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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Barclay-Watt & Ors v Alpha Panareti Public Ltd & Anor [2022] EWCA Civ 1169 (19 August 2022) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2022/1169.html Cite as: [2022] EWCA Civ 1169, [2023] 1 BCLC 240, [2023] 1 All ER (Comm) 401, [2022] BCC 1313 |
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ON APPEAL FROM HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Sir Michael Burton GBE (sitting as a Judge of the High Court)
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE PHILLIPS
and
LADY JUSTICE ANDREWS
____________________
ANDREW JAMES BARCLAY-WATT & Others |
Claimants/ Respondents and Cross-Appellants |
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- and - |
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1) ALPHA PANARETI PUBLIC LIMITED 2) ANDREAS IOANNOU |
Defendants/ Appellants and Cross-Respondents |
____________________
Stephen Nathan QC and Nicholas Yell (instructed by GSC Solicitors LLP) for the Claimants/Respondents
Hearing dates: 26 & 27 July 2022
____________________
Crown Copyright ©
Lord Justice Males:
The facts
"It is clear to me, having heard the evidence from the Claimants that they were indeed daunted [i.e. by the proposed investment in a property in Cyprus], and that their concerns were set to rest by the salesmen, who were only selling to them the Defendants' properties. The fact that some of them may also have previously given other advice to the Claimants in respect of mortgages and pensions was only the springboard to the hard sell of the Cyprus properties, in accordance with their training by APP and with the DVDs and brochures, armed with which they were not simply canvassers, as the Defendants suggest."
"… if you do not wish to purchase a property outright, an Alpha Panareti Housing Loan is available at an interest rate of approximately 2.75%. This is possible by denominating the mortgage in Swiss francs (CHF), a practice becoming more popular in the UK. Switzerland is a low inflation economy and a haven for foreign currency."
"Mortgages are managed in Swiss francs by Alpha Bank. … The Swiss franc is used because it is exceptionally stable by comparison with other currency, allowing a low interest rate."
"34. The Defendants plainly set out to induce and purportedly advise potential customers in their homes, in accordance with the training (attended also by representatives of the Bank) given to the agents and sub-agents; and the exclusive Alpha Panareti Mortgage Scheme was an integral part of that package."
"In this case, the Bank granted mortgage loans in … Swiss francs, i.e. in a currency other than the currency of the country where consumers, mostly residents of Cyprus or the UK, receive their income. Loans in foreign currency involve risks stemming both from the fluctuations of the exchange rates between two currencies [and] the interest rate fluctuations. These risks may result in a significant financial charge on the borrower, due to the increased payable instalments and unexpired loan capital. This is particularly true for mortgage loans that have long repayment periods. Thus, it is significantly affecting the ability to repay the loan and thus the economic data relied upon by the consumer to decide on whether to conclude a loan agreement and under what conditions. Furthermore, the average consumer does not have the necessary technical, specialised knowledge of foreign exchange and interest rate risk assessment."
The claimants' claims
The appeal – liability of APP
(1) The judge was wrong to regard the salesmen who persuaded the claimants to buy properties as agents of APP in making the representations which they made. Rather, the purpose of the arrangements between APP and the salesmen was for the salesmen to make their client lists available to APP; the salesmen owed no fiduciary duties to APP, and had only an execution-only function.
(2) Even if they were agents of APP, the salesmen had no authority to sell the Bank's loan product as if it were APP's own product; it was the Bank's product and it was the Bank, not APP, which had provided training to the salesmen about it.
(3) The judge's conclusion that the currency risk of a loan in Swiss francs was obvious was unsupported by any evidence and was at least subconsciously influenced by the hindsight experience of the global recession caused by the 2008 financial crisis; accordingly the judge was wrong to hold that APP owed a duty to warn the claimants about this risk.
(4) The judge was wrong to place heavy reliance on the contents of the Central Bank circular because there was no evidence that its contents were communicated either to APP or to individual salesmen.
