Plus Group v Pyke [2003] BCC 332

• Defendant was a director of a company (Claimant), in which him and another person owned 50% of shares.

• After dispute with other director, Defendant was excluded from running of Claimant. A former client of Claimant made it be known they no longer wished to work with Claimant, and Defendant set up a rival company which started doing work for that former client.

• Case was pre-section 175, thus Claimant alleged Defendant had breached his fiduciary duties not to act in conflict with interests of Claimant.

Held

1. Is a breach where company for whom works has made it clear it will no longer work for company of which Defendant is a director

   • I.e. fact that Claimant has taken an opportunity which would not have been available to company of which he is director irrelevant

2. Is no breach where Defendant works for a competing company after he has been effectively excluded from the company of which he is director

   • i.e. here, Defendant’s fiduciary duty to Claimant is practically non-existent

   • Defendant has no say in how company of which he is a director is run

3. Thus on facts there was no breach of fiduciary duty by Defendant.

Sedley LJ

• Competing Directorships

  1. Was uneasy at idea that someone can be director of two competing companies.

     • i.e. Mashonaland requires reconsideration in light of modern standards.

  2. Judgments as to whether director has conflict of interests are fact-specific

Brooke LJ

• Nature of Liability

  • Is breach of “no-profit rule” where director uses information, property or opportunities which belong to his company.

  • Here, director is under duty to pay over to company any money earned from opportunity.

    • i.e. liability of director seems to be personal, not proprietary

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• Mashonaland