MARK JULIAN O’BRIEN v SIMON PHIPPS

MARK JULIAN O’BRIEN v SIMON PHIPPS

The court found that at the August 2013 Harvester meeting, Mr Phipps declared that half his shares in Shortfall Cover LLC belonged to Mr O’Brien, thereby creating an express oral trust. Mr Phipps intended to bind himself legally. There was no binding Profit and Loss Sharing Agreement between the parties. Mr Phipps breached trust by disposing of the shares without accounting to Mr O’Brien, who is entitled to an account and inquiry as to the proceeds and relief for breach of trust.

Parties
Claimant: Mark Julian O’Brien; Defendant: Simon Phipps
Jurisdiction
England and Wales
Judgment Date
11 September 2024
Procedural Posture
Civil (trusts/business) / Judgment After Trial
Outcome
Claim allowed in part; counterclaim dismissed
Legal Topics
Express Trusts, Declaration of Trust, Beneficial Ownership of Shares, Breach of Trust, Fiduciary Duties, Business Relationships, Counterclaim for Profit and Loss Sharing
Equity Trusts Company Law Express Trusts Declaration of Trust Beneficial Ownership of Shares Breach of Trust Fiduciary Duties +2 more

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Parties

Mark Julian O’Brien

Claimant

Simon Phipps

Defendant

Procedural Posture

Civil (trusts/business) / Judgment After Trial

Legal Issues

  1. 1 Whether Mr Phipps held his shareholding in Shortfall Cover LLC upon an express oral trust for Mr O’Brien as to half
  2. 2 Whether there was a binding Profit and Loss Sharing Agreement between Mr O’Brien and Mr Phipps
  3. 3 Whether Mr Phipps breached trust by disposing of shares without accounting to Mr O’Brien

Ratio Decidendi

The court found that at the August 2013 Harvester meeting, Mr Phipps declared that half his shares in Shortfall Cover LLC belonged to Mr O’Brien, thereby creating an express oral trust. Mr Phipps intended to bind himself legally. There was no binding Profit and Loss Sharing Agreement between the parties. Mr Phipps breached trust by disposing of the shares without accounting to Mr O’Brien, who is entitled to an account and inquiry as to the proceeds and relief for breach of trust.

Court Disposition

Claim allowed in part; counterclaim dismissed

Orders

  • Declaration that Mr Phipps held half his shares in Shortfall Cover LLC on trust for Mr O’Brien
  • Order for accounts and inquiries to determine relief due to Mr O’Brien for breach of trust