Cook v Deeks

Cook v Deeks
Cook v Deeks
Court Privy Council
Date decided 23 February 1916
Citation(s) [1916] 1 AC 554
Judge(s) sitting Lord Buckmaster LC, Viscount Haldane, Lord Parker of Waddington and Lord Sumner
Keywords
Corporate opportunity, conflict of interest

Cook v Deeks [1916] 1 AC 554 is a UK company law case, concerning the illegitimate diversion of a corporate opportunity.

In UK company law the case would now be seen as falling within the Companies Act 2006 section 175, with a failure to have ratification of breach by independent shareholders under section 239.

Contents

Facts

The Toronto Construction Co had four directors, Mr GM Deeks, Mr GS Deeks, Mr Hinds and Mr Cook. It helped in construction of railways in Canada. The first three directors wanted to exclude Mr Cook from the business. Each held a quarter of the company's shares. Deeks, Deeks and Hinds took a contract with the Canadian Pacific Railway Company (for building a line at the Guelph Junction and Hamilton branch) in their own names. They then passed a shareholder resolution declaring that the company had no interest in the contract. Mr Cook claimed that the contract did belong to the Toronto Construction Co and the shareholder resolution ratifying their actions should not be valid because the three directors used their votes to carry it.

Advice

The Privy Council advised that the three directors had breached their duty of loyalty to the company, that the shareholder ratification was a fraud on Mr Cook as a minority shareholder and invalid. The result was that the profits made on the contractual opportunity were to be held on trust for the Toronto Construction Co.

Lord Buckmaster said that the three had,

deliberately designed to exclude and used their influence and position to exclude, the company whose interest it was their first duty to protect... the benefit of such contract... must be regarded as held on behalf of the company... [It was] quite certain that directors holding a majority of votes would not be able to make a present to themselves. This would be to allow a majority to oppress the minority... Such use of voting power has never been sanctioned by the court.
it appears quite certain that directors holding a majority of votes would not be permitted to make a present to themselves. This would be to allow a majority to oppress the minority....if directors have acquired for themselves property or rights which they must be regarded as holding on behalf of the company, a resolution that the rights of the company should be disregarded in the matter would amount to forfeiting the interest and property of the minority of shareholders in favour of the majority, and that by the votes of those who are interested in securing the property for themselves. Such use of voting power has never been sanctioned by the Courts

See also

  • UK company law
  • North-West Transportation Co v Beatty (1887) 12 App Cas 589
  • Burland v Earle [1902] AC 83

Notes

External links


Wikimedia Foundation. 2010.

Игры ⚽ Нужно решить контрольную?

Look at other dictionaries:

  • United Kingdom company law — Beside the River Thames, the City of London is a global financial centre. Within the Square Mile, the London Stock Exchange lies at the heart of the United Kingdom s corporations. United Kingdom company law is the body of rules that concern… …   Wikipedia

  • 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… …   Wikipedia

  • Directors' duties in the United Kingdom — bind anybody who is formally appointed to the board of directors of a UK company. Contents 1 Scope 2 Duty to act for proper purposes 3 Duty of care 4 …   Wikipedia

  • List of stage names — This list of stage names lists performers alphabetically according to surname (assumed or genuine) and their nickname. Individuals who have dropped their last name and substituted their middle name as their last name are listed. Also listed are… …   Wikipedia

  • Personajes de Home and Away — Anexo:Personajes de Home and Away Saltar a navegación, búsqueda Matrimonios, nacimientos y defunciones de los personajes de la serie australiana Home and Away. Contenido 1 Antiguos Personajes 2 Matrimonios 3 Embarazos Nacimientos …   Wikipedia Español

  • Ricin — (pronEng|ˈraɪ sɨn) is a protein toxin that is extracted from the castor bean ( Ricinus communis ).The U.S. Centers for Disease Control (CDC) gives a possible minimum figure of 500 micrograms (about the size of a grain of salt) Fact|date=May 2008… …   Wikipedia

  • Medical analysis of circumcision — Numerous medical studies have examined the effects of male circumcision with mixed opinions regarding the benefits and risks of the procedure. Opponents of circumcision say it is medically unnecessary, is unethical when performed on newborns, is… …   Wikipedia

  • Charles Taylor Prize — The Charles Taylor Prize is a Canadian literary award, presented by the Charles Taylor Foundation to the best Canadian work of literary non fiction. It is named for Charles Taylor, a noted Canadian historian and writer. The award has a monetary… …   Wikipedia

  • Ipswich Council election, 2007 — Elections to Ipswich Council were held on 3 May, 2007. One third of the council was up for election and the council stayed under no overall control.After the election, the composition of the council was *Conservative 20 *Labour 18 *Liberal… …   Wikipedia

  • Liste von Pseudonymen — Hier ist eine Liste bekannter Pseudonyme. Inhalt und Konventionen Die Liste soll alphabetisch nach den Pseudonymen sortiert sein. Die Einträge sollen formatiert sein, um Übersichtlichkeit zu gewährleisten. Namensverkürzungen (z. B. Rudi… …   Deutsch Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”