Gardner v Parker [2004] EWCA Civ 781 (23 June 2004)

Gardner v Parker [2004] EWCA Civ 781 (23 June 2004)

The rule against reflective loss bars a shareholder or creditor from recovering loss that merely reflects the loss suffered by the company, even where the claim is for breach of fiduciary duty, unless the company is disabled from pursuing its claim by the defendant's wrongdoing. In this case, there was no evidence...

Source-derived case information.

Citation
[2004] EWCA Civ 781
Parties
Appellant: Rodney Mark Gardner; Respondent: Alan Parker
Jurisdiction
England and Wales
Judgment Date
23 June 2004
Procedural Posture
Civil Appeal / Appeal From High Court (chancery Division) to Court of Appeal
Outcome
Appeal dismissed
Legal Topics
Reflective Loss, Fiduciary Duties, Shareholder Claims, Creditor Claims, Assignment of Claims, Breach of Duty, Company Directors, Double Recovery
Company Law Equity Insolvency Reflective Loss Fiduciary Duties Shareholder Claims Creditor Claims Assignment of Claims +3 more

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Parties

Rodney Mark Gardner

Appellant

Alan Parker

Respondent

Procedural Posture

Civil Appeal / Appeal From High Court (chancery Division) to Court of Appeal

Legal Issues

  1. 1 Whether the rule against reflective loss bars a claim by a shareholder or creditor for loss suffered as a result of a breach of fiduciary duty by a director when the company also suffered loss
  2. 2 Whether the exception to the reflective loss rule established in Giles v Rhind applies where the company has settled or released its claim against the wrongdoer
  3. 3 Whether the rule against reflective loss applies to claims by creditors as well as shareholders

Ratio Decidendi

The rule against reflective loss bars a shareholder or creditor from recovering loss that merely reflects the loss suffered by the company, even where the claim is for breach of fiduciary duty, unless the company is disabled from pursuing its claim by the defendant's wrongdoing. In this case, there was no evidence that the company was so disabled, and the exception in Giles v Rhind did not apply. The rule also applies to claims by creditors as well as shareholders.

Court Disposition

Appeal dismissed

Orders

  • Appeal dismissed
  • Any ancillary issues to be dealt with at a later date