Breach of confidence by shareholder/director - shareholder bringing proceedings following discontinuance of company's action - shareholder's losses merely reflective of company's losses irrecoverableGiles v Rhind: ChD (Mr Justice Blackburne): 24 July 2001The claimant and the defendant were directors of and shareholders in a company.

The defendant resigned from his employment but remained a shareholder.He subsequently went into competition with their former employer, in breach of confidence diverting the company's most important contract to his new business.

The company's proceedings against the defendant were discontinued due to lack of funds.

The company entered creditors voluntary liquidation.The claimant brought his own action for breach of confidence against the defendant.

The issue of liability was determined in favour of the claimant.Following the decision in Johnson v Gore Wood & Co [2001] Gazette, 22 February, 46; [2001] 2 WLR 72, the deputy master directed that a judge should determine, as a preliminary issue, whether damages could be recovered under certain heads of loss.The claimant in person.

Paul Greenwood (instructed by Douglas Wemyss, Leicester) for the defendant.Held, declaring that none of the losses were recoverable, that any loss suffered by a shareholder, which would have been made good if the company had enforced in full its rights against the defendant wrongdoer, was not recoverable by the shareholder; that such irrecoverable losses were not merely confined to a shareholder's loss of dividends on his shares or diminution in the value of his shareholding but extended to all other payments which he might have obtained from the company if it had not been deprived of its funds, and to any other payments which the company would have made to him, even if qua employee and not qua shareholder; and that all the heads of loss claimed were irrecoverable, being merely reflective of losses suffered by the company.