S U Consultancy Ltd vs Gurmit Singh and others: High Court of Justice ruling on constructive trust and damages

On 12 March 2025, His Honour Judge Worster handed down a significant judgment in the case between S U Consultancy Ltd and defendants Gurmit Singh, Balvinderjeet Kaur, and Miura Distribution Ltd, along with associated Part 20 claims involving additional parties. The case, heard in the Business and Property Courts in Birmingham, revolved around complex issues of unlawful means conspiracy and constructive trust.

The primary judgment in the case was delivered on 24 June 2024, with a supplementary judgment on the date of loss issued on 15 November 2024. The parties involved were unable to reach an agreement on consequential orders, necessitating a further hearing on 13 December 2024. The main point of contention was the end date for the account to be taken on the Part 20 claim.

During the hearing on 13 December 2024, the majority of the disputed issues regarding consequential orders were resolved. However, the Defendants requested additional time to prepare submissions in response to the arguments presented by Mr Avtar Khangure KC, representing the Claimant and Part 20 Defendants. The court granted this request, and subsequent written submissions were received from both parties.

The case originated from a tort claim by Miura Distribution Ltd, one of the defendants, against S U Consultancy Ltd, the Claimant. Miura alleged unlawful means conspiracy and sought damages for the alleged actions. The court had previously assessed the damages based on the value of Miura's business, which was claimed to have been affected by the alleged conspiracy.

During the trial, it was established that S U Consultancy Ltd held Miura's business on a constructive trust for Miura. Consequently, S U Consultancy Ltd was required to account for the costs incurred and the income and profits generated from 31 July 2020 until 31 December 2024, or until a date determined by the court. However, the exact end date of this account remained a point of contention between the parties.

At the hearing on 13 December 2024, the court addressed most of the disputed consequential orders, but the defendants requested additional time to respond to the arguments regarding the end date of the account, as raised by Mr Khangure KC. Written submissions were subsequently received from both parties, with Mr Lewis KC and Mr Maris representing the Defendants and Part 20 Claimants, and Mr Khangure KC responding on behalf of the Claimant and Part 20 Defendants.

The core issue revolved around whether Miura, by accepting damages assessed based on the value of its business at the time of the breach, had effectively relinquished its claims under the constructive trust. The Defendants argued that the court's supplemental judgment had already rejected the notion of Miura claiming damages based on the current value of S U Consultancy Ltd, asserting that the assessed damages should extinguish Miura's interest in the business.

However, Mr Lewis KC and Mr Maris, representing the Defendants, contended that there should be no overlap between the compensation for the value of the asset taken and the profits made with that asset since the breach. They argued that Miura's interest in the business would be extinguished upon receiving the assessed damages.

Ultimately, the court decided that there should not be double recovery. The court ruled that Miura's claim for damages for the value of the business would be considered satisfied upon payment of the assessed damages by S U Consultancy Ltd. This decision was reached by considering both the principle of avoiding double recovery and the equitable nature of the constructive trust.

The court's judgment provided clarity on the end date of the account, determining that it would conclude upon the satisfaction of Miura's claims for damages. This decision was seen as a fair resolution to prevent double recovery and to ensure that the remedies awarded were just and equitable.

The draft minute of order from the hearing on 13 December 2024 was largely agreed upon by the parties, with two remaining issues: the date from which interest on costs would be payable and the definition of 'Relevant Books of Account' for the purposes of the account. The court ruled that interest on costs should run from the date of judgment, 13 December 2024, aligning with the normal rule under CPR Part 40.8(1). The court found no compelling reason to depart from this rule, despite submissions from SU suggesting otherwise.

Regarding the definition of 'Relevant Books of Account,' the court decided that the additional details proposed by Miura were unnecessary. The agreed process for taking the account would ensure the disclosure of relevant documents without the need for a more detailed definition.

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