Fiduciary Duty CASES

A double derivative action brought by John Snr's sons against their uncle Ronald, alleging he fraudulently transferred Casterbridge's assets to himself or his family's trust, depriving them of their 30% entitlement. The court dismissed all claims, finding no fraud, breach of fiduciary duty, or de facto directorship established.

Directors of Regal used their position to acquire shares in a subsidiary company, Amalgamated, which they subsequently sold at profit. The House of Lords held that directors in a fiduciary position must account for profits made by reason of that position, regardless of good faith or whether the company suffered loss.

The appellants, former fiduciaries of the respondents, exploited a business opportunity obtained through their fiduciary positions to provide recovery services after resigning. The Supreme Court upheld the requirement to account for all profits made, rejecting arguments that a 'but for' causation test should apply to reduce accountability. The case affirms the strict profit rule for fiduciaries.

Charles Saatchi sought permission to continue a derivative claim on behalf of Triptych Logistics Limited against its sole director, Rahul Gajjar, alleging misappropriation of company assets including unauthorised loans, payroll payments, vehicle purchases, and credit card misuse. The court granted permission, finding sufficient merit in the claims.

Craig Whyte, former director of Rangers Football Club and Tixway Limited, was disqualified from being a company director for 15 years. The court found his conduct demonstrated dishonesty, breach of fiduciary duties, misuse of company funds, and wilful disregard for creditors' interests and administrative duties.

Directors' disqualification proceedings against two individuals who controlled three insolvent companies. They diverted company funds to other businesses in which one had interests, causing substantial creditor losses. Both were found unfit as directors for failing to respect corporate personality principles and were disqualified for seven and eleven years respectively.

Mr Ruhan, a director of HPII, secretly purchased hotels from HPII through a nominee (Mr Stevens), resold them for £102m profit, then dissipated the funds. The Supreme Court held that a dishonest assistant in dissipating profits held on constructive trust is liable to compensate the beneficiary for the loss, even where the profits arose from an earlier breach causing no loss.

UPMS, a member of an LLP which wholly owned Fort Gilkicker Ltd, sought permission to bring a double derivative action against a director who allegedly misappropriated a business opportunity. The court held that multiple derivative actions survived the Companies Act 2006 and granted permission to continue the claim.