Stevens v Hotel Portfolio II: Supreme Court on Liability for Dishonest Assistance
The Supreme Court overturned the Court of Appeal’s decision in Stevens v Hotel Portfolio II UKSC 28, confirming that a person can be held liable for equitable compensation if they dishonestly assist a director in misappropriating unauthorised profits.
Case Background
In 2005, Hotel Portfolio II UK Ltd sold three hotels at market value to Cambulo, a Madeiran company allegedly owned by Anthony Stevens. However, Stevens was actually a nominee for Andrew Ruhan, a director of Hotel Portfolio II, who concealed his involvement as the true purchaser.
Between 2006 and 2008, Cambulo sold the hotels, with Ruhan receiving profits amounting to £103.76 million, which he then dissipated.
Legal Claims
- Hotel Portfolio II claimed that Andrew Ruhan breached his fiduciary duties as a director.
- The company also accused Anthony Stevens of dishonestly assisting Ruhan in this breach.
“A person can be liable to pay equitable compensation where they dishonestly assist a director in dissipating unauthorised profit.”
Significance
The decision clarifies that liability for dishonest assistance extends to compensation for assisting breaches in constructive trusts, reinforcing fiduciary accountability.
Author’s summary: The Supreme Court’s ruling in Stevens v Hotel Portfolio II affirms that those who dishonestly aid directors in misappropriating company profits can be held financially responsible for equitable compensation.