The duty of loyalty of a director to his company is the ‘time-honoured’ rule. The directors are under a duty to act fairly as between different shareholders. This applies not just where there were different classes of shareholder but also where shareholders of the same class had differing interests.
The directors’ power of allotment was limited by two considerations only: ‘First, the time-honoured rule that the directors’ powers are to be exercised in good faith in the interests of the company, and secondly, that they must be exercised fairly as between different shareholders. I doubt whether it is possible to formulate either of the stipulations more precisely because of the infinity of circumstances in which they may fall to be applied.’
Judges:
Goulding J
Citations:
[1985] BCLC 11
Jurisdiction:
England and Wales
Cited by:
Cited – Fassihim, Liddiardrams, International Ltd, Isograph Ltd v Item Software (UK) Ltd CA 30-Sep-2004
The first defendant (F) had been employed by a company involved in a distribution agreement. He had sought to set up a competing arrangement whilst a director of the claimant, and diverted a contract to his new company.
Held: A company . .
Cited – Kohli v Lit and Others ChD 13-Nov-2009
The claimant asserted that the other shareholders had acted in a manner unfairly prejudicial to her within the company.
Held: The claimant was allowed to bring in without prejudice correspondence to contradict evidence by the defendant which . .
Lists of cited by and citing cases may be incomplete.
Company
Updated: 13 May 2022; Ref: scu.215870