Analysis
"14. The combination of the above features is entirely sufficient to persuade me that the agents and sub-agents had authority to make the representations which they then made by handing over the DVDs and brochures and making statements as to buy to let and rentals and the special mortgage arrangements, in accordance with their training …"
"37. The question for me is whether the Claimants from 2005 onwards should have been so advised by the Defendants, even without the impact of the advice by the Central Bank of Cyprus, given the following: –
i) The information about the mortgage as an integral part of the package was being given to the potential customers, as the Defendants well knew, by those who would be trusted by the Claimants, many of them former or actual financial advisers, to give recommendations and advice. The Defendants in their Defence at paragraph 11.8 accept that they 'understood that the third-parties engaged by ROPUK and/or UVR to introduce prospective purchasers were usually independent financial advisers who had long-standing and close relationships with their own clients, which they had built up over many years and who were able to offer their clients a range of different products for investment purposes.'
ii) In that same subparagraph of their Defence they deny that these salesmen were their agents or sub-agents, but I have already concluded in all the overwhelming circumstances that they were their agents and had actual or apparent authority to deliver, explain and expand upon the package they were selling on the Defendants' behalf. The package was the result of the unusual and specific training given by the Defendants to the salesmen, which had included involvement by representatives of the Bank, and the advantages of the exclusive mortgage were right in the very forefront of the delivered package, which the salesmen, and not the Claimants, were in a position to understand. To advise on the benefits carried with it the duty (and authority) to advise on the detriments and risks.
iii) The central aspect of the package was that the loan was to be in Swiss francs, sold as an advantage, when it was in fact an obvious risk, not needing the Central Bank letter to point it out, to be considered and assessed by anyone delivering their sales talk to ordinary consumers, wholly inexperienced in finance.
iv) The duty of care of the Defendants was the clearer when they were training the salesmen and arming them with the DVDs and brochures. Even if the currency risk had not been obvious, it required to be carefully researched before it could be sold as a positive advantage and as a central part of the deal. The low cost mortgages, financed by the (sterling or Cyprus pound) rent receipts, were a fundamental part of the Masterplan."
The Respondents' Notice – lettability
"89. Thus, in my judgment, if a claimant asserted two claims against the appellant of which one was successful and the other was dismissed (whether or not so stated in the resulting order) and the defendant appeals against the judgment on the first claim, then if the respondent wishes to argue that the court below was wrong to dismiss its other claim against the appellant and that the order below should be upheld on that basis, that assertion amounts to an appeal against the order, and is not within the category of seeking to contend that the order of the court below should be upheld for reasons other than those given by that court, even if the relief sought would be the same on either claim. Such a respondent falls within paragraph 8(1) of PD52C, not within paragraph 8(3), and therefore requires permission to appeal."
The claimants' cross appeal – personal liability of Mr Ioannou
The judgment
"58. This is put by the Claimants in two ways, first he is said to have owed a personal duty to the Claimants, and secondly he was a joint tortfeasor. As to the latter, I consider that this can only amount to a case that he was a joint tortfeasor with the First Defendant APP, as I have not been tasked to find, and do not find, that the agents and sub-agents such as Messrs. Pollard, Shaw and Heath, Mrs Welsby, and all the others were liable in negligence to the Claimants. But, even then, I would need to be satisfied that he was a joint tortfeasor personally as opposed to APP, so the question is the same.
59. Mr Ioannou is said to be personally liable to the Claimants all because he was a Svengali, because the marketing scheme was his masterplan or brainchild, and he was its hub, that he micromanaged at least UVR if not ROPUK, that he approved the content of the brochures and DVDs, and that he has been the only witness for the Defendants, and no other witnesses have been called, although others have featured on behalf of APP, not just Ms Nurse, and his sister and father, but Ms Skordi, Ms Ireland and Ms Birkin. It was not put to him that APP is or was a one-man company and indeed in the light of at least those individuals it would seem it plainly was not, although that of itself would not be enough. No board minutes or articles of association were produced, though I do not know if discovery of them was sought.
