The Royal Automobile Club (RAC) had been demutualised. The claimants were former members who sought damages from former directors because they had received no benefit. They had ceased to be members before the re-organisation and claimed they should have been informed of the plans. Their case had been struck out as disclosing no reasonable prospect of success. They appealed.
Held: The company was a company limited by guarantee. The governing instruments were altered with the permission of the court to allow distribution of assets to members on dissolution. The appeal failed. There was indeed no chance of success. The claim was a ‘flight of fancy’. The club might always be allowed to amend its constitution, and could expend money for this purpose.
Lord Justice Simon Brown Lord Justice Mummery And Lord Justice Latham
[2000] EWCA Civ 326, [2001] 1 BCLC 372
Bailii
Companies Act 1985 485, Companies Act 1989 108
England and Wales
Citing:
Cited – Re RAC Motoring Services Ltd ChD 8-Jul-1998
The court approved a scheme of arrangement allowing the RAC to sell off its roadside car resue service and to amend its constitution to allow distribution of the assets to members of the company. The effect of the scheme was that the members ceased . .
Appeal from – Peskin, Milner v John Anderson and Others ChD 7-Dec-1999
The claimants sought damages for the failure of the defendants, former directors of the RAC, to warn them of the impending re-organisation and demutualisation of the RAC. By resigning in ignorance they had lost the chance to participate in the . .
Cited – In The Matter of RAC Holdings Ltd ChD 8-Dec-2000
The nature of the membership of the RAC was that it ceased upon death, and that therefore the deceased estate had no interest in the proceeds of a later sale of the company. The share was a personal asset, akin to the membership of many other clubs. . .
Cited – Percival v Wright 1902
The directors of a company owe their duty to the company as a whole, and are not trustees for individual shareholders or owe them a fiduciary duty merely by virtue of their offices. They may purchase their shares without disclosing pending . .
Cited – Stein v Blake and others CA 13-Oct-1997
The defendants challenged leave to appeal given to the plaintiff against dismissal of his claim following the Prudential Assurance case.
Held: The issue was whether the plaintiff can recover the loss which he has allegedly sustained by reason . .
Cited – Allen v Hyatt 1914
The court considered the duties of directors toward shareholders in circumstances of them making representations to secure options to purchase shares of shareholders and undertaking to sell shares of shareholders in agency capacity. . .
Cited – Howard Smith Limited v Ampol Petroleum Limited PC 14-Feb-1974
(New South Wales) The court considered the use by directors of their fiduciary power of allotment of shares for a different purpose than that for which it was granted, and so as to dilute the voting power of the majority shareholding of issued . .
Cited – Re a Company 1987
. .
Cited – Re Chez Nico 1992
The court considered the liability of directors to a company’s shareholders where a fiduciary duty to be open was broken. . .
Cited by:
Cited – Oldham and others v Georgina Kyrris and Another CA 4-Nov-2003
The claimant sought to bring a claim against the administrators of a partnership alleging a duty of care to creditors.
Held: Such an administrator owed no greater duty to creditors than would a director. That duty was no different whether the . .
Lists of cited by and citing cases may be incomplete.
Updated: 04 August 2021; Ref: scu.147359