News and Insights

Case briefing: CMC Holdings re Martin Henry Foster and Ors

Facts

In 2011 CMC first got an inkling one of its directors had been receiving secret commissions since 1977. Papers were disclosed in July 2013 and proceedings served in June 2016. The director said the case was time barred as CMC had known enough to begin proceedings more than three years before it did so and the events took place more than 21 years before the TJL Art 57 (3C) long stop liability limit of 21 years.

Decision

Claims against a dishonest fiduciary (e.g. a company director) for dishonest breach of fiduciary duty fall under TJL Art 57(1) which says claims in fraud or to recover trust property are never time barred, so the 21 year long stop does not apply being relevant only to some lesser failing.

Principle

Directors who behave dishonestly or fraudulently need to understand they will never be off the hook.