60. The question is whether he has become liable as well as the company of which he is managing director. This is not a case of a joint tortfeasor ancillary to another independent party, such as in Fish & Fish Ltd v Sea Shepherd UK [2015] UKSC 10. I have been referred to the following authorities: Williams v Natural Life Health Foods Ltd [1998] 1 WLR 890 esp at 835–6, MCA Records Inc v Charly Records Ltd [2001] EWCA Civ 1441 esp at [49]–[53], Koninklijke Philips Electronics NV v Princo Digital Disc GmbH [2003] EWHC 2588 (Pat) esp at [23], Contex Drouzhba v Wiseman [2006] EWHC 2708 (QB) asp at [60] and [97]–[98], Global Crossing Ltd v Global Crossing Ltd [2006) EWHC 2043 (Ch) esp at [44]-[45] and Societa Esplosivi Industriali SpA v Ordnance Technologies (UK) Ltd [2008] 2 AER 622 esp at [103].
61. It is not suggested that the company does not have any independent existence, nor that it is a facade or a sham to cover a personal adventure by Mr Ioannou. It obviously owns substantial property in Cyprus, and there was no cross-examination of Mr Ioannou in relation to the company's accounts. There is no arguable basis for 'piercing the corporate veil'.
62. Even assuming all the matters set out in paragraph 59 above, though I am not convinced that he is a Svengali, I am not at all persuaded that in relation to the one issue which I have found in favour of the Claimants, the negligent failure to give advice to the Claimants in relation to foreign currency risks, nor even if I had found the other misrepresentations as to lettability, drawdown or ease of resale, that he undertook or had personal liability. There was certainly no 'singular feature which would justify belief that [he] was accepting a personal commitment, as opposed to [a] company obligation' nor 'crossing the line which conveyed to the plaintiff that the defendant was assuming personal liability', such as Lord Steyn looked for in Williams at 836E, nor his 'participation or involvement in ways which go beyond the exercise of constitutional control' of APP, referred to by Chadwick LJ in MCA Records at [50]. When these Claimants were induced to contract, it was with APP, and I am satisfied that the existence or role of Mr Ioannou would not have crossed their mind, notwithstanding the wording in their 2020 witness statements. What there has been in my judgment is an understandable attempt by the Claimants, who have suffered loss and distress over a period of more than 10 years, to ensure a solvent defendant. I have no idea whether APP will be sufficiently solvent to meet the claims by the present Claimants or those who form part of the cohort of 280, but there must be a ground for personal liability of Mr Ioannou, and I find none."
The two routes to personal liability
"Whether the principal is a company or a natural person, someone acting on his behalf may incur personal liability in tort as well as imposing vicarious or attributed liability upon his principal. But in order to establish personal liability under the principle of Hedley Byrne, which requires the existence of a special relationship between plaintiff and tortfeasor, it is not sufficient that there should have been a special relationship with the principal. There must have been an assumption of responsibility such as to create a special relationship with the director or employee himself."
"If reliance is not proved, it is not established that the assumption of personal responsibility had causative effect."
"55. It seems to me that, in order for the defendant to be liable to the claimant in such circumstances, three conditions must be satisfied. First, the defendant must have assisted the commission of an act by the primary tortfeasor; secondly, the assistance must have been pursuant to a common design on the part of the defendant and the primary tortfeasor that the act be committed; and, thirdly, the act must constitute a tort as against the claimant. As Lord Toulson says, this analysis is accurately reflected in the statement of the law in Clerk and Lindsell on Torts, 7th ed, p 59, cited by all members of the Court of Appeal in The Koursk [1924] P 140, 151, 156, 159.
