Systems Building Services Group Ltd, Re

Systems Building Services Group Ltd, Re

Mr Michie breached fiduciary duty by purchasing company property off-market at significant undervalue, failed to act in interests of creditors, caused or allowed improper payments to CB Solutions after administration, SBSL was unjustly enriched by receipt of excluded 'cash at bank', and Mr Michie failed to account for substantial payments received from the company, rendering him liable to repay the sums.

Parties
Applicant: Stephen John Hunt; Applicant: System Building Services Group Limited (in liquidation); Respondent: Brian Michie; Respondent: Systems Building Services Limited
Jurisdiction
England and Wales
Judgment Date
21 January 2020
Procedural Posture
Insolvency Application / Judgment After Trial
Outcome
Judgment for Applicants on heads 1 and 2, secondary case on head 3, and partial sum on head 4.
Legal Topics
Directors' Duties, Constructive Trust, Misfeasance, Unjust Enrichment, Failure of Consideration, Director's Loan Account
Company Law Insolvency Law Directors' Duties Constructive Trust Misfeasance Unjust Enrichment Failure of Consideration Director's Loan Account

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Parties

Stephen John Hunt

Applicant

System Building Services Group Limited (in liquidation)

Applicant

Brian Michie

Respondent

Systems Building Services Limited

Respondent

Procedural Posture

Insolvency Application / Judgment After Trial

Legal Issues

  1. 1 Whether Mr Michie breached fiduciary duties as director in purchasing company property at undervalue
  2. 2 Whether Mr Michie caused or allowed payments to CB Solutions after administration in breach of duty
  3. 3 Whether SBSL was unjustly enriched by payments from the company and liable to repay excluded sums

Ratio Decidendi

Mr Michie breached fiduciary duty by purchasing company property off-market at significant undervalue, failed to act in interests of creditors, caused or allowed improper payments to CB Solutions after administration, SBSL was unjustly enriched by receipt of excluded 'cash at bank', and Mr Michie failed to account for substantial payments received from the company, rendering him liable to repay the sums.

Court Disposition

Judgment for Applicants on heads 1 and 2, secondary case on head 3, and partial sum on head 4.

Orders

  • Declaration that Mr Michie holds property on constructive trust for company, subject to credit for purchase price and repairs.
  • Order for Mr Michie to contribute £19,000 plus interest to company assets for CB Solutions payments.