Hawkes v Cuddy & Ors

Hawkes v Cuddy & Ors

A nominee director's only enforceable duty to his appointor is to consult, unless a separate agreement provides otherwise, and his overriding duty is to act in the best interests of the company of which he is a director. Most of Mr Cuddy’s conduct as a director of Osprey was not the conduct of Neath’s affairs for section 994 purposes. Only limited breaches (failure to consult and misuse of confidential information) were established as unfairly prejudicial. The trial judge’s order was an appropriate remedy, and the costs orders required adjustment to reflect the seriousness and outcome of the allegations.

Parties
Appellant: Frederick Geraint Hawkes; Respondent: Simone Francesca Cuddy; Respondent: Michael Cuddy; Respondent: Neath Rugby Limited; Respondent: Neath-Swansea Ospreys Limited
Jurisdiction
England and Wales
Judgment Date
02 April 2009
Procedural Posture
Civil Appeal / Court of Appeal Judgment on Appeal From Chancery Division
Outcome
Appeal dismissed on substantive issues; costs orders varied.
Legal Topics
Unfair Prejudice, Nominee Directors' Duties, Section 994 Companies Act 2006, Section 216 Insolvency Act 1986, Shareholder Disputes, Costs Orders
Company Law Insolvency Law Unfair Prejudice Nominee Directors' Duties Section 994 Companies Act 2006 Section 216 Insolvency Act 1986 Shareholder Disputes Costs Orders

Case Brief

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Parties

Frederick Geraint Hawkes

Appellant

Simone Francesca Cuddy

Respondent

Michael Cuddy

Respondent

Neath Rugby Limited

Respondent

Neath-Swansea Ospreys Limited

Respondent

Procedural Posture

Civil Appeal / Court of Appeal Judgment on Appeal From Chancery Division

Legal Issues

  1. 1 What duties does a nominee director owe to the company and to the appointor?
  2. 2 What constitutes the 'affairs' of a company for purposes of section 994 Companies Act 2006?
  3. 3 Whether conduct of a director in a joint venture context is unfairly prejudicial under section 994?

Ratio Decidendi

A nominee director's only enforceable duty to his appointor is to consult, unless a separate agreement provides otherwise, and his overriding duty is to act in the best interests of the company of which he is a director. Most of Mr Cuddy’s conduct as a director of Osprey was not the conduct of Neath’s affairs for section 994 purposes. Only limited breaches (failure to consult and misuse of confidential information) were established as unfairly prejudicial. The trial judge’s order was an appropriate remedy, and the costs orders required adjustment to reflect the seriousness and outcome of the allegations.

Court Disposition

Appeal dismissed on substantive issues; costs orders varied.

Orders

  • Mr Hawkes' appeal on the two legal issues is dismissed.
  • Permission to appeal on other grounds refused except as to costs.