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Directors' Duties, (The company's constitution is stated in S17 CA…

- - - - Punt v Symonds
        Deliberately dilute the shareholding and voting rights of shareholders who is opposing a resolution supporting a take-over bid.
      - Hogg v Crampton
        With the intention of deliberately diluting the voting rights of a majority shareholder who is opposing a resolution supporting a take-over bid.
      - Howard Smith v Ampol Petroleum
      - Piercy v S Mills & Co Ltd
  - - - This requires one to determine the "principal purpose" of the exercise.
        
        In determining whether a power was exercised improperly is a two fold test propounded by Lord Wilberforce in Howard Smith v Ampol Petroleum:
        
        To examine, on a "fair view" the nature and limits of the power exercised [i.e. the proper purpose], and
        
        To examine the substantial purpose for which the power was actually exercised (and in this light, whether the power was exercised for its proper purpose.)
- - - - Derived from Millett LJ's dicta in
        Bristol and West Building Society v Mothew
        A fiduciary must act in good faith; he must not make a profit out of his trust; he must not place himself in a position where his duty and his interest may conflict.
        
        The duty under this section is traditionally a very strict doctrine.
        Nature of this duty: Preventive
        Its strict nature is illustrated by Lord Herschell in Bray v Ford:
        A person in a fiduciary position is not allowed to put himself in a position where his interest and duty conflict.
        It is based upon the consideration that, human nature being what it is, there is a danger of the pweson holding a fiduciary positiion being swayed by interest rather than by duty, and thus prejudicing those whom he was bound to protect.
        
        Possibly may conflict
        
        S175(1):
        It does not have to be actual conflict, the possibility of conflict will suffice to found a breach.
        This does not mean any theoretical or rhetorical possibility of conflict is sufficient but:
        
        Boulting v Assoc Of Cinematograph, Television and Allied Technicians
        
        Boardman v Phipps
        
        Chan v Zakaria
        
        Hospital Products Ltd v United States Surgical Corp
        
        This is captured as well in S175(4)(a):
        This duty is not infringed --
        (a) If the situation cannot reasonably be regarded as likely to give rise to a conflict of interest;
        
        Lord Goldsmith, Official Report:
        The director does not incur liability until he is aware of the conflict and fails to do something about it
  - - - Parent company could only subscribe 2k out of the 5k paid up capital in order to enable obtain a lease the two cinemas. It was agreed that the directors and their associates would subscribe the outstanding 3k shares
  - - - Corporate opportunity is considered to be an asset which belongs to the company — the director may not take it for himself
        
        Cook v Deeks
- - - - Pre-Donoghue Cases
        Where the courts had low expectations on the standard of care of directors
        
        Re Cardiff Savings Bank
        
        A Marquis was appointed as a director when he was six months old and had only attended one board meeting in 39 years
        
        Re City Equitable Fire Insurance
        Romer J propounded three guiding principles:
        
        A director need not exhibit a greater skill than may be reasonably expected from a person of his level of knowledge and experience;
        
        A director is not bound to give continuous attention to the affairs of the company; and
        
        Having regard to the exigencies (demands) of business and the Articles of Association, the dutied of a director may properly be left to some other official, (and) a director is, in the absence of grounds of suspicion, justified in trusting that official to perform such duties honestly.
        (This suggests that a director suffers no liability if he (mistakenly) thought that his officer was honest -- Not fully accurate of today's position)
      - Post-Donoghue Cases
        Where the standards were higher due to the influence of the neighbourhood principle which flowed even into areas outside of tort