56. Because this type of tortious liability is so fact sensitive and needs to be kept within realistic bounds, there is a danger that further analysis of these three requirements will serve to confuse. Bankes LJ made that point in The Koursk at p 151, when he said that 'It would be unwise to attempt to define the necessary amount of connection', and that each 'case must depend on its own circumstances'. To the same effect, Mustill LJ in Unilever Plc v Gillette (UK) Ltd [1989] RPC 583, 608, warned against over-analysis of the cases on this topic. The wisdom of those observations is borne out by the subsequent cases on this area of law, which are discussed by Lord Toulson and Lord Sumption. However, it is, I think, worth saying a little about each of the three conditions.
57. So far as the first condition is concerned, the assistance provided by the defendant must be substantial, in the sense of not being de minimis or trivial. However, the defendant should not escape liability simply because his assistance was (i) relatively minor in terms of its contribution to, or influence over, the tortious act when compared with the actions of the primary tortfeasor, or (ii) indirect so far as any consequential damage to the claimant is concerned. Nor does a claimant need to establish that the tort would not have been committed, or even that it would not have been committed in the precise way that it was, without the assistance of the defendant. I agree with Lord Sumption that, once the assistance is shown to be more than trivial, the proper way of reflecting the defendant's relatively unimportant contribution to the tort is through the court's power to apportion liability, and then order contribution, as between the defendant and the primary tortfeasor.
58. As to the second condition, mere assistance by the defendant to the primary tortfeasor, or 'facilitation' of the tortious act, will not do, as explained by Lord Templeman in CBS Songs Ltd v Amstrad Consumer Electronics Plc [1988] AC 1013, 1057B-C, and 1058G-H, and by Hobhouse LJ in Credit Lyonnais Bank Nederland NV v Export Credit Guarantee Department [1998] 1 Lloyd's Rep 19, 46. There must be a common design between the defendant and the primary tortfeasor that the tortious act, that is the act constituting or giving rise to the tort, be carried out, as suggested in Vestergaard Frandsen A/S v Bestnet Europe Ltd [2013] 1 WLR 1556, para 34.
59. A common design will normally be expressly communicated between the defendant and the other person, but it can be inferred, a point which is clear from Lord Mustill's reference to 'agreed on common action' and 'tacit agreement' in Unilever at p 609. I have some concerns about the notion that the defendant has to "[make the tortious act] his own", as Peter Gibson LJ put it in Sabaf SpA v Meneghetti SpA [2003] RPC 264, para 59. While it can be said that it rightly emphasises the requirement for a common design, this formulation is ultimately circular and risks being interpreted as putting a potentially dangerous gloss on the need for a common design.
60. As to the third condition, it is unnecessary for a claimant to show that the defendant appreciated that the act which he assisted pursuant to a common design constituted, or gave rise to, a tort or that he intended that the claimant be harmed. But the defendant must have assisted in, and been party to a common design to commit, the act that constituted, or gave rise to, the tort. It is not enough for a claimant to show merely that the activity, which the defendant assisted and was the subject of the common design, was carried out tortiously if it could also perfectly well be carried out without committing any tort. However, the claimant need not go so far as to show that the defendant knew that a specific act harming a specific defendant was intended."
The claimants' case
A finding of fact?
The defendant's case
The judge's factual findings
Some basic principles
"The company is at law a different person altogether from the subscribers to the memorandum; and, though it may be that after incorporation the business is precisely the same as it was before, and the same persons are managers, and the same and receive the profits, the company is not in law the agent of the subscribers or trustee for them. Nor are the subscribers as members liable, in any shape or form, except to the extent and in the manner provided by the Act. That is, I think, the declared intention of the enactment."
"By means of a private company, as Mr Palmer observes, a trade can be carried on with limited liability, and without exposing the persons interested in it in the event of failure to the harsh provisions of the bankruptcy law."
