UK Construction and Law

A director who put his father's IT company on the books must pay 53,086 pounds

By Staff Writer  |  5 September 2026

A construction project management company found that its own director had appointed an IT supplier run by his father, which bought the work in and charged it on with a mark-up. The court found six breaches of duty, dishonest assistance by three others, and refused to excuse any of it.

Del Bosque Limited provides project management services in the construction industry. At the material time its largest client was the Department for Work and Pensions. Amir Shafie was a director, an employee and a 25 per cent shareholder. He was suspended in November 2023 and resigned the day before a disciplinary hearing in February 2024, alleging repudiatory breach. Separate unfair dismissal and unfair prejudice proceedings are on foot.

This claim, [2026] EWHC 2292 (Comm), was tried in the Circuit Commercial Court in Birmingham and decided by His Honour Judge Charman, sitting as a Judge of the High Court, on 4 September 2026. It concerned the appointment of Infinite as the company's IT contractor. Infinite was, until incorporation, a trading name of the director's father, a retired IT teacher. After incorporation the father was a director and half shareholder. The third defendant, a former student of the father, was the other founder and worked full time elsewhere.

Six breaches, and why each one matters

The judge found the appointment itself breached section 172 of the Companies Act 2006, because appointing a start-up with no real resources that intended to buy in the work and add a mark-up was not acting in good faith to promote the company's success. It breached section 175, because every invoice put the director in the position of deciding whether to pay his own father. It breached section 177, because there had been no declaration of interest.

The director said he had mentioned the connection to the other directors at social events. The judge found he had not, and added that even if he had, informal piecemeal disclosure would not have been enough.

Five further breaches followed during the contract: paying marked-up invoices for work actually done by another supplier without disclosing the position; failing to tell the board who was really supplying the service; failing to tell the board about the mark-up on goods; sending client details, departmental data and then twelve months of bank statements to his father's personal email account without encryption; and amending his father's own emails pitching for work and justifying a price increase.

Dishonest assistance, and the accountant's question

The father was liable for dishonestly assisting in the invoicing breaches. He prepared and submitted invoices that named neither the true supplier nor the mark-up, knowing the board did not know he was Infinite. The company was liable for the period after incorporation. The friend was liable for one email of 23 January 2023 in which he helped keep the true supplier's role hidden, and for nothing else.

In every case, Mr Shafie failed to act as any reasonable director would have acted. His breaches of duty were not innocent mistakes. They were deliberate and culpable.

His Honour Judge Charman, sitting as a Judge of the High Court, refusing relief under section 1157 of the Companies Act 2006

Relief under section 1157 requires the court to be satisfied that the act was both honest and reasonable before any discretion arises. The judge decided the case on reasonableness and did not need to reach honesty. He added that even if the director had acted honestly, a case where the father benefited financially and regularly over a long period following acts of deliberate concealment is not one where the director ought fairly to be excused.

What was awarded

The measure of loss was the difference between what the company paid and what it should have been charged, put at 976.89 pounds a month over 20 months. The judge accepted it without expert evidence on the market rate, because a later supplier's charges were very similar to those of the firm that had been doing the work all along.

Against the director the total is 53,086.13 pounds: 19,537.80 pounds for the sums paid to Infinite, 7,620 pounds of investigatory costs and 20,674.33 pounds of legal costs, both consequent on a separate finding that he had instructed the friend to access and copy company data while under suspension. The father is jointly and severally liable for 24,791.80 pounds, the company for 8,792.01 pounds and the friend for 6,838.23 pounds. Claims for the cost of new laptop software and for management time were refused for want of evidence that the loss was caused by the breach.

The sums are small for a High Court trial. The findings are not. A project management business with a public sector client now has a judgment recording that its former director deliberately concealed a related party supplier.