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England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Power Adhesives Ltd v Sweeney & Ors  EWHC 676 (Ch) (31 March 2017)
Cite as:  EWHC 676 (Ch)
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Rolls Building, 7 Rolls Buildings
Fetter Lane, London EC4A 1NL
B e f o r e :
| POWER ADHESIVES LIMITED
|- and -
|(1) STEPHEN JAMES SWEENEY
(2) JANE ELIZABETH SWEENEY
(3) KATHERINE ANNE SWEENEY
(4) MICHAEL FRANCIS FENTON
(5) WILLIAM DAVID HOWLETT
(6) PETER JOHN COOK
(7) HER MAJESTY'S REVENUE AND CUSTOMS
The Defendants did not appear and were not represented
Hearing date: 9 March 2017
Crown Copyright ©
i. 6,600 by Peter Sweeney.
ii. 500 by Steve Sweeney.
iii. 1,000 by Peter Sweeney and three others as trustees of the Sweeney Family Discretionary Trust ("SFDT").
iv. 1,900 by the Fifth and Sixth Defendants as trustees of the William Howlett Discretionary Trust ("WHDT").
In Re Hastings-Bass, deceased  Ch 25 ("Hastings-Bass")
"What has to be established is that the trustee in making his decision has, in the language of Warner J in Mettoy Pension Trustees Limited v Evans  1 WLR 1587, 1625, failed to consider what he was under a duty to consider. If the trustee has in accordance with his duty identified the relevant consideration and used all proper care and diligence in obtaining the relevant information and advice relating to those considerations, the trustee can be in no breach of duty and its decision cannot be impugned merely because in fact that information turns out to be partial or incorrect."
"…if an exercise by trustees of a discretionary power is within the terms of the power, but the trustees have in some way breached their duties in respect of that exercise, then (unless it is a case of a fraud on the power) the trustees act is not void but may be voidable at the instance of a beneficiary who was adversely affected."
i. Peter Sweeney was terminally ill;
ii. There was concern about the Claimant's ability to immediately repay Peter Sweeney's loan account on his death; at the material time, the loan was £490,000 and not £600,000;
iii. The directors of the Claimant believed it was essential for action to be taken before the end of 2015. Steps were therefore taken in some haste.
"Brian [Pope] and I have discussed the transaction, of converting the £490k debt to equity and can see no issues, apart from the usual company secretary procedures…".
"… did not consider the issuing Group B shares would have any bearing on the existing ordinary shares. From my perspective, the B shares were to be issued solely for the purpose that the company was not liable to pay the total of the directors' loan account in one lump sum immediately in the event of Peter Sweeney's death."