“36. Mr Dinwoodie regarded Mr Fisher as his business partner. In my judgment, Mr Fisher did likewise.”
“42. I also accept that Mr Dinwoodie believed he was a 50% shareholder in BEM and BME and that this was also Mr Fisher’s understanding, belief and intention.”
“49. It is clear, in my judgment, that the pre-corporate business then continued through the medium of the consultancy companies. The significant background to this was that it is plain, in my judgment, that Mr Fisher and Mr Dinwoodie were in business together (a business which they referred to either as Project X or as The Business) from before the use of BEM (they offered and provided business consultancy services to a Mr Mason in 2008, they made the offer in respect of the equity in Vernalis, and were also involved in other projects such as Olive), and Mr Fisher’s repeated denial that they were rang hollow.”
“53. As to the original DA companies, it seems to me that the position is equally clear and to similar effect.”
“55… after the Tomlin Order the position was that BME had 100% beneficial ownership of the [DA companies], and Mr Fisher and Mr Dinwoodie owned half each in turn.”
“I think we agreed the following yesterday: [Various matters concerning the business of the DA companies and funding] I am still holding the sole share in [AML and QTV] but we are still agreed that we share equally in DA equity/shareholding until we discuss and agree otherwise. Have I got this right?”
“Broadly agreed (we have subsequently discussed on afternoon of 13/12). Let me know if you are available this afternoon for a chat.” [Various matters concerning the business of the DA companies and funding] Have I got this right?”
“… that was perhaps never a true one in the first place. Partnership is a very loaded word, just like ‘investment’ and ‘equity’. Multiple meanings and subtleties. Massive scope for misunderstanding.”
“This leaves those duties which are special to fiduciaries and which attract those remedies which are peculiar to the equitable jurisdiction and are primarily restitutionary or restorative rather than compensatory. A fiduciary is someone who has undertaken to act for or on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence. The distinguishing obligation of a fiduciary is the obligation of loyalty. The principal is entitled to the single-minded loyalty of his fiduciary. This core liability has several facets. A fiduciary must act in good faith; he must not make a profit out of his trust; he must not place himself in a position where his duty and his interest may conflict; he may not act for his own benefit or the benefit of a third person without the informed consent of his principal. This is not intended to be an exhaustive list, but it is sufficient to indicate the nature of fiduciary obligations. They are the defining characteristics of the fiduciary. As Dr. Finn pointed out in his classic work Fiduciary Obligations (1977), p. 2, he is not subject to fiduciary obligations because he is a fiduciary; it is because he is subject to them that he is a fiduciary.”
“1. The story is all too familiar. Two friends go into business together. The business founders, their friendship falls apart and they end up in a dispute on opposite sides of a courtroom.”
“131. [Fiduciary duties] is the third alternative way in which Mr Mimran seeks to establish that he had a proprietary interest in the money he advanced to Westland [the joint venture company]. The proposition is that Mr Russo had undertaken to act in Mr Mimran’s interests with regard to the application of the money advanced; that Mr Russo was in a position to deal with the money in a way which could or would affect Mr Mimran’s interests; that Mr Mimran was vulnerable to an abuse by Mr Russo of the position he occupied with regard to dealing with the money so advanced; and that Mr Mimran had not agreed to Mr Russo applying the money merely in his own interests. It is said that these ingredients combined to result in Mr Russo becoming a fiduciary for Mr Mimran with regard to the money the latter advanced to Westland, so giving Mr Mimran a right to trace the money when it was misapplied by Mr Russo in breach of his fiduciary obligations.” 132 I do not accept that Mr Russo became such a fiduciary. The argument ignores that the Russo/Mimran venture was one they agreed was to be conducted through Westland. When Mr Mimran made his loans, the money so advanced became (as he intended) Westland’s money: it ceased to be his own money. Mr Russo was not a director of Westland, but I find that he gave the instructions as to the dealings with Westland’s money, and I accept that he owed fiduciary duties with regard to such dealings. But any such duties would have been owed only to Westland, not to Mr Mimran, since the dealings related to Westland’s money, not to Mr Mimran’s. It may be that the Westland venture can be characterised as a joint venture between Mr Russo and Mr Mimran personally. But I do not consider that this entitles Mr Mimran to say that, with regard to the Westland money, Mr Russo owed separate fiduciary duties to him as well. They chose to conduct their venture through a company, and it is simply to the company that each would have owed fiduciary duties. Nor can I seeany reason why the duties should need to be regarded as being owed more widely than that. If Mr Russo breached his duties to Westland and misapplied its money, it would be open to Mr Mimran – if necessary, by a derivative action - to bring proceedings for Westland’s benefit against Mr Russo I do not, therefore, accept this third alternative way of putting Mr Mimran’s case.”
