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Director held liable to account for profits made through another company


The defendant was a joint shareholder and co-director of a company. Between 2004 and 2008, he carried on trading in the same business, for his own benefit, through another company which he beneficially owned and controlled. He concealed this from his fellow shareholder/director.

It was held that he had misapplied company property for his own benefit, and was liable to account for profits. This was not limited to the transactions that his co-shareholder/director could prove, but having taken steps to conceal his conduct justice required the account to be taken on the basis that all profits during the relevant period were accountable, subject to any profits that he could show were independently earned.

The claim against the defendant's wife was allowed on the basis of unjust enrichment. It was not necessary to establish that she had notice of the claimant's interest at the time she received company funds. She had received the sum as a pure volunteer and had not raised any defence of change of position that might defeat the claim.


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