Claims for breaches of fiduciary duties discontinued after summary judgment application

17/11/22

Invenio Business Solutions Ltd and Another v Goyal and Goyal (Chancery Division)

The First Claimant is a company that specialises in providing “SAP” software solutions. The Second Claimant is a holding company which owns the First Claimant. The First Defendant was a director and the Chief Financial Officer of both Claimants.

The Claimants alleged that the First Defendant committed various breaches of fiduciary duties in his role as director, and claimed damages in the amount of c. £2.5m. Those alleged breaches included what the Claimants described in their Particulars of Claim as two “unexplained payments” made or authorised by the First Defendant in the sum of c. £1m.

The First Defendant’s defence was that those were not “payments” at all, but rather accounting entries made on the advice of the Claimants’ auditors. That explanation was belatedly accepted in the Claimants’ Reply.

Ahead of the first Costs and Case Management Conference (CCMC), the Defendants brought a strike out/summary judgment application in respect of the alleged “unexplained payment” claims. The Claimants discontinued those claims on the eve of the CCMC.

At the CCMC on 7 November 2022, the Defendants sought an order for the costs of their application. The Claimants resisted on the basis that the application was unnecessary and/or premature. The Chancery Division (Deputy Master Jefferis) awarded the Defendants 95% of the costs of their application upon a summary assessment.