Solitair Ltd v Nambiar & Anor

A company may pursue a resigning director for breaches of fiduciary duty without first undertaking a general investigation or account of sums that may be due to the director. Post-termination liability may arise from the wrongful exploitation of company property, information or opportunities, and from profits deriving from pre-termination breaches.

For contempt by breach of an injunction, the claimant must prove intentional or deliberate conduct and knowledge of the facts constituting the breach. It need not prove that the alleged contemnor knew the conduct was prohibited or intended to interfere with the administration of justice.

Solitair Limited claimed against its former director, Mr Anish Nambiar, and his company, Go Singles Limited, for breaches of fiduciary duty and misuse of confidential information. The claims concerned diversion of a hotel opportunity, use of customer databases, withdrawals from Solitair’s bank account and appropriation of a domain name.

Solitair also sought Mr Nambiar’s committal for breach of an interim injunction restricting use of its customer database. The court determined the substantive claims and the committal application at trial.

1. Substantive claim. The claimant substantially succeeded. Mr Nambiar had diverted the Olympos Hotel opportunity, misused Solitair’s confidential customer database, misappropriated certain funds and appropriated the gosingles.co.uk domain name. Go Singles was jointly liable for the breaches involving its conduct. Judgment was entered for £85,651.50, with injunctive and other orders.
2. Fiduciary duties. Directors’ statutory duties under the Companies Act 2006, including the duties to promote the company’s success, avoid conflicts, not accept third-party benefits and declare interests, generally end on resignation. That does not prevent liability for wrongful post-termination exploitation of company property, information or opportunities, or for profits earned after termination which derive from earlier breaches.
3. A company may claim against a resigning director without undertaking a general accounting exercise. Any defence based on authorisation, repayment, dividends or sums owed to the director must be raised by the director, ordinarily by defence or counterclaim.
4. Where the fiduciary remedy is an account of profits, recovery does not depend on proving loss according to ordinary common-law damages principles. There must be a sufficient connection between the breach and the profit. Allowable costs fall to be identified and proved by the defaulting fiduciary.
5. The customer database was confidential information. The evidence justified a permanent injunction against its misuse and an order for deletion of copies. A wider injunction concerning pricing, costs, profits and supplier arrangements was refused because specific misuse had not been proved. A post-judgment, on-notice inspection order was also refused.
6. Committal. Applying Marketmaker Technology (Beijing) Co Ltd v CMC Group Plc, Stancomb v Trowbridge Urban District Council and Varma v Atkinson, contempt required intentional or deliberate conduct and knowledge of the facts making the conduct a breach. Knowledge that the conduct breached the order, or a positive intention to interfere with the administration of justice, was unnecessary. Mr Nambiar was proved beyond reasonable doubt to have caused one prohibited email mailshot on 19 December 2019. Other alleged breaches were not proved.
7. Sentence was adjourned. The court provisionally considered that the breach crossed the custodial threshold, subject to mitigation and further evidence.

The judgment describes earlier procedural steps but is a first-instance decision.

• London Circuit Commercial Court: an interim injunction was granted on 27 November 2019 and the proceedings were transferred to Manchester.
• High Court (Commercial Court): applications to strike out the defence and for relief from sanctions were refused in September 2020. The substantive claim and committal application were then tried together.