Directors Duties I Flashcards
How are SHs protected from directors exploiting their powers in self interest?
Extensive duties imposed on directors by the CA 2006
Where were directors duties developed before the CA 2006?
Developed in equity then codified by the 2006 Companies Act
Which section of the CA applies when DIR wants to amend the articles of a company?
s21 - they need SH approval
Which section of CA 2006 relates to DIR owing duties to the company rather than SHs?
s170(1)
Case for DIR owing duties to companies rather than SHs?
Foss v Harbottle (1843)
then
Percival v Wright [1902]
Will DIRs ever owe fiduciary duties to SHs?
Sometimes, but these will be “something over and above the
usual relationship that any director of a company has with its shareholders”
Usually in family companies - Sharp V Blank 2015
When a company is in financial difficulty, who do the DIR owe a duty to?
The creditors rather than the SHs
Case where DIR owed SHs a duty?
Coleman v Myers [1977] (New Zealand)
Coleman v Myers [1977]
Company was a private company with
most shares held by members of one family who had habitually looked to the Ds for business advice, and information regarding the true value of the
shares had been withheld from the other family shareholders. On the facts of this case, therefore, the D directors were liable to compensate the shareholders
for loss.
What is the overriding principle of the equitable fiduciary duties owed by directors to the company?
Fiduciaries must not
benefit from their position of trust
Which case summarises how fiduciaries must not benefit from their position of trust?
Towers v Premier Waste Management Ltd [2012]
What did Justice Mummery say in Towers v Premier Waste Management Ltd [2012]?
His fiduciary commitments to the company took the form of a duty of loyalty
and a duty to avoid a conflict between his personal interests and his duty to the
company.
What were the fiduciary duties of directors previous to CA 2006?
At common law:
- Duty of skill and care
In equity:
- Basically what has since been codified
Which part of the CA 2006 applies to DIR duties
Part 10
s 170-177
Which section of the CA 2006 provides for the duties stemming from the old CL and equitable principles?
s170(3) - come from here
s170(4) - will be applied in the same way
