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Coleman v Myers

[1977] 2 NZLR 225

Case summary last updated at 22/01/2020 15:45 by the Oxbridge Notes in-house law team.

Judgement for the case Coleman v Myers

D was director of family company. D made offer to buy shares of other members of company, and invoked statutory power of compulsory purchase. C, other shareholders, brought action alleging breach of fiduciary duty owed by D to shareholders, in that D had not disclosed information relevant to true price of shares. Held:
·       Fact that directors’ duties are owed to company does not stop them coming to owe fiduciary duties to shareholders.
·       This may happen where:
i)         There is agency relationship
ii)        There is special factual relationship giving rise to fiduciary duty
·       On facts
Ø  Company was small family company
Ø  Shareholders heavily depended on D for information and advice
Ø  Transaction was significant
Ø  Information relevant to true price of shares had been withheld from shareholders
·       Thus special facts gave rise to fiduciary duty on part of D to make full disclosure
Ø  And D had breached this duty

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