New Judgment – Manolete Partners plc v Freed & Ors [2024] EWHC 2242 (Ch)

After a 4-day trial (including 3 days of cross-examination) the judge, ICC Judge Mullen, variously rejected the defendants’ evidence as “unreliable”, “inherently improbable”, “implausible” and “contradictory” – dismissing the defendants’ substantive defences in their entirety.

In addition, the judge dismissed the defendant’s arguments that their liability should be limited to the shortfall in the administration. In so doing, he rejected the submission that the decision of Zacaroli J in Manolete Partners plc v Hope [2022] EWHC 1801 (Ch) conflicted and/or was inconsistent with the two Court of Appeal decisions of Dawson v Great Northern and City Railway Company [1905] 1 KB 260 and Darlington Borough Council v Wiltshier Northern Ltd [1995] 1 WLR 68. He held that the imposition of such a limit on recovery would discourage the pursuit of claims that the Small Business, Enterprise and Employment Act 2015 was intended to facilitate; and that there is a public interest in wrongdoers being pursued and the standards of corporate governance being upheld (see Re Totalbrand (in liquidation) [2020] EWHC 2917 (Ch), Snowden J). Further, this was not a case of “true circularity” or a “money-go-round” which might, in some cases, warrant such a limitation on recovery (c.f. Re Care Community Limited [2020] EWHC 3360).

William was instructed by HCR Law (Alex Wild and Helen Green).

Read the full judgment here.