"47. In Mentmore Manufacturing Co Ltd v National Merchandising Manufacturing Co Inc (1978) 89 DLR (3d) 195 the Federal Court of Appeal of Canada described the question whether, and if so in what circumstances, a director should be liable with the company as a joint tortfeasor as 'a very difficult question of policy'. At page 202, Mr Justice Le Dain, delivering the judgment of the court, said this:
'On the one hand, there is the principle that an incorporated company is separate and distinct in law from its shareholders, directors and officers, and it is in the interest of the commercial purposes served by the incorporated enterprise that they should as a general rule enjoy the benefit of limited liability afforded by incorporation. On the other hand, there is the principae that everyone should be answerable for his tortious acts.'
Plainly, it is necessary, in the individual case, to achieve a balance. Equally plainly, the judge appreciated that. As he put it in paragraph 15 of his judgment: 'inquiries into the matter will or may involve an "elusive question" turning on the particular facts of the case, and whose resolution may in turn involve the making of a policy decision as to the side of the line on which the case ought to fall'.
48. It is because there is a balance to be struck on the facts of each case that it is dangerous for an appellate court to appear to attempt a formulation of the principles which may come to be regarded as prescriptive. …"
Accessory liability in Williams v Natural Life Health Foods
"In any event, the argument is unsustainable. A moment's reflection will show that, if the argument were to be accepted in the present case, it would expose directors, officers and employees of companies carrying on business as providers of services to a plethora of new tort claims. The fallacy in the argument is clear. In the present case liability of the company is dependent on a special relationship with the plaintiffs giving rise to an assumption of responsibility. [D2] was a stranger to that particular relationship. He cannot therefore be liable as a joint tortfeasor with the company. If he is to be held liable to the plaintiffs, it could only be on the basis of a special relationship between himself and the plaintiffs. There was none. I would therefore reject this alternative argument."
The intellectual property cases
"43. In my view it is impossible to read into that passage a general proposition that a director can never be liable as a joint tortfeasor with the company. The basis of Lord Steyn's rejection of joint liability in that case, as it seems to me, is that [D2] could not himself be liable to the plaintiffs, whether jointly or severally, because he was not party to the special relationship which had given rise to an assumption of responsibility and upon which, alone, liability could be founded."
"48. It is because there is a balance to be struck on the facts of each case that it is dangerous for an appellate court to appear to attempt a formulation of the principles which may come to be regarded as prescriptive. But I think it can be said with some confidence that the following propositions are supported by the authorities to which I have referred.
49. First, a director will not be treated as liable with the company as a joint tortfeasor if he does no more than carry out his constitutional role in the governance of the company – that is to say, by voting at board meetings. That, I think, is what policy requires if a proper recognition is to be given to the identity of the company as a separate legal person. Nor, as it seems to me, will it be right to hold a controlling shareholder liable as a joint tortfeasor if he does no more than exercise his power of control through the constitutional organs of the company – for example by voting at general meetings and by exercising the powers to appoint directors. Lord Justice Aldous suggested, in Standard Chartered Bank v Pakistan National Shipping Corporation and others (No 2) [2000] 1 Lloyd's Rep 218, 235 – in a passage to which I have referred – that there are good reasons to conclude that the carrying out of the duties of a director would never be sufficient to make a director liable. For my part, I would hesitate to use the word 'never' in this field; but I would accept that, if all that a director is doing is carrying out the duties entrusted to him as such by the company under its constitution, the circumstances in which it would be right to hold him liable as a joint tortfeasor with the company would be rare indeed. That is not to say, of course, that he might not be liable for his own separate tort, as Lord Justice Aldous recognised at paragraphs 16 and 17 of his judgment in the Pakistan National Shipping case.
