A director's breach of duty was proven in court, so why did his employer recover nothing
An employer that proved a director breached his duties still recovered no costs, Deputy High Court Judge Maria Yuen ruled on 7 July 2026.
The decision closed a set of consolidated High Court actions arising from a facilities group's dealings with a family-run equipment supplier. The court had handed down its main judgment on 25 July 2025, finding that the third defendant, a director of the group's cleaning and transportation company and an employee of its facility services company, had breached both his fiduciary duty and his contractual duty.
At the centre of the case was a procurement arrangement. The court found that an administrator of the supplier had dishonestly assisted by manufacturing inflated quotations so that the group would buy machinery from the supplier. The judge found the quotations had been created to look as though they came from independent companies, so that the supplier's price would appear to be the lowest of three competing bids.
The court rejected the two individuals' explanations even against the documentary record. Of their evidence, the judge wrote: "These are serious adverse finding against these witnesses' integrity."
Proving the misconduct did not translate into recovery. The employer could not rescind the purchase order because it had affirmed the deal by affixing its own labels to the machinery. It could not prove loss, having produced no evidence of...
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