Global Energy Horizons Corp v Gray

Global Energy Horizons Corp v Gray

Mr Gray owed fiduciary duties to GEHC in relation to the Acquisition Strategy and AWS technology as a result of his role in the deal team, the equalisation agreement, and his conduct in promoting GEHC’s interests. He breached those duties by placing himself in a position of conflict and by taking a personal interest in RegEnersys’s profits (the business opportunity belonging to GEHC) without fully informed consent. GEHC did not give fully informed consent to these breaches, except as to Mr Gray acting for Mr Heerema in the share sale. GEHC is entitled to account of profits and equitable compensation, subject to further inquiry as to quantum.

Parties
Claimant: Global Energy Horizons Corp; Defendant: Robert Gresham Gray
Jurisdiction
England and Wales
Judgment Date
21 December 2012
Procedural Posture
Civil (fiduciary Duties, Commercial Dispute) / Judgment After Liability Trial
Outcome
Judgment for the Claimant (GEHC) on liability for breach of fiduciary duty.
Legal Topics
Fiduciary Duties, Constructive Trusts, Conflict of Interest, Business Opportunity Doctrine, Remedies for Breach of Fiduciary Duty, Consent and Acquiescence, Account of Profits, Equitable Compensation
Commercial Law Equity and Trusts Company Law Fiduciary Duties Constructive Trusts Conflict of Interest Business Opportunity Doctrine Remedies for Breach of Fiduciary Duty +3 more

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Parties

Global Energy Horizons Corp

Claimant

Robert Gresham Gray

Defendant

Procedural Posture

Civil (fiduciary Duties, Commercial Dispute) / Judgment After Liability Trial

Legal Issues

  1. 1 Did Mr Gray owe fiduciary duties to GEHC in connection with the exploitation/commercialisation of the ultrasound technology?
  2. 2 If so, did Mr Gray breach those duties?
  3. 3 Did GEHC give its fully informed consent to or acquiesce in Mr Gray’s conduct?

Ratio Decidendi

Mr Gray owed fiduciary duties to GEHC in relation to the Acquisition Strategy and AWS technology as a result of his role in the deal team, the equalisation agreement, and his conduct in promoting GEHC’s interests. He breached those duties by placing himself in a position of conflict and by taking a personal interest in RegEnersys’s profits (the business opportunity belonging to GEHC) without fully informed consent. GEHC did not give fully informed consent to these breaches, except as to Mr Gray acting for Mr Heerema in the share sale. GEHC is entitled to account of profits and equitable compensation, subject to further inquiry as to quantum.

Court Disposition

Judgment for the Claimant (GEHC) on liability for breach of fiduciary duty.

Orders

  • Declaration that Mr Gray acted in breach of fiduciary duty to GEHC and is liable to account as constructive trustee for all monies and benefits received directly or indirectly from the commercialisation of the ultrasound technology (excluding amounts received for purchase of Klamath Falls shares).
  • Order for account of all sums due and payment/transfer to GEHC of monies and benefits received or receivable by Mr Gray directly or indirectly as a result of the breaches.