Coleman Taymar Ltd and Others v Oakes and Another

JurisdictionEngland & Wales
Judgment Date19 July 2001
Date19 July 2001
CourtChancery Division

CHANCERY DIVISION

Before Judge Reid, QC.

Coleman Taymar Ltd and Others
and
Oakes and Another

Directors - breach of duty - liability to account - similar to that to pay damages

Director's liability to account similar to that to pay damages

A director or former director of a company was entitled to the protection from liability for honest and reasonable breaches of duty offered by section 727(1) of the Companies Act 1985 whether the relief sought against him by the company for breach of fiduciary duty was for an account of profits or an inquiry as to damages.

When exercising its discretion under section 727(1) the court had to consider not only whether the director had acted honestly, a subjective test, and reasonably, an objective test, but also whether in all the circumstances the director ought fairly to be excused from liability, either absolutely or on such terms as the court thought fit.

Judge Reid, QC, sitting as a Chancery Division judge, so held in a reserved judgment, giving judgment for the first claimant, Coleman Taymar Ltd, on its claim against the first defendant, Malcolm Oakes, for breach of confidence and/or breach of fiduciary duty, relating to his misusing confidential information he had received while a director of Taymar in order to enter into wrongful competition with that company, either personally or through the agency of the second defendant, Gogas (UK) plc, a company controlled by him.

His Lordship said that Taymar was entitled to an account of profits, limited to the benefit, if any, accruing to Mr Oakes out of: (i) his failure to notify Taymar of his conflict of interest and/or misuse of confidential information as to Taymar's surrender of its tenancies of business premises in the Stockport area; (ii) his use of Taymar staff in connection with preliminary steps taken by him in setting up his rival business; and (iii) his indirect purchase of equipment belonging to Taymar.

The claim of the second claimant, Coleman (UK) plc, was abandoned in the course of the hearing. His Lordship held that the third claimant, Coleman Company Inc, the American parent company of the first claimant, was entitled only to nominal damages of Pounds 2.

Mr Michael Supperstone, QC and Mr Andrew Clutterbuck for the claimants; Mr David Oliver, QC and Mr Thomas Moody-Stuart for Mr Oakes; Gogas did not appear and was not represented.

HIS LORDSHIP said that as a director and senior employee of Taymar, Mr Oakes owed Taymar both contractual and...

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12 cases
  • Kevin Hellard and Another v Horacio Luis De Brito Carvalho
    • United Kingdom
    • Chancery Division
    • 25 September 2013
    ...circumstances he ought fairly to be excused. The first of these is a subjective requirement, the second an objective requirement: Coleman Taymar Ltd v Oakes [2001] 2 BCLC 749 per HHJ Reid QC at [85]; (b) The burden of establishing honesty and reasonableness lies on the director: Bairstow v ......
  • The Northampton Regional Livestock Centre Company Ltd v Richard Andrew Cowling and Another
    • United Kingdom
    • Queen's Bench Division
    • 23 January 2014
    ...from his liability on such terms as it thinks fit…" 160 There is little authority to guide the construction of Section 1157. In Coleman Taymoar v Oakes [2001] 2 BLC 749 it was held that the power to grant relief (under the old provision) applied to an account as well as to damages. In this ......
  • Mark Simon Reynolds (as Liquidator of CSB 123 Ltd) v Caroline Stanbury
    • United Kingdom
    • Chancery Division
    • 23 September 2021
    ...court may relieve him, either wholly or in part, from his liability on such terms as it thinks fit …’ 531 In Coleman Taymar Ltd v Oakes [2001] 2 BCLC 749 it was stated (at [83]): ‘Section 727 [the old section 1159] requires an essentially subjective approach”: per Knox J in re Produce Marke......
  • Shepherds Investments Ltd v Walters and Others
    • United Kingdom
    • Chancery Division
    • 12 April 2006
    ...v Anderson [1995] 1 BCLC 475 (Blackburne J); Saatchi & Saatchi Company plc v Saatchi (unreptd) 13.2.1995 (Jonathan Parker J); and Coleman Taymar Ltd v Oakes [2001] 2 BCLC 749 (HH Judge Robert Reid Q.C., sitting as a High Court Judge). 97 Analysing the reported cases, Mr Quirk submitted that......
  • Request a trial to view additional results
4 books & journal articles
  • The Continuing Value of Relief for Directors' Breach of Duty
    • United Kingdom
    • The Modern Law Review No. 66-2, March 2003
    • 1 March 2003
    ...3.77.14 ibid, para 153. See also White Paper I, n 4 above, 8–9 and 15.15 On fiduciary duties and relief see Coleman Taymar Ltd vOakes [2001] 2 BCLC 749, discussed inthe text to n 117 below; as for relief in criminal proceedings, see the discussion beginning in thetext associated with n 121.T......
  • The Elusive Nature of the ‘Public Function’: Poplar Housing and Regeneration Community Association Ltd v Donoghue
    • United Kingdom
    • The Modern Law Review No. 66-1, January 2003
    • 1 January 2003
    ...privatisation andcontractualisation of the state has been recognised as ‘‘one of the most important31 [2002] 2 B.C.L.C. 201, 224.32 [2001] 2 B.C.L.C. 749.33 The section empowers the court to grant relief to directors from liability for, inter alia, breach ofduty where the director has acted......
  • AN ISSUE OF ABSOLUTION - SECTION 391 OF THE COMPANIES ACT
    • Singapore
    • Singapore Academy of Law Journal No. 2003, December 2003
    • 1 December 2003
    ...not the word “dishonestly”, but the word “honestly”. 29 [1937] 4 All ER 43, 47. 30 See text to note 74 below. 31 [1989] 1 WLR 745. 32 [2001] 2 BCLC 749. 33 [2001] BCLC 531, 550. 34 [1995] 2 AC 378. 35 Ibid, 389. 36 See Twinsectra Ltd v Yardley[2002] 2 WLR 802, 809, per Lord Hutton. 37 [1991......
  • Case Note: DISCLOSING CONFLICTS OF INTERESTS
    • Singapore
    • Singapore Academy of Law Journal No. 2005, December 2005
    • 1 December 2005
    ...our s 156 is derived, and the successor of which is s 317 of the English Companies Act 1985. 40 Supra n 38, at 594. 41 Id at 589. 42 [2001] 2 BCLC 749 at [77]. 43 Supra, n 38. 44 Ibid at 590. 45 Fourth Schedule, Companies Act. 46 Supra n 1, at [14]....

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