''Cook v Deeks''
UKPC 10is a Canadian company law">916
UKPC 10is a Canadian company law case, relevant also for
UK company law, 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,
Canada.
Because decisions of the Judicial Committee have persuasive value in the
United Kingdom, even when decided under the law of another member of the Commonwealth,
''Willers v Joyce and another''
016
HV-016 is a former military unit of Norway, that was a part of the Home Guard. It was established after 1985 to "stop terror- or sabotage actions that could weaken or paralyze Norway's ability to mobilize its military and its ability to resist".
...
UKSC 44, para. 12. this decision has been followed in the United Kingdom courts. 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.
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 service ...
. 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 business ...
(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 Hamilt ...
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 mon ...
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,
See also
* UK company law
Notes
{{reflist
References
*''North-West Transportation Co v Beatty'' (1887) 12 App Cas 589
*''Burland v Earle'' 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 ...
AC 83
Judicial Committee of the Privy Council cases on appeal from Canada
United Kingdom company case law
1916 in Canadian case law