Yukong Line Ltd of Korea v Rendsburg Investments Corporation of Liberia (The Rialto) (Mareva Proceedings)

JurisdictionEngland & Wales
Judgment Date23 September 1997
Date23 September 1997
CourtQueen's Bench Division (Commercial Court)
Yukong Lines Ltd
and
Rendsburg Investments Corporation and Others

Before Mr Justice Toulson

Queen's Bench Division

Directors - breach of fiduciary duty to company - no direct fiduciary duty to creditor of company

Creditor cannot sue over breach

A director of an insolvent company who acted in breach of his fiduciary duty to the company by transferring the company's assets out of the reach of its creditors owed no direct fiduciary duty towards an individual creditor of the company. No individual creditor was entitled to sue for breach of the fiduciary duty owed by the director to the company.

Where the director of an insolvent company conspired with others to effect such a transfer of the company's funds, a creditor of the company had no cause of action in conspiracy unless the predominant purpose of the conspiracy was to injure that creditor rather than to further the self-interest of the conspirators.

Mr Justice Toulson so held in the Queen's Bench Division, refusing the plaintiff shipping company, Yukong Lines Ltd, of Korea, the relief sought against the third defendant, Dimitrios Nicholas Yamvrias, in relation to the plaintiff's claim for wrongful repudiation of a charterparty of the vessel Rialto against the first defendant, Rendsburg Investments Corporation, of Liberia.

The plaintiff chartered the vessel Rialto to Rendsburg on July 8, 1995 for three years. The second defendant, Mr Yamvrias, signed the charterparty as the director of Rendsburg's brokers, Marcan Shipping (London) Ltd.

Before delivery of the vessel the market had fallen. After failing to obtain a reduction in the charter rate, on January 23, 1996 in his capacity as director of Marcan, Mr Yamvrias repudiated the charterparty. On the same day US$244,965.60 was transferred from Rendsburg's account to the second defendant, Ladidi Investments Corporation, of Liberia, followed shortly by a further transfer and the closing of Rendsburg's account.

The plaintiff brought an action on February 2, 1996 for damages claiming US$2,716,000 against Rendsburg for wrongful repudiation of the charterparty.

On the same day the plaintiff obtained a Mareva order requiring the disclosure of information regarding Rendsburg's shareholders, directors and their relationship with Marcan.

Relying on information received, the plaintiff joined Ladidi and Mr Yamvrias as defendants alleging, inter alia, that Mr Yamvrias acted as an undisclosed principal for Rendsburg, and a conspiracy by Rendsburg...

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83 cases
16 books & journal articles
  • The director's duty to take into account the interests of company creditors: when is it triggered?
    • Australia
    • Melbourne University Law Review Vol. 25 No. 2, August 2001
    • 1 August 2001
    ...of Appeal' (1997) 15 Company and Securities Law Journal 373, 374-5. (36) Yukong Lines Ltd of Korea v Rendsburg Investments Corporation [1998] BCC 870; Facia Footwear Ltd (in administration) v Hinchliffe [1998] 1 BCLC 218; Linton v Telnet Pty Ltd (1999) 30 ACSR (37) Re Frederick Inns Ltd(in ......
  • Table of Cases
    • United Kingdom
    • Wildy Simmonds & Hill Offshore Commercial Law in Bermuda - 2nd Edition Preliminary Sections
    • 30 August 2018
    ...22.12 Young v Hodge [2001] Bda LR 70, Sup Ct of Bermuda 23.14, 23.28, 23.60, 23.70, 23.89 Yukong Line Ltd v Rendsberg Investments Corp [1998] 1 WLR 294, [1998] 4 All ER 82, [1998] 1 Lloyd’s Rep 322, QBD 9.28, 9.30 ...
  • Corporate Management
    • Jamaica
    • Corporate Business Principles. A Guide to the Jamaica Companies Act
    • 18 February 2021
    ...13 11. Vivendi SA and another v Richards and another [2013] EWHC 3006 (CH.). 12. See Yukong v Rendsburg Investments Corporation (No2) [1998] 1 WLR 294; Secretary of State for Trade and Industry v Aviss [2006] EWHC 1846 (Ch.), [2007] BCC 288. 13. See United Kingdom Companies Act 2006 (UK Com......
  • Director's Liability in Bermuda: An Overview
    • United Kingdom
    • Wildy Simmonds & Hill Offshore Commercial Law in Bermuda - 2nd Edition Part II. Establishing offshore vehicles
    • 30 August 2018
    ...to interests of creditors. The case law and commentary refer variously to the 17 Yukong Line Ltd v Rendsberg Investments Corp [1998] 1 WLR 294, 312. 18 A reference to wrongful trading. 19 West Mercia Safetywear Ltd v Dodd [1988] BCLC 250, 252. 20 See Yukong , n 17, above. 202 Offshore Comme......
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