NBH Ltd & Anor v Hoare & Ors [2006] EWHC 73 (Ch) (30 January 2006)

NBH Ltd & Anor v Hoare & Ors [2006] EWHC 73 (Ch) (30 January 2006)

The purchase of the J and W assets was validly approved by Mr Hoare as sole shareholder under the Duomatic principle, satisfying s.320 Companies Act 1985. The transaction was at undervalue and beneficial to HWM, so no liability to account for profit arose under s.322. The claims of fraudulent conspiracy and improper diversion of funds through inter-company transactions were not substantiated by the evidence and failed.

Citation
[2006] EWHC 73 (Ch)
Parties
Claimant: NBH Limited; Claimant: NBH Group Limited; Defendant: Kevin Peter Hoare; Defendant: Richard George Hazell; Defendant: Karin Margarete Hardman
Jurisdiction
England and Wales
Judgment Date
30 January 2006
Procedural Posture
Civil Claim for Damages / High Court Judgment After Trial
Outcome
All claims dismissed
Legal Topics
Directors' Duties, Substantial Property Transactions, Fraudulent Conspiracy, Inter Company Transactions, Shareholder Approval, Breach of Fiduciary Duty
Company Law Commercial Law Directors' Duties Substantial Property Transactions Fraudulent Conspiracy Inter Company Transactions Shareholder Approval Breach of Fiduciary Duty

Case Brief

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Parties

NBH Limited

Claimant

NBH Group Limited

Claimant

Kevin Peter Hoare

Defendant

Richard George Hazell

Defendant

Karin Margarete Hardman

Defendant

Procedural Posture

Civil Claim for Damages / High Court Judgment After Trial

Legal Issues

  1. 1 Whether the purchase of assets by HWM from a company connected to a director without formal shareholder approval contravened Companies Act 1985 ss.320-322 and rendered the director liable to account for profits;
  2. 2 Whether the defendants were liable for losses to HWM allegedly caused by a fraudulent conspiracy to divert funds through improper inter-company transactions.

Ratio Decidendi

The purchase of the J and W assets was validly approved by Mr Hoare as sole shareholder under the Duomatic principle, satisfying s.320 Companies Act 1985. The transaction was at undervalue and beneficial to HWM, so no liability to account for profit arose under s.322. The claims of fraudulent conspiracy and improper diversion of funds through inter-company transactions were not substantiated by the evidence and failed.

Court Disposition

All claims dismissed

Orders

  • Claim 1 against Mr Hoare dismissed
  • Claims 2 and 3 against all defendants dismissed