Clark v Cutland

Clark v Cutland

The company is entitled to a proprietary tracing remedy over the pension fund assets for unauthorised payments made by Mr Cutland in breach of fiduciary duty and without authority. The court imposed a charge over the pension fund assets to secure the sum of £145,000 plus interest, set off against the loan owed by...

Source-derived case information.

Parties
Appellant: George T Clark; Respondent: Roger John Charles Cutland; Respondent: Tulgrove Limited; Respondent: Ian Adam Cave (As Trustee of the Tulgrove Limited Directors Pension Scheme)
Jurisdiction
England and Wales
Judgment Date
18 June 2003
Procedural Posture
Civil Appeal / Appeal From High Court Judgment
Outcome
Appeal allowed
Legal Topics
Unfair Prejudice, Directors' Duties, Tracing Remedy, Constructive Trust, Set Off
Company Law Equity and Trusts Unfair Prejudice Directors' Duties Tracing Remedy Constructive Trust Set Off

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Summary, issues, holding and outcome

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Parties

George T Clark

Appellant

Roger John Charles Cutland

Respondent

Tulgrove Limited

Respondent

Ian Adam Cave (As Trustee of the Tulgrove Limited Directors Pension Scheme)

Respondent

Procedural Posture

Civil Appeal / Appeal From High Court Judgment

Legal Issues

  1. 1 Whether the company is entitled to a proprietary tracing remedy against the pension fund for unauthorised payments made by a director
  2. 2 Whether set-off between the unauthorised pension contributions and the loan owed by the company to the pension fund trustees is permissible

Ratio Decidendi

The company is entitled to a proprietary tracing remedy over the pension fund assets for unauthorised payments made by Mr Cutland in breach of fiduciary duty and without authority. The court imposed a charge over the pension fund assets to secure the sum of £145,000 plus interest, set off against the loan owed by the company to the trustees, with the balance charged on the pension fund's cash reserves. The trustees had notice of the company's claim, and set-off is a convenient and permissible remedy.

Court Disposition

Appeal allowed

Orders

  • Declaration that the company is entitled to a charge over the assets of Mr Cutland’s pension fund to secure £145,000 plus interest.
  • Order that the sum is set off against the £100,000 loan owed by the company to the pension fund trustees, with interest.