''Percival v Wright''
902
__NOTOC__
Year 902 (Roman numerals, 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, Adalbert II, margr ...
2 Ch 401 is a
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 legal ...
case concerning
directors' duties
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' ...
, holding that directors only owe duties of loyalty to the company, and not to individual shareholders. This is now codified in the United Kingdom's
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 largely ...
, section 170.
Facts
Shareholders in Nixon's Navigation Co. wanted to sell their shares, and requested that the company's secretary find purchasers. Some directors of the company purchased the shares at £12.10s per share, which price was based upon independent valuation. After the sale, the shareholders discovered that before and during the negotiations for that sale, the board of directors had been involved in other negotiations to sell the entire company, which would have made those shares substantially more valuable had they come to fruition. The plaintiff sued, claiming breach of fiduciary duty, in that the shareholders should have been told of these negotiations.
Judgment
Swinfen Eady J held the directors owed duties to the company and not shareholders individually.
Significance
''Percival v Wright'' is still considered to be good law, and was followed by the
House of Lords
The House of Lords, also known as the House of Peers, is the Bicameralism, upper house of the Parliament of the United Kingdom. Membership is by Life peer, appointment, Hereditary peer, heredity or Lords Spiritual, official function. Like the ...
in .
However, it has been distinguished in at least two subsequent cases. In ''Coleman v Myers''
977
Year 977 ( CMLXXVII) was a common year starting on Monday (link will display the full calendar) of the Julian calendar.
Events
By place Europe
* May – Boris II, dethroned emperor (''tsar'') of Bulgaria, and his brother Roman ma ...
2 NZLR 225 and ''
Peskin v Anderson
''Peskin v Anderson'' 000EWCA Civ 326is a UK company law case concerning Directors' duties in the United Kingdom">directors' duties under English law.
Facts
Former members of the Royal Automobile Club (RAC) sued the directors for failing to di ...
''
001BCLC 372
[ ] the court described this as being the general rule, but one which may be subject to exceptions where the circumstances are such that a director may owe a greater duty to an individual shareholder, such as when that shareholder is known to be relying upon the director for guidance, or where the shareholder is a vulnerable person.
See also
*
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 legal ...
*''
Johnson v Gore Wood & Co
is a leading UK company law decision of the House of Lords concerning (1) abuse of process relating to litigating issues which have already been determined in prior litigation or by way of settlement, (2) estoppel by convention, and (3) reflect ...
''
Notes
{{reflist
United Kingdom company case law
High Court of Justice cases
1902 in case law
1902 in British law