S171 CA 06: Act within powers
Howard Smith V Ampol Petroleum (1974)
Trial judge made 2 findings of fact. Primary purpose of issuing shares wasn't to raise money & there was no self interest. Wilberforce said have to attain primary purpose, which is key. This power changed company's structure and there was a breach.
1 of 5
S172 CA 06: Promote success of company
Hellard and Other V Carvalho (2013)
Misfeasance claim against Cavalho, single principal director for payments & bonuses. Included paying himself, dad, companies under his control & xmas bonus to key employee by liquidator. Q) Payments bona fide? Found in breach & told to repay company.
2 of 5
S173 CA 06: Exercise independent judgement
Fullham FC Ltd V Cabra Estates plc (1994)
Deal to develop ground. Directors agreed not to oppose any planning application but changed minds & wanted to oppose. Court said they were bound, as long as acting bona fide at time of agreement as it may be in company benefit.
3 of 5
S174 CA 06: Exercise reasonable skill, care & diligence
Re Barings (2000)
Nick Leeson acted negligent / recklessly.
Investment HK SE
Losses up to £827m
Directors were all disqualified as they were unfit.
Directors had fallen below standard of care expected of them by trusting Leeson with such amount.
4 of 5
S175 CA 06: Avoid conflict of interest
Regal (Hastings) Ltd V Gulliver (1942)
New co. formed to buy 2 cinemas, appellant co. only afford certain no. of shares. Directors & co. solicitor took 500 shares each.
Held (by house of lords): Dirs. accountable to co. for profit as from opportunity from their role.
5 of 5
Other cards in this set
Card 2
Front
Misfeasance claim against Cavalho, single principal director for payments & bonuses. Included paying himself, dad, companies under his control & xmas bonus to key employee by liquidator. Q) Payments bona fide? Found in breach & told to repay company.
Back
S172 CA 06: Promote success of company
Hellard and Other V Carvalho (2013)
Card 3
Front
Deal to develop ground. Directors agreed not to oppose any planning application but changed minds & wanted to oppose. Court said they were bound, as long as acting bona fide at time of agreement as it may be in company benefit.
Back
Card 4
Front
Nick Leeson acted negligent / recklessly.
Investment HK SE
Losses up to £827m
Directors were all disqualified as they were unfit.
Directors had fallen below standard of care expected of them by trusting Leeson with such amount.
Back
Card 5
Front
New co. formed to buy 2 cinemas, appellant co. only afford certain no. of shares. Directors & co. solicitor took 500 shares each.
Held (by house of lords): Dirs. accountable to co. for profit as from opportunity from their role.
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