflicted interests and unauthorised payments, are accountable to the company for losses and profits derived from breach. Management fees paid without proper shareholder approval and full disclosure are recoverable. Watersports' entitlement to management fees depends on compliance with section 317 Companies Act 1985 and shareholder approval. Alternate directors are liable only for acts when acting in office.

Court Disposition

Claim partially upheld, counterclaim partially upheld

Orders

  • Craig, Scott, and Watersports to account for £8,529 bank loan cashback
  • Management fees paid without proper approval to be repaid to Club