James Morgan KC acted for the successful second defendant in Uavend Properties Inc v Adsaax Ltd & Vistra Trust (Singapore) PTE Ltd  EWHC 2073 (Comm), a novel economic loss case concerning whether a trust company procured a breach of contract by its subsidiary, or was vicariously liable for the acts of its employee, the subsidiary’s director.
A Singapore trust company (“Vistra”) holds 95% of the shares in a BVI subsidiary (“Adsaax”) and effectively controls it. Vistra nominates two of its employees and directors (“the Employees”) to act as directors of the BVI corporate director (“Prudence”) of Adsaax. In 2014, the latter enters into a contract of loan (signed by the Employees on behalf of Prudence) with a third party(“Uavend”), which requires repayment on receipt of certain distributions. On the findings at trial, Adsaax is found to have breached the terms of the loan by entering into a set-off agreement in 2015 (signed by the Employees on behalf of Prudence) by which such distributions were re-directed to satisfy another obligation.
Adsaax is liable to Uavend for breach of contract, but is impecunious. Does Uavend have a claim against Vistra for procuring that breach of contract by reason of (a) any direct act of procurement or (b) it being vicariously liable for the actions of its employees? Although, in the words of the Miss Julia Dias KC(sitting as a Deputy Judge) there were “interesting questions, bordering at times on the metaphysical”, she answered that question in the negative by reference to the law and the facts.
James Morgan KC has written a short article on the decision in the case. You can read it here.
James was instructed by Druces LLP in this case.