Solitair Ltd v Nambiar & Anor

The claimant succeeded in establishing that the first defendant, Mr Anish Nambiar, breached fiduciary duties as a director (including duties under the Companies Act 2006 such as s.172, s.175, s.176 and s.177) by diverting a corporate opportunity (the Olympos Hotel), misusing confidential customer information, appropriating company funds and appropriating a domain name. The court treated those breaches as justifying monetary relief, injunctive relief limited to the claimant's customer database and deletion of relevant material, but declined to order a wide inquiry or a broad permanent injunction over unspecified categories of confidential information.

The judge made monetary awards against Mr Nambiar totalling £85,651.50 (broken down at trial as £16,039; £22,512.50; £47,000; and £100), ordered non-monetary relief including a permanent injunction restraining misuse of the claimant's customer database and an order for deletion of documents within the defendants' control, and decided that the claimant had proved a single contempt (a mailshot sent on 19 December 2019) for which the defendant must be sentenced.

The court applied settled principles on directors' duties and post-termination liability for exploitation of company property and opportunities, and applied the established approach to contempt that it is unnecessary to prove the contemnor appreciated that conduct amounted to a breach of the order.

Background and parties:

• The claimant, Solitair Limited, is an on-line travel agency specialising in holidays for single travellers. The first defendant, Mr Anish Nambiar, was a co-owner, director and co-operator of the business until his resignation in April 2019. The second defendant is Go Singles Limited, a company formed and controlled by Mr Nambiar which trades as Go Singles.
• Following a relationship breakdown between Mr Nambiar and his former co-director Ms Sian Jones, Mr Nambiar resigned and is alleged to have taken steps to divert Solitair's business: including taking control of the Olympos Hotel opportunity, using Solitair's customer database and Mailchimp access, withdrawing company funds, orchestrating employee resignations/assistance and re-registering the domain name "gosingles.co.uk" for his new business.

Nature of the proceedings and relief sought:

• The claimant sued for breach of fiduciary duty and related equitable remedies, seeking relief confined at trial to four heads: (1) misappropriation of the Olympos Hotel opportunity; (2) misuse of confidential information (specifically the customer database); (3) misappropriation of company funds; and (4) appropriation of the domain name.
• Separately, the claimant brought a committal application for contempt for breach of an interim injunction; this was ultimately pursued only in respect of alleged use of the claimant's customer database to send marketing mailshots, and in closing was limited to a single mailshot of 19 December 2019 addressed to one identified customer (with an inference sought of wider bulk emailing).

Issues for determination:

• Whether Mr Nambiar breached fiduciary duties as director and whether GSL was jointly liable by imputation of his knowledge and conduct.
• Whether the Olympos Hotel lease/opportunity belonged to the company and had been diverted.
• Whether Solitair's customer database was confidential and had been copied and used by the defendants via Mailchimp.
• Whether specified withdrawals from Solitair's bank account were misappropriated.
• Whether the domain name was company property and, if so, the appropriate remedy.
• Whether the interim injunction had been breached and, if so, whether committal is justified for contempt.

Court reasoning and findings:

• The judge found pervasive planning and co-ordinated conduct by Mr Nambiar culminating in his resignation and the diversion of opportunities and use of inside information, supported by contemporaneous emails, employee messages and other documents. The defendants' repeated failure to make disclosure weakened their position.
• Olympos Hotel: the court concluded the lease was intended for Solitair (earlier drafts named Solitair) and that Mr Nambiar diverted the opportunity to himself without informed consent; rather than ordering an account or trust relief, the claimant elected equitable compensation and the judge assessed this head at £16,039 against Mr Nambiar.
• ePDQ/refunds and diverted payments: the judge accepted that on multiple occasions customers were refunded and then paid Mr Nambiar's Turkish company; on the evidence the court assessed recoverable sums at £22,512.50 on the identified items and awarded that sum against Mr Nambiar.
• Company funds: unauthorised withdrawals of £42,000 and £5,000 on 4–5 April 2019 were found to be unlawful and repayable; other claimed withdrawals were not proved. The court awarded £47,000 on this head.
• Domain name: the judge found the domain had been acquired and paid for for Solitair's benefit and that Mr Nambiar later appropriated it; the court exercised a remedial discretion and fixed a pragmatic value of £100, ordering transfer to the claimant if not purchased for that sum.
• Confidential information and injunctions: the customer database was held to be confidential and to have been misused; a permanent injunction was granted in similar terms to the interim injunctive protection for the customer database and an order for deletion of copies was made, but a broad permanent injunction over unspecific categories of confidential information was refused as unjustified.
• Committal: applying the criminal standard, the judge found beyond reasonable doubt that Mr Nambiar caused a mailshot to be sent on 19 December 2019 to a Solitair customer (Ms Wiseman) using data obtained from the claimant's database and that this breached the interim injunction; the court found one proven contempt and indicated a provisional custodial sentence (two months) which could be suspended, reserving final sentence to allow mitigation evidence.

Procedural and other observations:

• The defendants repeatedly failed to comply with disclosure directions and changed legal representation; the claimant obtained an interim injunction in November 2019 which restrained use of the Olympos Hotel database and other confidential information pending trial. The committal application was limited and tried alongside the substantive trial.

The claim succeeded in part. The court found that Mr Nambiar breached fiduciary duties and used GSL to further some of those breaches. The court awarded monetary relief totalling £85,651.50 against Mr Nambiar, granted a permanent injunction restraining misuse of the claimant's customer database and ordered deletion of copies, made a conditional order concerning the domain name (transfer on payment of £100 or re-transfer to the claimant), and found Mr Nambiar guilty of one contempt (mailshot of 19 December 2019) for which he must be sentenced (judge indicated a provisional custodial term of two months, capable of suspension, subject to mitigation at sentencing).