“125. Power of court to rectify register (1) If— (a) the name of any person is, without sufficient cause, entered in or omitted from a company's register of members, or (b) default is made or unnecessary delay takes place in entering on the register the fact of any person having ceased to be a member, the person aggrieved, or any member of the company, or the company, may apply to the court for rectification of the register. (2) The court may either refuse the application or may order rectification of the register and payment by the company of any damages sustained by any party aggrieved. (3) On such an application the court may decide any question relating to the title of a person who is a party to the application to have his name entered in or omitted from the register, whether the question arises between members or alleged members, or between members or alleged members on the one hand and the company on the other hand, and generally may decide any question necessary or expedient to be decided for rectification of the register.”
“75. I recognise that joint venturers may or may not have a relationship in which one of them owes fiduciary duties to the other. The question, to my mind, is whether the circumstances of their relationship justify the imposition of such duties, and in answering that question it is often helpful to consider whether, to adopt the words of Millett LJ in Bristol and West Building Society v Mothew[1998] Ch 1 at 18, one joint venturer has undertaken to act for or on behalf of the other in a particular matter or circumstances which have given rise to a relationship of trust and confidence. It may also be helpful to ask whether one joint venturer is in a relationship with the other which has given rise to a legitimate expectation, which equity will recognise, that he will not use his position in such a way which is adverse to the interests of the other: see, for example, Arklow Investments Ltd v Maclean[2000] 1 WLR 594 at 598. Whether a joint venture relationship carries obligations of a fiduciary nature is therefore highly fact-sensitive: see, for example, Ross River Ltd and anor. v Waverley Commercial Ltd and ors.[2013] EWCA Civ 910 at [30] to [64].”
“77. The basis of this aspect of the claim is not simply the fact that Mr Miller and Mr Farrar were shareholders in Saxon or Artillery; nor simply the fact that Mr Miller was a director of Artillery. It is that the parties had been in business together as property developers for very many years and it was in that context that Mr Miller was entrusted with the corporate aspects of the parties’ joint ventures and was specifically given or assumed the responsibility of transferring Long Stratton from Saxon to Artillery and then from Artillery to the Joint Venture entity. It was only as a result of that relationship of trust that Mr Miller was able to transfer Long Stratton out of Artillery to Edged Red, the means by which he thereafter denied Mr Farrar any interest in Long Stratton or its traceable proceeds. I appreciate that these allegations are heavily contested by Mr Miller but Mr Sibbel submits and I agree that, if made good at trial, it is arguable that they did indeed give rise to the fiduciary relationship for which Mr Farrar contends.”
“78. First, while it is unusual for there to be fiduciary duties in a commercial context, such duties can sometimes arise on the facts. 79. Secondly, the court must undertake a fact-sensitive enquiry in order to ascertain whether, objectively, fiduciary duties arose in the particular context.”
"84. In my judgement, the existence of fiduciary duties is made out on the evidence, and I accept Mr Sibbel's submissions, which I summarise below."
"91. In my judgment, this encapsulates a situation where there was a legitimate expectation, on both sides, that one would not use his position in such a way which was adverse to the other. 92. It is because of the close personal relationship between them (which in my view Mr Fisher wrongly attempted to play down in his evidence) that first this should not, as Mr Sibbel submits, be regarded as primarily a commercial venture, and secondly, that the parties did not record their agreements in any formal document. It was clear on the evidence that each trusted the other."
"100. I therefore conclude that Mr Dinwoodie has established the existence of fiduciary duties. 101. Having made that finding, I have no hesitation in also concluding that Mr Fisher's retention of legal title to the shares in the consultancy companies and the original DA companies was contrary to the parties' agreement and a breach of the fiduciary duty owed by him to Mr Dinwoodie not to act otherwise than in good faith and with loyalty in relation to the shareholding of the company."
"55. It follows, in my judgment, that after the Tomlin Order the position was that BME had 100% beneficial ownership of the original DA companies, and Mr Fisher and Mr Dinwoodie owned half each in turn. This was accepted by Mr Fisher in a Skype message of13 December 2013 , in which he said, "
“there is a constructive trust here, an argument which based on Pallant v Morgan[1953] Ch 43 ”
“105. As is pointed out in Snell’s Equity at 24-039, a Pallant v Morgan equity typically relates to specific property that is not at first owned by either of the parties, A and B, but where A and B form a common intention that A will take steps to acquire the property, and does so, then B will obtain some interest in it.”
“As Millett LJ explained in Paragon Finance, a constructive trust arises by operation of law whenever the circumstances are such that it would be unconscionable for the owner of a property to assert his own beneficial interest in the property and deny the beneficial interest of another. Where a party, though not expressly appointed as a trustee, has lawfully assumed the duties of a trustee and in that capacity has received trust property but later appropriates that property to his own use then he will be acting in breach of trust. Pallant v Morgan may be understood as an example of such a constructive trust. In this and in other such cases the claimant does not impugn the transaction by which the defendant obtained control of the property; he contends that the circumstances in which the defendant obtained that control make it unconscionable for him to treat the property as his own.”
