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Directors Duties - Coggle Diagram
Directors Duties
different types of directors
directors name in writted by subscribers to constitution -144
shadow directors
not formally appointed - s221 0 but directors act in accordance with their advice or instructions
fyffes v DCC
insider trading with related company, james director of parent company - - not a shadow director - directors didn't act on his instruction - imperative quality
130 and 221 of CA 2014
- body corporate not shadow director although director of body corpate can be
by not call themselves directors
hocroft development
giving other directors instructions
de facto director
s222
Re Hyrdodam
claim to be directors act as directors but not formally appointed - while shadow directors claim not to be director
appointment may not meet formal requirements of company's constitution
Tjole
must be part of governing structure and in position to discharge functions of a director
Gray v McLoughlin
look at various factors - did indivdiual use title director, did indivdiual have info and in position to exercise power - other directors considered him to be a director, he acception his discription, responsibilites for finance, negotiated for company
managing director 159
de jure directors - 144 - formally appointed
appointment
natural person, not a minor
at least one resident in ireland 137
procedure can be determined by companies consittution
members have power to remove or fire directors
who directors owe duties to
fiduciary duty
members placing trust and confidence in directors to run company on their behalf -
Bristol and Ws Building Society
duty owed to
company 277 - owed to company as a whole rather then individual shareholders -
dawson international
onligation to company
Courtney
more likely to owe duty to shareholders in private company as closer relationship
expansion
to creditors
kinsella
(australian case) referred to by Irish - company imminent collapse, granted lease at undervalue with option to purchase, transaction approved at general meeting - purpose of transaction to put assets out of reach of credtiros - if company in liquidation creditors rights displace power of shareholders
frederick inns
- director of group of companies making payments, group in financial difficulty, - SC - duty to preserve assets or at least not dissipate them
yukong
no dity to indivdiual creditors
to shareholders
Coleman v Myers
family type company, directors acquired shares from shareholder of company, withheld info about value of the shares - successful (likely only in family business)
Brunninghausen
australian case - can arise if competing with duty to company
securities trust v associated properties
minority shareholder not informed takeover bid financed by company itself - could in particular circumstances owe duty
to employees
park v daily news
no authority for directors to consider interests of employees
224 CA 2014 - a bit meaningless up to directors to enforce and only have to consider
duties
general duties 228
act i
n good faith
in interest of company
not use company for own benefit
avoid conflict of interest
regal hastings v gulliver
motives not important if made profit due to fiduciary position accountable
can't make undisclosed personal profit from position
Glencore v Dalby
followed regal hastings, not a defence that company would not or could not take up position - only way to profit if it was approved by shareholders
spring grover services
duty to not use confiential info obtained as director for any purpose other then benefit the company
foster bryant surveying
resigned as director, constructive dismissal nearly, no suggestion of deceit, didn't seek opportunity - not a breach of fiducary dities
internal
can't enter contract with company itself - vodiable
abderdeen railway
doesn't matter if fair or not
exercise skill, care and diligence
owed to company, sometimes 3rd party
city equitable fire insurance
company lost 1.2 mil in assets due to fraud - must act with some degree of skill and diligence -based on person's knowledge and experience, don't have to give continuous attention, but be aware
can rely on others
Brazilian rubber plan
- directors no business acumen or qualificaitons not liable
228
diligence
tralee beef and lamb
if delegate need to supervise discharge, even non-executive directors have some repsonsibility
kavanagh v reidler
non-executive directors can rely on info provided by executive directors
nominee directors -
irish press
can act in interests of shareholders but interest of company takes priority can't camage interests of one group in favour of another
281 - duty to ensure keep adequate accounting records
261 - disclose any interest in company shares
s231 - disclosure of interests
disclsoe any interest in contract at first meeting where proposed contract raised or after acquire itnerest
duty to ensure compliance with Companies act 223
Percival v Wright
direcotrs did not inform shareholders negotiating deal where whole company would be purcahsed, former shareholders sued formmer directors - not successful - no duty to individual shareholders only to company (different today likely insider dealing)
company as a whole
can still declare dividends from profits
good faith
regentcrest v cohen
- didn't look at what court would have done in directors position, director honestly believed acting in best best interest of company - subjective test
improper purpose
howard smith v Ampol
power to issue new shares, purpose was to riase revenue - went for lower bid - improper purpose - what was the subsntial purpose behind power and was the exercise of power proper - in this case allotment purpose was to block takeover - not proper
Jermyn Street Turkish Baths
allotment leaving one person charge was allowed as necessary for companies survival
clarke v workman
bound to consider all offers and weigh them, can;t just support one
tort liability
Shinkwin v Quinn
injured during employment - test - was manage or owner closely invovled in operation and in supervision that they made themselves liable - not lifting corporate veil but liable due to own actions
source of duties
agent - from articles or constitution
employees - written contract of employment
regulation of transfers between company and directors
238 substantial non cash assets
more then 5000 in value requires sahreholder approval - ordinary resolution
certificate of compliance required
loans, quasi loans or credit transactions
s239
applies to director and person connected with director or director of holding company
exceptions
summary approval procedure
240 if value less then 10% of relavent assets
243 intra group trnsaction
director expenses - 244
directors powers
exercise power delegated to them under 158 previous 80
qualifications
regulation contained in constitution, provision of CA 2014, not inconsistent with foregoing regulations or provisions
purpose - someone needs to deal with everyday affairs
people invest to get financial reward, don't want to run company themselves
RE Argentum Reductions
- shareholers can't interfere once legal action started
exclusive power vested in directors unless specifically alloted to company in general meeting
- Alex Ward
if director refuses to follow wishes of members
special resolution
212 - oppression
replace them at general meeting
members powers can resurge
directors act in breach of duties - s228 - can act in antipation of breach
directors exceeded delegated authority
Re Burke Clance
- borrowed more money then authorised to, members power could decide whether or not to ratify
abolished by 973 for ltds
director not capable of acting
resign or die
mahony v holyford mining
never officially appointed
directors can't be a body corporate 130, a minor 131
directors removed by ordinary resolution - 146 - unless private company and director for life