50. Second, there is no reason why a person who happens to be a director or controlling shareholder of a company should not be liable with the company as a joint tortfeasor if he is not exercising control through the constitutional organs of the company and the circumstances are such that he would be so liable if he were not a director or controlling shareholder. In other words, if, in relation to the wrongful acts which are the subject of complaint, the liability of the individual as a joint tortfeasor with the company arises from his participation or involvement in ways which go beyond the exercise of constitutional control, then there is no reason why the individual should escape liability because he could have procured those same acts through the exercise of constitutional control. As I have said, it seems to me that this is the point made by Mr Justice Aldous (as he then was) in PGL Research Ltd v Ardon International Ltd [1993] FSR 197.
51. Third, the question whether the individual is liable with the company as a joint tortfeasor – at least in the field of intellectual property - is to be determined under principles identified in CBS Songs Ltd v Amstrad Consumer Electronics Plc [1988] AC 1013 and Unilever Plc v Gillette (UK) Limited [1989] RPC 583. In particular, liability as a joint tortfeasor may arise where, in the words of Lord Templeman in CBS Songs v Amstrad at page 1058E to which I have already referred, the individual 'intends and procures and shares a common design that the infringement takes place'.
52. Fourth, whether or not there is a separate tort of procuring an infringement of a statutory right, actionable at common law, an individual who does 'intend, procure and share a common design' that the infringement should take place may be liable as a joint tortfeasor. As Lord Justice Mustill pointed out in Unilever v Gillette, procurement may lead to a common design and so give rise to liability under both heads.
53. In the light of the authorities which I have reviewed I am satisfied that no criticism can be made of the test which the judge applied. But, in my view, the test can, perhaps, be expressed more accurately in these terms: in order to hold [JY] liable as a joint tortfeasor for acts of copying, and of issuing to the public, in respect of which CRL was the primary infringer and in circumstances in which he was not himself a person who committed or participated directly in those acts, it was necessary and sufficient to find that he procured or induced those acts to be done by CRL or that, in some other way, he and CRL joined together in concerted action to secure that those acts were done."
"7. The essential part of this analysis is the emphasis on the need in a case such as the present to show on normal principles that Mr Kuo was a joint tortfeasor with the company. The question is whether Mr Kuo is sufficiently involved in the company's torts, bearing in mind that the whole course of the company's course of trading, so far as CD-R's are concerned, was potentially infringing. As I understand it, the fact that he was an officer of the company is not a factor in his liability save to the extent to which it afforded him the opportunity to participate in the acts of the company to the extent necessary to fix him with liability as a joint tortfeasor."
"96. … However, it seems to me clear that Lord Steyn cannot have intended his remarks to apply to the factual situation which I have found in the instant case. It cannot ever have been the policy of the law that a director of a company who commits acts amounting to deceit and at the same time procures acts amounting to deceit by the company of which he is a director, should be able to claim exemption from tortious action because of his status as director. On the contrary, the clear policy of the law must be – and must always have been – in favour of a remedy for fraud. It is in my view inconceivable, where fraud is proved, that the status of director could act as an effective shield from personal liability by a director."
"82. Chadwick LJ's third proposition, at page 424, is as follows:
'Third, the question whether the individual is liable with the company as a joint tortfeasor – at least in the field of intellectual property – is to be determined under principles identified in CBS Songs Ltd v Amstrad Consumer Electronics Plc [1988] AC 1013 and Unilever Plc v Gillette (UK) Limited [1989] RPC 583. In particular, liability as a joint tortfeasor may arise where, in the words of Lord Templeman in CBS Songs v Amstrad at page 1058E to which I have already referred, the individual "intends and procures and shares a common design that the infringement takes place".'
83. Here, too, there is a difficulty. It is common enough for a person to be taken to have 'intended' the natural and probable consequences of his acts. A corresponding view, on many sets of facts, would no doubt be appropriate also to 'procurement' by him where the person who had the deemed intention had the power to ensure that it was carried into effect. But the requirement that a defendant should 'share a common design' may be said to add a subjective requirement, namely that, independent of what, in point of law, he could be taken to have intended, there should be proved to have existed in him a subjective intention or desire that the events complained of should occur. That is a question to which I shall have to return when I look at the facts but, on a different point, and given, again, that what is being looked at is a judgment rather than a statute, I would see no difficulty in extending that reference to a 'common design that the infringement takes place' to a 'common design that the events complained of and said to constitute the infringement take place'. That, in a tort of strict liability, such as infringement of design right, would seem to me to be an irresistible extension of the proposition under discussion."
