Hamuel Reichenbacher Ltd v McDermott [2022] EWHC 623 (Ch) (23 March 2022)

Hamuel Reichenbacher Ltd v McDermott [2022] EWHC 623 (Ch) (23 March 2022)

The court found that Mr McDermott breached his fiduciary and contractual duties as director and employee of HR by misapplying company funds, failing to account for company property, and acting in conflict of interest. The Shareholders' Agreement governed the terms of his engagement, and no enforceable right to...

Source-derived case information.

Citation
[2022] EWHC 623 (Ch)
Parties
Claimant: Hamuel Reichenbacher Limited; Defendant: Robert McDermott
Jurisdiction
England and Wales
Judgment Date
23 March 2022
Procedural Posture
Civil Company Law / Director's Duties / High Court Trial Judgment
Outcome
Claim allowed in part; counterclaim dismissed in substantial part
Legal Topics
Director's Fiduciary Duties, Breach of Contract, Equitable Compensation, Counterclaim, Shareholders' Agreement, Remuneration and Benefits, Conflicts of Interest
Company Law Employment Law Director's Fiduciary Duties Breach of Contract Equitable Compensation Counterclaim Shareholders' Agreement Remuneration and Benefits +1 more

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Summary, issues, holding and outcome

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Parties

Hamuel Reichenbacher Limited

Claimant

Robert McDermott

Defendant

Procedural Posture

Civil Company Law / Director's Duties / High Court Trial Judgment

Legal Issues

  1. 1 Whether Mr McDermott breached his fiduciary and contractual duties as director and employee of HR
  2. 2 Whether Mr McDermott is liable to account for company property and improper payments
  3. 3 Whether the Shareholders' Agreement and/or any service contract governed the terms of Mr McDermott's engagement

Ratio Decidendi

The court found that Mr McDermott breached his fiduciary and contractual duties as director and employee of HR by misapplying company funds, failing to account for company property, and acting in conflict of interest. The Shareholders' Agreement governed the terms of his engagement, and no enforceable right to additional benefits or higher share value was established. The counterclaims were largely dismissed. The claimant was entitled to recover sums improperly paid or retained by Mr McDermott.

Court Disposition

Claim allowed in part; counterclaim dismissed in substantial part

Orders

  • Mr McDermott to pay to the claimant sums found due for breach of duty and improper payments
  • Counterclaim for share value, stress, and other sums dismissed