Coleman v Myers [1977] 2 NZLR 225

• Defendant was director of family company. Defendant made offer to buy shares of other members of company, and invoked statutory power of compulsory purchase.

• Claimant, other shareholders, brought action alleging breach of fiduciary duty owed by Defendant to shareholders, in that Defendant 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:

  1. There is agency relationship

  2. There is special factual relationship giving rise to fiduciary duty

Facts

• Company was small family company

• Shareholders heavily depended on Defendant for information and advice

• Transaction was significant

• 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, and Defendant had breached this duty