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Queens’ Bench Division gives summary judgment in fraud claims


AAH Pharmaceuticals Ltd v Birdi & ors [2011] EWHC 1625 (QB)

On 20 June 2011, Mr Justice Coulson gave summary judgment for the Claimant on a case involving serious allegations of breach of fiduciary duty and dishonesty against an ex-employee.

The First Defendant was a senior employee of the Claimant, who was solely charged with negotiating a deal on its behalf with a third party supplier, under which the Claimant was to receive rebates from the supplier. The First Defendant siphoned off parts of the rebate payments to the Swiss bank accounts of two offshore Panamanian companies which he controlled (also Defendants in the action). A total of over £2 million was misappropriated by the First Defendant.

The Defendants denied claims of breach of fiduciary duty, unjust enrichment, dishonest assistance and knowing receipt. The Judge granted summary judgment on all of those causes of action. In particular, the Judge found that (1) although the claim involved allegations of dishonesty and fraud, in view of the facts it was "patently suitable for a summary judgment application"; and (2) although the First Defendant was not a director of the Claimant, he owed a fiduciary duty to the Claimant in relation to the monies which he had misappropriated.

At the invitation of the Claimant, the Judge declined to give summary judgment on a further claim of conspiracy. He concluded that, whilst under the criminal law of conspiracy an individual could not conspire with his ‘one-man' company, it was uncertain whether this was also the case under the civil law of conspiracy. However, in view of the conclusions reached in relation to the other causes of action, it was not necessary to decide this point.

The judgment is here.

Harry Matovu QC and Sarah Abram appeared on behalf of the successful Claimant. Simon Salzedo QC also successfully appeared on behalf of the Claimant at an earlier stage of the proceedings, seeking and obtaining freezing injunctions and various other measures against the Defendants.  Fionn Pilbrow also successfully appeared on behalf of the Claimant at an earlier stage of the proceedings, seeking and obtaining other peremptory orders against the First Defendant and against third parties holding relevant documents.