Yukong Line Ltd of Korea v Rendsburg Investments Corporation of Liberia (The Rialto) (Mareva Proceedings)
| Jurisdiction | England & Wales |
| Judgment Date | 23 September 1997 |
| Date | 23 September 1997 |
| Court | Queen's Bench Division (Commercial Court) |
Before Mr Justice Toulson
Queen's Bench Division
Directors - breach of fiduciary duty to company - no direct fiduciary duty to creditor of company
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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