ON APPEAL FROM THE HIGH COURT OF JUSTICE
MR JUSTICE MORGAN
Strand, London, WC2A 2LL
B e f o r e :
LADY JUSTICE MACUR
SIR TIMOTHY LLOYD
| PAVEL SUKHORUCHKIN
HURLEY INVESTMENT HOLDINGS LIMITED
VICKGRAM HOLDINGS LIMITED
- and –
|MARC GIEBELS VAN BEKESTEIN
AMETISTA PATRIMONIAL (MAURITIUS) LIMITED
PNT CAPITAL ADVISORS
BLUE PEARL ADVISORS LIMITED
AMETISTA PATRIMONIAL SA
Mr Daniel Lightman, Mr Paul Adams and Mr Thomas Elias (instructed by Mishcon de Reya LLP) for the 1st to 5th and 7th Respondents
Hearing dates : 12th and 13th March 2014
Crown Copyright ©
The Chancellor (Sir Terence Etherton) :
The appellants' claims
The order of Christopher Clarke J
The application to Morgan J
The Judge's judgment
"In the present case, the essential case which is pleaded is that Hadar Fund Ltd and HIA would not be operated and managed through their constitutional organs but would be operated and managed informally by Pavel S, Pavel N, Marc and Sanjit and, of these four, Marc and Sanjit would effectively act as agents, or something akin to agents, for Pavel S and Pavel N. A relationship of principal and agent is a classic relationship in which fiduciary obligations are owed. I consider that the Claimants have done enough to show that they have a good arguable case on the facts and on the law that Marc and Sanjit owed Pavel S and Pavel N fiduciary duties in exercising their de facto power of management and control of Hadar Fund Ltd and HIA."
"I think that the effect of the speeches in Johnson's case can be taken as accurately summarised by Blackburne J at first instance in Giles v Rhind  2 BCLC 582 at , subject to the qualifications expressed in the judgment of Chadwick LJ in the Court of Appeal (see  1 BCLC 1 at  and ,  Ch 618 at  and ). As amended by those two qualifications, it seems to me that Blackburne J's formulation was approved by this court (Keene LJ having agreed with Chadwick LJ) in the following terms, so far as relevant:
"'(1) a loss claimed by a shareholder which is merely reflective of a loss suffered by the company - ie a loss which would be made good if the company had enforced in full its rights against the defendant wrongdoer -is not recoverable by the shareholder [save in a case where, by reason of the wrong done to it, the company is unable to pursue its claim against the wrongdoer]; (2) where there is no reasonable doubt that that is the case, the court can properly act, in advance of trial, to strike out the offending heads of claim; (3) the irrecoverable loss (being merely reflective of the company's loss) is not confined to the individual claimant's loss of dividends on his shares or diminution in the value of his shareholding in the company but extends ... to "all other payments which the shareholder might have obtained from the company if it had not been deprived of its funds" and also ... "to other payments which the company would have made if it had had the necessary funds even if the plaintiff would have received them qua employee and not qua shareholder" [save that this does not apply to the loss of future benefits to which the claimant had an expectation but no contractual entitlement]; (4) the principle is not rooted simply in the avoidance of double recovery in fact; it extends to heads of loss which the company could have claimed but has chosen not to and therefore includes the case where the company has settled for less than it might ... ; (5) provided the loss claimed by the shareholder is merely reflective of the company's loss and provided the defendant wrongdoer owed duties both to the company and to the shareholder, it is irrelevant that the duties so owed may be different in content.'
(The italicised text is taken from the judgment of Chadwick LJ
 1 BCLC 1 at  and ,  Ch 618 at  and
"In the end, my own view is that Ultraframe understates the extent to which shadow directors owe fiduciary duties. It seems to me that a shadow director will typically owe such duties in relation at least to the directions or instructions that he gives to the de jure directors. More particularly, I consider that a shadow director will normally owe the duty of good faith (or loyalty) discussed below [for the avoidance of doubt, I regard the duty of good faith as a fiduciary duty] when giving such directions or instructions. A shadow director can, I think, reasonably be expected to act in the company's interests rather than his own separate interests when giving such directions and instructions."
"I consider that I should not close my mind to the possibility that the Claimants might only prove some of the facts pleaded but still have a claim against the Defendants. However, I will wish to approach this question in a realistic way remembering that what I have to decide on this application is whether the Claimants have a good arguable claim or whether there is a serious issue to be tried in relation to their claims. I also consider that the Claimants cannot have it both ways. They strongly emphasise the serious nature of their allegations of dishonesty for the purpose of persuading me that there is a serious risk that these allegedly dishonest Defendants will dissipate their assets unless restrained by order of the court; it seems to me it would be inappropriate to accept that submission and at the same time proceed on the basis that the Claimants will not establish the alleged dishonesty but will establish some milder allegation which would allow the Claimants to say they do, but that HIA does not, have a cause of action arising out of that milder allegation."
Lady Justice Macur
Sir Timothy Lloyd