“108. It seems to me, with respect, that this misses the very clear point expressed in Farrar that there is nothing in Cobbe which lays down a different rule (that the Pallant v Morgan equity can only arise where there is a prospective purchase).” 109. Whilst it is right that on the facts of Farrar Kitchin LJ went on to hold that a Pallant v Morgan equity arose on the more conventional basis that the joint venture agreement preceded the relevant acquisition of the property by the joint venture entity, it seems to me that where appropriate, in particular where it would be unconscionable for the owner to assert his own beneficial interest and deny that of the non-owner, and where the owner has assumed the duties of a trustee, equity should impose a trust. 110. So it is, in my judgment, here, because of the fiduciary duties owed (see also Farrar at [32], when considering the decision in Crossco No 4 Unlimited v Jolan Ltd[2012] All ER 754 : “many of the cases giving rise to a Pallant v Morgan style equity will have at their heart a fiduciary relationship”), and because of the parties’ mutual understanding that the shares would be owned equally.”
“8. The Defendant is prohibited, until further order of the Court, from taking the following steps without the consent of the Claimant: … (2) competing with the business of AML, QTV, BME or BEM. whether such steps are taken by the Defendant directly or indirectly, by himself or through his agents, trustees, employees or nominees, or otherwise.”
“12. Mr Butler and Mr Alford submit:” (1) I made no finding in my judgment about competing – I said nothing about whether there was a fiduciary duty not to compete, nor that Mr Fisher has competed. (2) The proposed order is a clear restraint of trade, and such a wide restriction – had it been the subject of agreement – would have been unenforceable. (3) The extent of Mr Fisher’s duties in this regard are no more than those set out insection 170(2) of the Companies Act 2006 , which provides that a person ceasing to be a director continues to be subject to the statutory duties to avoid conflicts of interest and not to accept benefits from third parties. Since the proposed order goes beyond what the companies themselves would be entitled to, it would be anomalous to grant an injunction in favour of Mr Dinwoodie as sought. (4) In any event, Mr Dinwoodie has no legitimate interest to protect, and he should not be able to prevent Mr Fisher from undertaking such commercial activities as he wishes. (5) The proposed order is without limit in terms of time or geographical area – it is too wide. (6) The proposed order is grossly unfair – why should Mr Fisher be so restrained when Mr Dinwoodie is free to do as he chooses – and wrong in principle. There should be no restraint on Mr Fisher for an uncertain period. (7) The word “compete” is too vague. “14. Dealing with the points made by Mr Butler and Mr Alford in turn: (1) I agree with Mr Sibbel that events post-November 2017 – see paragraph 69 of my judgment – show that Mr Fisher has carried on a business through corporate vehicles under his control which has appropriated the assets, goodwill, trademarks and clients of AML and QTV. That is plainly competition with the joint venture. (2) Mr Fisher is not an ex-employee or former director but a current member of a joint venture who continues to owe fiduciary duties to Mr Dinwoodie. I agree with Mr Sibbel on this point. This is not a restraint of trade. (3) Again, in my view Mr Sibbel is right. The question of the relief the companies might obtain is not relevant. (4) Mr Dinwoodie’s interest is as a person to whom Mr Fisher owes fiduciary duties. (5) Mr Butler and Mr Alford refer to an offer made by Mr Dinwoodie on September 2020 which would have left the parties as 50/50 owners of the joint venture. That offer included an undertaking to be given in the same terms as those in paragraph 8(2) of the draft order. There was also, in the same letter, an offer of global settlement under which Mr Dinwoodie would purchase all of Mr Fisher’s interest in the DA companies, on condition that Mr Fisher agreed to non-solicitation, non-competition and non-dealing covenants. Mr Butler and Mr Alford say, about this offer, that when Mr Fisher raised the difficulty of the non-competition provisions, Mr Dinwoodie produced “a lengthy list of more specific anti-competition undertakings running to over a page and – notably – limited to a particular geographical area (the UK) and a 12-month period.”
“If a partner, without the consent of the other partners, carries on any business of the same nature as and competing with that of the firm, he must account for and pay over to the firm all profits made by him in that business.”
“If a partner, without the consent of the other partners, carries on any business of the same nature as and competing with that of the firm, he must account for and pay over to the firm all profits made by him in that business.”
“The fundamental purpose of the injunctive relief [is] to prevent [Mr Fisher] from engaging in further breaches of this nature. The effect of such relief may be to compel [Mr Fisher], if he wishes to continue to be involved in the joint venture businesses, to take whatever steps are within his power to restore those businesses (including their assets, customer relationships, trade marks and income streams) to the original companies.”
“There is more than one category of fiduciary relationship, and the different categories possess different characteristics and attract different kinds of fiduciary obligation. The most important of these is the relationship of trust and confidence, which arises whenever one party undertakes to act in the interests of another or places himself in a position where he is obliged to act in the interests of another. The relationship between employer and employee is of this character. The core obligation of a fiduciary of this kind is the obligation of loyalty. The employer is entitled to the single-minded loyalty of his employee. The employee must act in good faith; he must not make a profit out of his trust; he must not place himself in a position where his duty and his interest may conflict; he may not act for his own benefit or the benefit of a third party without the informed consent of his employer.”
“You have today, for me, ruled out any possibility of our working together in 2018, so I am also curtailing all extant arrangements between us with immediate effect. I see no benefit of purpose in waiting until 31/12/17.”