Hipgnosis Music Limited v Merck Mercuriadis & Ors

A former director remains subject to the statutory continuing duty in Companies Act 2006 s 170(2)(a) concerning property, information or opportunities known to him as director. But a general business idea known before the directorship is not thereby converted into a corporate opportunity. The relevant opportunity must have come to the fiduciary through the role, ordinarily involve non-public knowledge, and be procured through the principal’s efforts or assets. Restoration of a dissolved company does not, by itself, deem former directors to have remained in office. A non-fiduciary accessory is subject to ordinary causation principles and the court retains discretion over an account of profits. Claims based on diversion of a general music-catalogues investment concept and dishonest assistance were therefore dismissed.

HML and Copyrights alleged that Mr Mercuriadis, formerly a director, diverted to HSFL1 and later HSFL2 a business opportunity involving investment in music publishing catalogues. HML and Copyrights had pursued the idea through a proposed bond issue, but the venture stalled, HML was wound up and Copyrights was dissolved. Copyrights was later restored and assigned its claims to HML.

The claims sought accounts of profits against Mr Mercuriadis and against HSFL2 and HSML for dishonest assistance. The central issues were whether the catalogue-investment idea was a corporate or maturing business opportunity; whether restoration under s 1032 of the Companies Act 2006 revived Mr Mercuriadis’s directorship; and whether the defendants were liable to account.

1. Claims dismissed. The claims against Mr Mercuriadis, HSFL2 and HSML were dismissed. The court found that Mr Mercuriadis had not dishonestly diverted a corporate opportunity and was not in breach of the relevant duties on the facts.
2. Continuing duty. Under ss 170(2)(a) and 175 of the Companies Act 2006, a former director remains subject to the duty concerning exploitation of property, information or an opportunity of which he became aware while a director. The duty may apply to post-resignation conduct and does not require an earlier pre-resignation breach where the later exploitation itself is objectionable.
3. Corporate opportunity. The general idea that music publishing catalogues might be undervalued was known to Mr Mercuriadis before he became a director. It was an insight or concept, not an opportunity which came to him through his fiduciary role. The business plan, funding arrangements, consultants, branding, professional advice and proposed bond prospectus were mechanisms for exploiting the idea, rather than the opportunity itself. His general industry experience, contacts and knowledge of fundraising were also part of his general fund of knowledge.
4. Restoration. Section 1032 does not, by itself, deem former directors to have remained in office during a company’s dissolution. Any counterfactual question about the company’s officers or interests must be decided on the evidence. Copyrights’ restoration was nevertheless sufficient in principle to engage s 170(2)(a), but the pleaded case did not establish that Mr Mercuriadis would have remained a director after dissolution.
5. Accessory liability. Dishonest assistance requires breach of fiduciary duty, assistance and dishonesty. The first requirement failed. The court also rejected dishonesty. HSFL2’s independent board retained decision-making authority, so Mr Mercuriadis was not its shadow director and his knowledge was not attributable to it. Had liability otherwise been established, HSML’s execution of the Investment Advisory Agreement would have been sufficient to attribute his knowledge to HSML.
6. Accounts. For a fiduciary, causation asks whether the profit owed its existence to a significant extent to the use of property, information or an advantage obtained through the fiduciary position. For a non-fiduciary dishonest assistant, ordinary causation, remoteness and proportionality principles apply. Even if HSFL2 had assisted dishonestly, the catalogue idea would have been only the occasion for profits generated by investors, board decisions and market conditions; an account would also have been disproportionate.

First-instance decision. The judgment records an earlier interlocutory decision refusing amendment: [2026] EWHC 82 (Ch) . No appeal was brought against that decision.