"28. Absent any issue arising from their status as directors (or shareholders) it is clear from Fish & Fish v Sea Shepherd that there is no requirement, for a tort of strict liability like the trade mark infringements in this case, that the accessory should have an improper motive or should know or have reason to believe that the activity is or may be an infringement. For this point it is enough to set out a passage from the judgment of Lord Neuberger at paragraph 60 where he explained that
'… it is unnecessary for a claimant to show that the defendant appreciated that the act which he assisted pursuant to a common design constituted, or gave rise to, a tort or that he intended that the claimant be harmed.'
29. Lord Sumption made the same point in paragraph 37(iii) of his judgment when he referred to the defendant being liable if they assisted in the commission of a tort pursuant to a common design to do an act which is 'or turns out to be' tortious.
30. In the present case the fact that the Ahmeds' conduct was clearly deliberate and intentional in the sense I have described already means that they satisfied the test in Fish & Fish v Sea Shepherd. Thus the only basis on which this ground of appeal can succeed is on the footing that they were directors of the company. In fairness that is how counsel put the case on their behalf but it bears emphasising at this stage. This means that the two points identified above (state of mind and director's duties) in effect come down to the same issue."
"34. Chadwick LJ's paragraphs 49 and 50 fit together and in my judgment they substantially answer the issue on this appeal. They explain that the grounds on which a company director may be found to be an accessory are not wider than those applicable to other people. So to be found liable one way of approaching the matter will be to ask whether the individual's conduct would make them liable as an accessory in any event, irrespective of their status as a director. Assuming that is so, then the next question is whether the fact that person is a director of the company means they have a defence open to them. They may do so but only if the conduct which has made them potentially liable amounts to their doing no more than carry out their constitutional role in the governance of the company."
"37. I do not read Chadwick LJ's paragraph 49, or any other part of his judgment, as being so prescriptive as to mean that the only thing which amounts to carrying out the director's constitutional role is voting at board meetings, but it is clear that Chadwick LJ had in mind a narrow exception. That is not surprising given his recognition that a balance is involved and that everyone should be liable for their tortious acts.
38. There is nothing in MCA v Charly to support the argument being advanced before us, that individuals like Mr and Ms Ahmed, who no doubt never acted outside their authority as a senior executive employees of D11, in personally procuring the actions which turned out to be infringements and by assisting in those actions pursuant to a common design to bring them about, should escape liability simply because they are directors of the company when another senior executive employee, who did the very same things but was not a director, would not. That is the opposite of Chadwick LJ's reasoning. …"
"19/22. The acid test, then, is whether the putative tortfeasor is exercising control through the constitutional organs of the company. If he does no more than vote at board meetings, then he will be exercising control through the constitutional organs of the company. The constitution of the company may of course have delegated authority to officers of the company without the need for formal board meetings; and in that event I would not rule out the possibility that an individual doing no more than exercising that properly granted authority would escape personal liability."
"33. The important principles are the first two, but before turning to them I note the careful statement by Chadwick LJ in paragraph 51 that he was stating the principle there at least in the field of intellectual property. As I said above on Lifestyle's appeal, I can see no reason why the principles applicable should differ as between those cases and others. Nevertheless every judicial statement of the law has to be understood in the context and circumstances in which it is made. Like Chadwick LJ, I am seeking to identify the applicable principles in the context of this case, which is about infringements of intellectual property rights."
Analysis
Disposal
Lord Justice Phillips:
Lady Justice Andrews: