Keith Arjoon and 2 others v Maria Daniel (Trinidad and Tobago)

Keith Arjoon and 2 others v Maria Daniel (Trinidad and Tobago)

A third-party indemnity is not a pre-condition to the commencement of proceedings by a company in receivership against a receiver, but where the charged assets are insufficient to meet secured liabilities, the court should require such an indemnity to protect the debenture holder. Directors do not have standing to bring claims in their own names for breaches of duty by a receiver where the loss is suffered by the company.

Parties
Respondent: Keith Arjoon; Respondent: Shandon Arjoon; Respondent: KPG Co Ltd; Appellant: Maria Daniel (Receiver)
Jurisdiction
England and Wales
Judgment Date
04 December 2023
Procedural Posture
Civil Appeal / Final Appellate Judgment (privy Council)
Outcome
Appeal allowed
Legal Topics
Receivership, Directors' Powers, Third Party Indemnity, Standing to Sue, Costs in Receivership Litigation
Insolvency Company Law Receivership Directors' Powers Third Party Indemnity Standing to Sue Costs in Receivership Litigation

Case Brief

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Parties

Keith Arjoon

Respondent

Shandon Arjoon

Respondent

KPG Co Ltd

Respondent

Maria Daniel (Receiver)

Appellant

Procedural Posture

Civil Appeal / Final Appellate Judgment (privy Council)

Legal Issues

  1. 1 Whether a company in receivership must provide a third-party indemnity before bringing proceedings against a receiver
  2. 2 Whether directors have standing to bring claims in their own names for breaches of duty by a receiver

Ratio Decidendi

A third-party indemnity is not a pre-condition to the commencement of proceedings by a company in receivership against a receiver, but where the charged assets are insufficient to meet secured liabilities, the court should require such an indemnity to protect the debenture holder. Directors do not have standing to bring claims in their own names for breaches of duty by a receiver where the loss is suffered by the company.

Court Disposition

Appeal allowed

Orders

  • Claims of both the company and the directors are struck out
  • Interim injunction is discharged