At common law, directors had to act bona fide in what they considered to be the interests of the company
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Percival v Wright
s170. directors do not owe duties to shareholders directly. duty to company
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Item Software (UK) Ltd v Fassihi
s.172. This is the fundamental duty to which a director is subject
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Eclairs Group Ltd v JKX Oil Plc
171-duty to act only for 'proper purposes' continues to apply over the full range of directors powers. (Supreme Court decision)
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Boulting v Association of Cinema&Television
s.173. prevents a director entering into an agreement preventing later consideration of his duties
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Fulham FC Ltd v Cabra Estates plc
s.173 does not prevent a director, in the proper exercise of his powers, making a decision to bind the company to a future course of action even though this restricts future decisions
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Charterbridge Corporation Ltd v Lloyds Bank
objective element to s.172, allowing court to judge director's own decision against that of an' intelligent honest man'
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Re City Equitable Fire Assurance Co
s.174 early cases indicated a directors' duties were only of an 'intermittent nature'
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Dorchester Finance Co.v Stebbing
s.174 later cases show a director must pay adequate attention to the company's affairs
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Re Barings
s.174 All directors have ongoing monitoring and supervisory obligations
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London and Mashonaland Exploration Co v New Mashonaland Exploration Co
s.175 no prohibition on a director acting as a director of a rival company, but he approached this on the basis of contractual restraints and confidentiality rather than fiduciary duties
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Plus Group v Pyke
s175 CoA indicated that, in general, the holding of a competing directorships would require the approval of the companies in question, but situation is 'fact specific'
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Sharma v Sharma
s175 prior approval of shareholders
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Bairstow v Queens Moat Houses
s1157-reasonableness is measured objectively
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Foss v Harbottle
action against the directors will be difficult while they remain in power because of the rule in F&H and the difficulties for shareholders in bringing a derivative claim.
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Regal Hastings v Gulliver
s175- HoL found directors in breach even though acting in good faith and where the co. could not take the opportunity itself
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Island Export Finance v Umunna
s175 -Directors, no less than employees, acquire a general fund of knowledge and expertise in the course of their work, and it is plainly in the public interests that they should be free to exploit it in a new position
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Peso Silver Mines v Cropper
s175 director not liable because opportunity had been rejected bona fide by the company
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Howard Smith v Ampol Petroleum
171-what was the 'substantial purpose' for which the directors ACTUALLY exercised the power- and then ask if that was proper or improper
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Re W&M Roith
s172(1)-must act in good faith, subjective test, no ulterior collateral motive
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Primlake v Matthews Associates
s172-transfer of money between directors that director was not entitled to. No honest belief transfer was in best interests
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* McKillen v Misland *
s172(X), 173(X), 175(x2guilty) and 177. 'honest belief' 'detriment to the company' 'ignorance' of conflicting duties. Barclay Bros ratified breach&McKillen lost.
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Aberdeen Railway Co v Blaickie Boys
175&177-not allowed to enter into engagements in which he has or can have a personal interest conflicting or which possibly may conflict with the interests of those whom he is bound to protect (Lord Cramworth)-rule against 'self-dealing'
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Industrial Development Consultants v Cooley
s175 -immaterial whether the company itself would not be able to make a profit
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Bhullar v Bhullar
175-duty to decline it, to offer the co. the opportunity to take it and resume buying property and, only if the company declined it, to get the company's permission to buy it themselves
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Towers v Premier Waste Management
s175-strict duty to avoid conflict by not exploiting company connection for undisclosed and unauthorised personal profit
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Marquis of Bute
s174-standard of care originally set very low- became Pres of bank at 6months old, attended 1 board meeting in 38yrs. Not liable for bank failing-'didn't know whats going on'
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Re City Equitable Fire Insurance Co- 3 propositions
s174-no need to exhibit skill greater than expected; not bound to give continuous attention;can bestow duties on some other official
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Norman v Theodore Goddard
s.214 Insolvency Act 1986 objective standard of care for directors generally, in situations other than wrongful trading
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Other cards in this set
Card 2
Front
Percival v Wright
Back
s170. directors do not owe duties to shareholders directly. duty to company
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