CJC MEDIA (SCOTLAND) LIMITED AGAINST KENNETH SINCLAIR [2019] ScotCS CSOH_8 (25 January 2019)

CJC MEDIA (SCOTLAND) LIMITED AGAINST KENNETH SINCLAIR [2019] ScotCS CSOH_8 (25 January 2019)

The defender breached his fiduciary duties by placing himself in a position of conflict and appropriating the pursuer’s maturing business opportunity, namely the community pharmacy contract, for Tactical Media Limited. He was obliged to account for profits arising from that breach for the year 2013-2014. The court declined to relieve him from liability under s.1157 as he did not act honestly or reasonably.

Citation
[2019] ScotCS CSOH_8
Parties
Pursuer: C.J.C. Media (Scotland) Limited; Defender: Kenneth Sinclair
Jurisdiction
Scotland
Judgment Date
25 January 2019
Procedural Posture
Commercial Action / Proof Before Answer
Outcome
Defender found liable for breach of fiduciary duty; obliged to account for profits from pharmacy contract for 2013-2014.
Legal Topics
Breach of Fiduciary Duty, Director Duties, Conflict of Interest, Accounting for Profits
Company Law Fiduciary Duties Breach of Fiduciary Duty Director Duties Conflict of Interest Accounting for Profits

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Parties

C.J.C. Media (Scotland) Limited

Pursuer

Kenneth Sinclair

Defender

Procedural Posture

Commercial Action / Proof Before Answer

Legal Issues

  1. 1 Did the defender breach fiduciary duties owed to the pursuer as director and after resignation?
  2. 2 Is the defender obliged to account for profits from the pharmacy contract obtained by Tactical Media Limited?
  3. 3 What period should the accounting cover?

Ratio Decidendi

The defender breached his fiduciary duties by placing himself in a position of conflict and appropriating the pursuer’s maturing business opportunity, namely the community pharmacy contract, for Tactical Media Limited. He was obliged to account for profits arising from that breach for the year 2013-2014. The court declined to relieve him from liability under s.1157 as he did not act honestly or reasonably.

Court Disposition

Defender found liable for breach of fiduciary duty; obliged to account for profits from pharmacy contract for 2013-2014.

Orders

  • Defender to account to pursuer for profits earned from the community pharmacy contract for the year 2013-2014.
  • Court declines to relieve defender from liability under s.1157 Companies Act 2006.