Varden Nuttall Ltd v Nuttall & Anor [2018] EWHC 3868 (Ch) (25 May 2018)

Varden Nuttall Ltd v Nuttall & Anor [2018] EWHC 3868 (Ch) (25 May 2018)

Mr Nuttall breached his duties as director by failing to exercise proper oversight and control over trust monies, resulting in a proven shortfall of at least £1.3 million, and is liable to the company for that sum or such further sum as may be established on inquiry. The claimants did not prove dishonesty or breach in relation to VAT refunds or other arrangements to the requisite standard for further liability. The claimants are entitled to judgment for the admitted shortfall and an inquiry as to the true quantum of loss.

Citation
[2018] EWHC 3868 (Ch)
Parties
Claimant: Varden Nuttall Limited (In Administration) (acting by its Joint Administrators); Claimant: David Michael Clements, Paul Atkinson and Kenneth Webster Marland (acting as Supervisors of the Individual Voluntary Arrangements of Riane Langton and others); Defendant: Philip Nuttall; Defendant: Darren Varden
Jurisdiction
England and Wales
Judgment Date
25 May 2018
Procedural Posture
Civil (insolvency/company) / Trial Judgment (all Issues Including Quantum)
Outcome
Judgment for claimants in part; inquiry as to quantum ordered.
Legal Topics
Directors' Duties, Breach of Trust, Dishonesty (civil Standard), Individual Voluntary Arrangements (iva), Misapplication of Funds, Secret Commissions, Quantum of Loss, Professional Regulation
Insolvency Company Law Trusts Professional Negligence Directors' Duties Breach of Trust Dishonesty (civil Standard) Individual Voluntary Arrangements (iva) +4 more

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Parties

Varden Nuttall Limited (In Administration) (acting by its Joint Administrators)

Claimant

David Michael Clements, Paul Atkinson and Kenneth Webster Marland (acting as Supervisors of the Individual Voluntary Arrangements of Riane Langton and others)

Claimant

Philip Nuttall

Defendant

Darren Varden

Defendant

Procedural Posture

Civil (insolvency/company) / Trial Judgment (all Issues Including Quantum)

Legal Issues

  1. 1 Whether Mr Nuttall breached his duties as director of Varden Nuttall Limited by failing to safeguard trust/estate monies and permitting improper payments.
  2. 2 Whether Mr Nuttall dishonestly breached his duties as supervisor of IVAs by authorising or permitting improper deductions and arrangements.
  3. 3 Whether the claimants proved the quantum of loss resulting from the breaches.

Ratio Decidendi

Mr Nuttall breached his duties as director by failing to exercise proper oversight and control over trust monies, resulting in a proven shortfall of at least £1.3 million, and is liable to the company for that sum or such further sum as may be established on inquiry. The claimants did not prove dishonesty or breach in relation to VAT refunds or other arrangements to the requisite standard for further liability. The claimants are entitled to judgment for the admitted shortfall and an inquiry as to the true quantum of loss.

Court Disposition

Judgment for claimants in part; inquiry as to quantum ordered.

Orders

  • Claimants entitled to judgment for £1.3 million shortfall admitted by Mr Nuttall or, at their option, an inquiry as to the true amount of the shortfall.
  • Claimants entitled to recover costs of reconciliation exercise, subject to further submissions on quantum.