Judgment
The Court of Appeal, upholding the finding of the trial judge, held in favour of Pyke.
Sedley LJ referred to a submission by Pyke's counsel that Bell v. Lever Bros precluded any liability for holding a directorship which competed with the company. Although unnecessary for the judgment, he questioned whether it could still be regarded as correct. In any case, Sedley LJ acknowledged that Pyke had poached a customer, but said that his...
“...duty to the claimants had been reduced to vanishing point by the acts' of his fellow director and shareholder… For all the influence he had, he might as well have resigned.”
Brooke LJ quoted Lord Upjohn's dissenting judgment in Boardman v. Phipps that the circumstances of...
“...each case must be carefully examined to see whether a fiduciary relationship exists in relation to the matter of which complaint is made”.
He stressed that Pyke had been effectively expelled from the company some six months prior to any of the events in question. Also, he was not allowed to withdraw the money he invested in the company and was being denied remuneration. Pyke had not used any company property for the opportunity, or any confidential information that came to him qua director.
Jonathan Parker LJ concurred with Brooke LJ.
The Court of Appeal was thus intent on achieving a just result for Pyke and, on the particular facts, his effective exclusion from the company eliminated his fiduciary duties. Of particular note is the fact-intensive approach taken by the court in exonerating the director from liability. This is especially so in the light of the anxiety expressed by Sedley LJ in emphasising that the trial judge's finding that the customer had made it known that it would not deal with the claimant was immaterial.19 It is noteworthy that the court opted for this route as a means of exonerating the defendant rather than exercising its discretion to relieve him from liability under s.727 of the Companies Act 1985 had it first chosen to apply the inexorable rule forbidding conflict transactions.
Canadian Aero Service Ltd v O'Malley, [1974] SCR 592, is a leading civil case decided by the Supreme Court of Canada on corporate director and officer liability.
Bristol and West Building Society v Mothew [1996] EWCA Civ 533 is a leading English fiduciary law and professional negligence case, concerning a solicitor's duty of care and skill, and the nature of fiduciary duties. The case is globally cited for its definition of a fiduciary and the circumstances in which a fiduciary relationship arises.
Boardman v Phipps [1966] UKHL 2 is a landmark English trusts law case concerning the duty of loyalty and the duty to avoid conflicts of interest.
Foster Bryant Surveying Ltd v Bryant[2007] EWCA Civ 200 is a 2007 UK company law case, concerning the fiduciary duty of directors to avoid conflicts of interest. The timing of the case followed some considerable unrest in the courts about the strictness of the law relating to taking corporate opportunities.
Directors' duties are a series of statutory, common law and equitable obligations owed primarily by members of the board of directors to the corporation that employs them. It is a central part of corporate law and corporate governance. Directors' duties are analogous to duties owed by trustees to beneficiaries, and by agents to principals.
Williams v Natural Life Health Foods Ltd[1998] UKHL 17 is an important English tort law, company law and contract law case. It held that for there to be an effective assumption of responsibility, there must be some direct or indirect conveyance that a director had done so, and that a claimant had relied on the information. Otherwise only a company itself, as a separate legal person, would be liable for negligent information.
Bhullar v Bhullar[2003] EWCA Civ 424, 2 BCLC 241 is a leading UK company law case on the principle that directors must avoid any possibility of a conflict of interest, particular relating to corporate opportunities. It was not decided under, but is relevant to, section 175 of the Companies Act 2006.
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Chandler v Cape plc [2012] EWCA Civ 525 is a decision of the Court of Appeal which addresses the availability of damages for a tort victim from a parent company, in circumstances where the victim suffered industrial injury during employment by a subsidiary company.
Directors' duties in the United Kingdom bind anybody who is formally appointed to the board of directors of a UK company.
Oldham v Kyrris[2003] EWCA Civ 1506 is a UK insolvency law case concerning the administration procedure when a company is unable to repay its debts.
Murad v Al-Saraj[2005] EWCA Civ 959 is an English trusts law case, concerning remedies for breach of trust for a conflict of interest. It exemplifies a restitution claim.
Re Goldcorp Exchange Ltd [1994] UKPC 3 is an English trusts law case by the Judicial Committee of the Privy Council decision on appeal from the Court of Appeal of New Zealand. It considers when there is sufficient certainty of subject matter to form a trust, and tracing. A company dealing in gold and other precious metals became insolvent and the Bank of New Zealand appointed receivers under a debenture. They in turn asked the High Court for guidance on how to treat the company's customers, and Thorp J refused the claims of most of the customers, leaving three categories to be settled on appeal. The outstanding issue was whether the customers had title to the gold on for them, and thus beneficiaries of a trust, or were merely unsecured creditors resulting from a breach of contract.
Relfo Ltd v Varsani [2014] EWCA Civ 360 is an English unjust enrichment law case, concerning to what extent enrichment of the defendant must be at the expense of the claimant.
FHR European Ventures LLP v Cedar Capital Partners LLC[2014] UKSC 45 is a landmark decision of the United Kingdom Supreme Court which holds that a bribe or secret commission accepted by an agent is held on trust for his principal. In so ruling, the Court partially overruled Sinclair Investments (UK) Ltd v Versailles Trade Finance Ltd in favour of The Attorney General for Hong Kong v Reid (UKPC), a ruling from the Judicial Committee of the Privy Council on appeal from New Zealand.
Byers v Saudi National Bank[2023] UKSC 51 is a decision of the Supreme Court of the United Kingdom in the long running litigation between the liquidators of SAAD Investments Company Limited and various parties relating to the alleged defrauding of the insolvent company by one of its principals.
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