Odyssey Entertainment Ltd v Kamp & Ors

The court found that the claimant company (Odyssey) had established that the first defendant, Mr Ralph Kamp, breached his fiduciary and statutory duties to the company. The principal statutory provisions engaged were section 172 and section 175 of the Companies Act 2006 and the employer’s contractual obligations under clause 5 of Mr Kamp’s employment contract. The judge found that Mr Kamp had, from early January 2009, decided to pursue a competing business, misled the board about his intentions, and gave overly pessimistic advice which materially influenced the board’s decision to wind down and ultimately liquidate the company.

• The court held that Mr Kamp concealed and diverted corporate opportunities and developed rival business activities (including Timeless Films Ltd (D2)) while still a director and employee of Odyssey, giving rise to liability for breach of the no‑conflict and no‑profit rules (s.175 CA 2006).
• Timeless Films Ltd was held accountable on an accessory basis for profits derived from assets and opportunities gained through Mr Kamp’s breaches.
• Contractual claims were considered: the court found clause 8 (post‑termination restraint) added nothing material and would not be enforced in these circumstances; the confidentiality claim under clause 9 was not established on a clear basis that justified a significant monetary remedy.

Background and parties: Odyssey was a London‑based film sales, finance and rights management business wound up by members’ resolution and placed in liquidation on 9 September 2009. The principal executive directors were Mr Ralph Kamp (CEO) and Ms Louise Goodsill (COO). The claimant sued Mr Kamp (D1), Timeless Films Limited (D2) (alleged to be formed by and for D1) and Metropolis International Sales Limited (D3) as an accessory.

Nature of the claim and relief sought: The claimant advanced claims at first instance for breach of fiduciary and statutory duties (notably s.172 and s.175 Companies Act 2006), breach of contractual duties in clause 5 (duties of loyalty and to devote full time), breach of post‑contractual restraint (clause 8) and misuse of confidential information (clause 9). Remedies sought included accounts of profits, equitable compensation, declarations and damages arising from the liquidation and loss of prospective profits.

Procedural posture: First instance hearing in the Chancery Division. The trial was conducted as a liability trial with remedies to be determined subsequently. Proceedings against D3 were stayed by consent before trial.

Issues framed by the court:

• Whether Mr Kamp gave overly pessimistic advice and misled the board so as to breach s.172 and his contractual duties;
• Whether he placed himself in a position of conflict or profited from his position in breach of s.175;
• Whether he surreptitiously formed and operated a rival business (D2) and diverted opportunities and staff;
• Whether contractual restraints and confidentiality provisions were enforceable and whether misuse of confidential information occurred;
• Whether Timeless Films Ltd was liable as an accessory and what remedies followed.

Court’s reasoning and findings: The judge accepted contemporaneous documents, board minutes and witness evidence and made key factual findings that by early January 2009 Mr Kamp had decided to pursue his own sales agency and actively worked to establish and nurture that rival business while remaining a director and employee of Odyssey. He gave evidence that he was pessimistic about Odyssey’s prospects and advised winding down; the court found that some budgetary reductions (for example relating to The Nutcracker) were justifiable, but other reductions and the overall pessimistic stance were overly pessimistic and in part motivated by Mr Kamp’s private plans.

The court treated these facts under established equitable principles concerning fiduciary duties and the statutory duties in s.172 and s.175 CA 2006, applying the principles that a director must act in good faith to promote the company’s success, avoid conflicts, and not profit from their position. On that basis the court concluded that Mr Kamp breached his duties by misleading the board, concealing and diverting opportunities and staff, and thereby causing the chain of events that led to the winding down and liquidation. Timeless Films Ltd was held liable on an accessory basis because it benefited from D1’s breaches and was effectively his vehicle.

Remedies and practical outcome: Liability was established against Mr Kamp and accessory liability against Timeless Films Ltd. The judge emphasised that quantification of remedies (accounts, equitable compensation and other relief) would be addressed in a later hearing and cautioned the parties to adopt proportionate procedures for resolving quantum. The judge found the contractual restraint (clause 8) to add nothing material and did not enforce it; the confidentiality claim (clause 9) lacked sufficient clear evidence to justify a substantial monetary remedy.

First instance: The court found for the claimant. The judge held that Mr Ralph Kamp breached his fiduciary and statutory duties (notably s.172 and s.175 Companies Act 2006) by misleading the board, failing to disclose his true intentions, diverting corporate opportunities and developing a rival business while still a director and employee. Timeless Films Ltd was held liable as an accessory to those breaches. The court declined to uphold a substantive post‑termination restraint (clause 8) and found no clear basis for a substantial remedy under clause 9. Liability was established but quantification of remedies (account of profits, equitable compensation, damages) was reserved for a later hearing.