In Plus Group Ltd. & Ors v Pyke [2002] EWCA Civ 370 (21st March, 2002)

In Plus Group Ltd. & Ors v Pyke [2002] EWCA Civ 370 (21st March, 2002)

A director who has been excluded from management and denied access to company information and income does not breach fiduciary duty by competing with the company, especially where the company has no realistic prospect of business with the relevant customer. Only the company to which the director advanced the loan is...

Source-derived case information.

Citation
[2002] EWCA Civ 370
Parties
Appellant: IN PLUS GROUP LTD; Appellant: INTERIORS PLUS LTD; Appellant: JOINERY PLUS LTD; Appellant: JOINERY PLUS PRODUCTS LTD; Respondent: JOHN ALBERT PYKE
Jurisdiction
England and Wales
Procedural Posture
Civil Appeal / Appeal From Central London County Court Judgment
Outcome
Appeal allowed in part and dismissed in part
Legal Topics
Directors' Fiduciary Duties, Exclusion From Management, Competing Business, Directors' Loan Accounts, Remedies for Breach of Duty
Company Law Equity Directors' Fiduciary Duties Exclusion From Management Competing Business Directors' Loan Accounts Remedies for Breach of Duty

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Summary, issues, holding and outcome

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Parties

IN PLUS GROUP LTD

Appellant

INTERIORS PLUS LTD

Appellant

JOINERY PLUS LTD

Appellant

JOINERY PLUS PRODUCTS LTD

Appellant

JOHN ALBERT PYKE

Respondent

Procedural Posture

Civil Appeal / Appeal From Central London County Court Judgment

Legal Issues

  1. 1 Whether a director excluded from management owes fiduciary duties regarding competing business
  2. 2 Whether the respondent was liable to account for profits made from a competing business while still a director
  3. 3 Proper allocation of liability for director's loan account among group companies

Ratio Decidendi

A director who has been excluded from management and denied access to company information and income does not breach fiduciary duty by competing with the company, especially where the company has no realistic prospect of business with the relevant customer. Only the company to which the director advanced the loan is liable for repayment, and deductions from the loan account must be justified by evidence and company practice.

Court Disposition

Appeal allowed in part and dismissed in part

Orders

  • Judgment against all claimants for the balance due on the director's loan account reversed; only the second claimant (Interiors Plus Ltd) is liable to Mr Pyke for the unpaid balance of his loan.
  • The claim for breach of fiduciary duty against Mr Pyke is dismissed.