''Cook v Deeks'' UKPC_10
is_a_Canadian_company_law.html" ;"title="916
UKPC 10
is a Canadian company law">916
UKPC 10
is a Canadian company law case, relevant also for

UK company law The United Kingdom company law regulates corporations formed under the Companies Act 2006. Also governed by the Insolvency Act 1986, the UK Corporate Governance Code, European Union Directives and court cases, the company is the primary lega ...

, concerning the illegitimate diversion of a corporate opportunity. It was decided by the Judicial Committee of the Privy Council, at that time the court of last resort within the British Empire, on appeal from the Appellate Division of the Supreme Court of

Ontario Ontario ( ; ) is one of the thirteen provinces and territories of Canada.Ontario is located in the geographic eastern half of Canada, but it has historically and politically been considered to be part of Central Canada. Located in Central Ca ...

Canada Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by to ...

. Because decisions of the Judicial Committee have persuasive value in the

United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and ...

, even when decided under the law of another member of the Commonwealth,''Willers v Joyce and another''
016UKSC 44, para. 12. this decision has been followed in the United Kingdom courts. In

, the case would now be seen as falling within the

Companies Act 2006 The Companies Act 2006 (c 46) is an Act of the Parliament of the United Kingdom which forms the primary source of UK company law. The Act was brought into force in stages, with the final provision being commenced on 1 October 2009. It largel ...

section 175, with a failure to have ratification of breach by independent shareholders under section 239.

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 Canada has a large and well-developed railway system that primarily transports freight. There are two major publicly traded transcontinental freight railway systems, Canadian National (CN) and Canadian Pacific (CP). Nationwide passenger servi ...

. The first three directors wanted to exclude Mr Cook from the business. Each held a quarter of the company's shares. GM Deeks, GS Deeks, and Hinds took a contract with the

Canadian Pacific Railway Company Canadian Pacific Limited was created in 1971 to own properties formerly owned by Canadian Pacific Railway (CPR), a transportation and mining giant in Canada. In October 2001, CPR completed the corporate spin-offs of each of the remaining busines ...

(for building a line at the Guelph Junction and

Hamilton Hamilton may refer to: People * Hamilton (name), a common British surname and occasional given name, usually of Scottish origin, including a list of persons with the surname ** The Duke of Hamilton, the premier peer of Scotland ** Lord Hamilto ...

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.

Decision

The

Privy Council A privy council is a body that advises the head of state of a state, typically, but not always, in the context of a monarchic government. The word "privy" means "private" or "secret"; thus, a privy council was originally a committee of the mo ...

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. Giving the advice, The Lord Chancellor, Lord Buckmaster held 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,

Notes

{{reflist

References

*''North-West Transportation Co v Beatty'' (1887) 12 App Cas 589 *''Burland v Earle''

902 __NOTOC__ Year 902 ( CMII) was a common year starting on Friday (link will display the full calendar) of the Julian calendar. Events By place Europe * Spring – Adalbert II, margrave of Tuscany, revolts against Emperor Louis I ...

AC 83 Judicial Committee of the Privy Council cases on appeal from Canada United Kingdom company case law 1916 in Canadian case law

Facts

Decision

See also

Notes

References