Skip to main content

Local government, Misfeasance in public office

The claimant company’s misfeasance claim for £500,000 of alleged loss of profits was dismissed.

Perma-Soil UK Limited v (1) Keith Williams and (2) Flintshire County Council

His Honour Judge Keyser QC (sitting as a judge of the High Court), 10 May 2016

Summary

The claimant company’s misfeasance claim for £500,000 of alleged loss of profits was dismissed.

Facts

The claimant company manufactures a product which can be mixed with material taken from the highway and enables excavated earth to be reinstated in an environmentally friendly way. The claimant alleged that a senior officer of the defendant council had been instrumental in establishing a rival company in which he had a financial interest. It was alleged he acted knowingly and unlawfully in favouring the interests of this rival company over those of the claimant. The company contended that it had lost a major contract with a civil engineering firm as well as three other contracts. It also made a more general allegation of the loss of other national contracts. 

The council’s position was that its officer had nothing to do with setting up the rival company and that the decision to set up that company by the third party was due to his dissatisfaction with the service provided by the claimant and for his own financial advantage.  

Judgment

In a detailed judgment, HHJ Keyser QC dismissed the claim in its entirety. He found that the claimant’s allegations did not satisfy the criteria required to meet the high threshold for proving misfeasance. The allegation of targeted malice required the claimant to prove that the officer acted with the specific intention of damaging the company. This allegation was “wholly implausible”. Similarly, the allegation that the officer acted in a knowingly unlawful way for personal gain was rejected.

The claimant was ordered to pay the defendants costs of the action in full.  An application for permission to appeal was refused.  

Comments

This was a complex and time-consuming case in which there was considerable animosity between the claimant and the rival company due to both professional and personal issues. However, the essence of the claim against the council centred on the well-established legal principles that form the basis of the tort of misfeasance. Not untypically for actions in misfeasance, the claimant’s case fell substantially short of what was required. 

Weightmans LLP acted for the council and Mr Williams in this case.

For further information about Weightmans LLP or to discuss any of the issues in this update, please contact either: