Varden Nuttall Ltd v Nuttall & Anor

Varden Nuttall Ltd v Nuttall & Anor

Mr Nuttall acted in dishonest breach of his duties as supervisor by entering into secret commission arrangements with third party service providers, enhancing fees to the detriment of IVA estates, and failed to disclose these arrangements as required by SIP 9. He was in negligent breach of his duties as director by failing to exercise proper oversight over trust monies, resulting in a shortfall. No dishonest breach was established regarding VAT repayments or accounting errors.

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 / Judgment After Trial
Outcome
Judgment for claimants in part; findings of dishonest breach as supervisor and negligent breach as director; quantum to be determined at inquiry.
Legal Topics
Breach of Fiduciary Duty, Dishonest Assistance, Director's Duties, Supervisor's Duties, Secret Commissions, Accounting Errors, Quantum Determination
Insolvency Company Law Trusts Breach of Fiduciary Duty Dishonest Assistance Director's Duties Supervisor's Duties Secret Commissions +2 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 / Judgment After Trial

Legal Issues

  1. 1 Whether Mr Nuttall breached duties as director and supervisor
  2. 2 Whether breaches were dishonest or negligent
  3. 3 Whether secret commission arrangements constituted dishonest breaches

Ratio Decidendi

Mr Nuttall acted in dishonest breach of his duties as supervisor by entering into secret commission arrangements with third party service providers, enhancing fees to the detriment of IVA estates, and failed to disclose these arrangements as required by SIP 9. He was in negligent breach of his duties as director by failing to exercise proper oversight over trust monies, resulting in a shortfall. No dishonest breach was established regarding VAT repayments or accounting errors.

Court Disposition

Judgment for claimants in part; findings of dishonest breach as supervisor and negligent breach as director; quantum to be determined at inquiry.

Orders

  • Inquiry as to quantum of losses caused by breaches
  • Company entitled to recover admitted shortfall (£1.3 million) or inquiry as to true amount