Boston Trust Company Limited & Anor v Szerelmey Limited & Ors

Boston Trust Company Limited & Anor v Szerelmey Limited & Ors

Boston's claims in relation to asset transfers, labour arrangements, and loans/guarantees failed because Erutuf Trust had a one-third interest in the recipient companies, so there was no personal benefit to Mr Verhoef and no breach of duty; the claims did not fall within an exception to Foss v Harbottle. The only successful claim was for management/consultancy fees paid solely to Mr Verhoef, which breached the duty to act for proper purpose and to act fairly between members, as Mr Verhoef withheld Mr Krause's share to pressure him in negotiations. Boston is entitled to recovery of those fees.

Parties
Claimant: Boston Trust Company Limited; Claimant: Boston Fiduciary Management Limited; Defendant: Szerelmey Limited; Defendant: Szerelmey (GB) Limited; Defendant: Szerelmey Restoration Limited; Defendant: Tellisford Limited; Defendant: Gordon Verhoef; Defendant: Szerelmey (UK) Limited; Defendant: London Stone Limited; Defendant: Heritage House (York) Limited; Defendant: Tusk Holdings Limited; Defendant: Hare and Ransome Joinery Ltd
Jurisdiction
England and Wales
Judgment Date
14 February 2023
Procedural Posture
Derivative Claim / Final Judgment After Trial
Outcome
Claim allowed in part; dismissed in part
Legal Topics
Directors' Duties, Derivative Actions, Breach of Fiduciary Duty, Proper Purpose Rule, Good Faith, Remuneration of Directors, Knowing Receipt, Ratification and Duomatic Principle
Company Law Equity and Trusts Directors' Duties Derivative Actions Breach of Fiduciary Duty Proper Purpose Rule Good Faith Remuneration of Directors +2 more

Case Brief

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Parties

Boston Trust Company Limited

Claimant

Boston Fiduciary Management Limited

Claimant

Szerelmey Limited

Defendant

Szerelmey (GB) Limited

Defendant

Szerelmey Restoration Limited

Defendant

Tellisford Limited

Defendant

Gordon Verhoef

Defendant

Szerelmey (UK) Limited

Defendant

London Stone Limited

Defendant

Heritage House (York) Limited

Defendant

Tusk Holdings Limited

Defendant

Hare and Ransome Joinery Ltd

Defendant

Procedural Posture

Derivative Claim / Final Judgment After Trial

Legal Issues

  1. 1 Whether Mr Verhoef was a de facto or shadow director prior to 6 June 2017
  2. 2 Whether impugned transactions breached directors' duties under Companies Act 2006
  3. 3 Whether claims fall within exceptions to the rule in Foss v Harbottle

Ratio Decidendi

Boston's claims in relation to asset transfers, labour arrangements, and loans/guarantees failed because Erutuf Trust had a one-third interest in the recipient companies, so there was no personal benefit to Mr Verhoef and no breach of duty; the claims did not fall within an exception to Foss v Harbottle. The only successful claim was for management/consultancy fees paid solely to Mr Verhoef, which breached the duty to act for proper purpose and to act fairly between members, as Mr Verhoef withheld Mr Krause's share to pressure him in negotiations. Boston is entitled to recovery of those fees.

Court Disposition

Claim allowed in part; dismissed in part

Orders

  • Boston succeeds on the claim for recovery of consultancy/management fees paid to or for Mr Verhoef;
  • All other heads of claim are dismissed;