''Estmanco (Kilner House) Ltd v Greater London Council'' 9821 WLR 2 is a UK company law and UK insolvency law case concerning derivative claims. It held that majority voting power cannot be used to stultify the purposes for which the company was formed, although the result has to be read in light of the new

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' ...

and

derivative claim A shareholder derivative suit is a lawsuit brought by a shareholder on behalf of a corporation against a third party. Often, the third party is an insider of the corporation, such as an executive officer or director. Shareholder derivative suits a ...

codified in 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 largely ...

sections 172 and 260-26.

Facts

Ms Frances Mary Cope had bought a flat in a refurbished housing block, Kilner House Clayton St,

London London is the capital and largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary down to the North Sea, and has been a majo ...

SE11 5SE, that had been owned by the

Greater London Council The Greater London Council (GLC) was the top-tier local government administrative body for Greater London from 1965 to 1986. It replaced the earlier London County Council (LCC) which had covered a much smaller area. The GLC was dissolved in 198 ...

until the

Conservative Party The Conservative Party is a name used by many political parties around the world. These political parties are generally right-wing though their exact ideologies can range from center-right to far-right. Political parties called The Conservative P ...

began its right to buy policy of privatising council housing. Estmanco (Kilner House) Ltd was set up to hold properties, and allot to each buyer a share, but with the GLC retaining all voting rights until the last flat was sold. Then the Labour Party won the election, and halted the privatisation policy. Ms Cope requested permission to bring a derivative claim for herself and other people who had bought their flats, alleging that the directors (now effectively the Labour administration of the GLC) breached their duty to act for proper purposes.

Judgment

Sir

Robert Megarry Sir Robert Edgar Megarry, PC, FBA (1 June 1910 – 11 October 2006) was an eminent British lawyer and judge. Originally a solicitor, he requalified as a barrister and also pursued a parallel career as a legal academic. He later became a High ...

VC held that the derivative claim could continue, and the Greater London Council could not use its voting power to permanently prevent other shareholders acquiring voting rights, as that would undermine the purpose for which the company was formed. This would be a fraud on the minority, according to '' Foss v Harbottle'' and ''

Daniels v Daniels Daniels or Daniel's may refer to: People * Daniels (surname) * Daniels (given name) * Daniels (directors), Daniel Scheinert and Daniel Kwan, a pair of directors Places United States * Daniels, Maryland, a former town **Daniels Mill (Daniels, Mar ...

''.

978 Year 978 ( CMLXXVIII) was a common year starting on Tuesday (link will display the full calendar) of the Julian calendar. Events By place Byzantine Empire * Battle of Pankaleia: Rebel forces under General Bardas Skleros are defeated ...

Ch 406

Notes

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References

* United Kingdom company case law High Court of Justice cases 1982 in United Kingdom case law

Facts

Judgment

See also

Notes

References