Source: All England Reporter
Publisher Citation: [2002] All ER (D) 158 (Oct)
Neutral Citation: [2002] EWHC 1988 (QB)
Court: Queen's Bench Division
Judge:

Stanley Burnton J

Representation Martyn Barklem (instructed by Stevens & Bolton) for the claimant.
  Bridget Williamson (instructed by Leeds Day) for the third defendant
  The first and second defendants did not appear and were not represented.
Judgment Dates: 11 October 2002

Catchwords

Company - Articles of Association - Director - Costs - Company joining director as defendant to application for injunction - Company seeking costs against director - Company's action for costs against director struck out - Director seeking costs against company - Articles of association providing for director to be indemnified by company against liability in the execution of his duties - Whether director able to rely on articles in respect of costs application.

The Case

When dealing with questions of costs against a director arising out of proceedings against by a company, the court in appropriate cases should take into account a provision in the company's articles of association providing for the director to be indemnified out of the assets of the company against all losses or liabilities incurred in the execution of the duties of his office; it was not necessary for the director to make to be a formulated claim or counterclaim pleading such a provision. Following the authorities, however, such a provision should be applied by the court only if its application was straightforward and not susceptible of real dispute, as where there was doubt about the basis on which the director had accepted his appointment.

Practice Areas

If you are a LexisLibrary subscriber you can read more about this case here.