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8 Cards in this Set
- Front
- Back
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Intro |
A company need only have a single member, but must have 2 directors (s174). S45 states that a director may not be the director of more than one company. A person must consent to being a director, which causes problems where infants are put forward as directors. A body corporate may not be a director. A director is an office holder and not an employee. |
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De Facto Directors |
Defined by s2 as "any person occupying the position of director by whatever name called" Re Hydrodam Corby Ltd someone not formally appointed who undertook functions in relation to the company which could only be properly discharged if he was a director Sec for Trade v Tjolle 3 critera Re Mea Corp consider not what he called himself but what he did Re Lynrowan Enterprises liable for s150 restrictions Dowall v Cullen "person occupying the position of a director although never formally appointed as so but nonetheless continued to act in the capacity of a director" Gray v McLoughlin accepted Tjolle criteria |
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Shadow Directors |
S27 "a person in accordance with whose directions or instructions the directors of a company are accustomed to act" In re Worldport body corporate could be a SD Fyffes v DCC "person" can be company unless contrary intention appears Dowall v Cullen needed directions/instructions to be given and the true directors must have been accustomed to act upon such |
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To Whom Are Duties Owed |
Percival v Wright 1 master of directors, company. If they had told shareholders about takeover bid it would have jeopardised negotiations Dawson International co directors are entitled to act in a way disadvantageous to shareholders Allen v Hyatt directors did not enclose they were making a personal profit and so held it on constructive trust Coleman v Myers same principle, where relationship of trust and confidence and reliance on directors Crindle Investments dependence of info by shareholders, significance of transaction and positive action by director to promote it, and a relationship of confidence Brunninghausen 2 directors, 1 became inactive. No relationship of confidence Kinsella v Russell Kinsella Prop at insolvency, duty to creditors and shareholders have no stake Parkes v HK guarantee given was uv as insolvent |
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General Common Law Duties |
-Act in Good Faith -Avoid Conflicts of Interest -Act With Due Skill, Care and Diligence |
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Acting Bona Fide |
Re Smith &Fawsett Ltd directors must exercise their discretion bona fide in what they consider, not what the courts may consider, the best interests of the company Regent Crest plc v Cohen look at whether the director honestly believed that his act or omission was in the interests of the company Nash v Lancegaye Safety Glass allotment of 15000 pref shares to ensure certain people in control of the co, no bona fide. Set aside Cockburn v Newbridge Steam Laundry the bribes taken were illegal and could not be ratified Howard Smyth v Ampol Petrol primary reason for action was to prevent takeover bid and therefore invalid Re Jermyn Street Turkish Baths allotment of shares for control was vital for the survival of the company Clark v Workman fettering of a discretion, invalid Fulham Football v Cabra Estates fettering ok when in the best interests of the company |
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Conflicts of Interest |
Judged objectively and intentions of the directors are irrelevant Regal Hastings v Gulliver cinema leased, put forward own money, did not disclose profit, held on CT for shareholders IDC v Cooley feigned illness to get out of employment and take on contract at a personal level. Sued for breach of duty Irish Microfarms v Browne plaintiff director of competing co and misapplied the funds, facility and manpower to benefit other company Springrove Services "there is a duty not to compete with the company particularly when you are privy to confidential info" Peso Silvermines v Cropper 'business chance exception' Gencor v Dalby sold second-hand equipment under co name and resources, claimed co could not have benefitted, rejected. |
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Duty of Care, Skill and Diligence |
Re City Equitable Fire Ins est this duty. Subjective test based on knowledge and experience, can delegate, need only attend board meeting 'regularly' Dorchester Finance v Stebbing if particular skill or ability, expected to exercise it, irrespective of whether non-exec (accounting backgrounds) Jackson v Munster Bank bank lent money to directors, although prohibited. Director liable in Dublin as shown letter re Cork Re Huntings Lodges fraudulent practises, a person who becomes director takes on responsibilities and duties and they should take steps to find out what's going on in the co Re Vehicle Imports proper book of accounts is a joint obligation on all directors Re Barings proposed; continuing duty to acquire and maintain sufficient knowledge, power of delegation does not absolve from a duty to supervise, duty to supervise depends on facts of case |
