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Plus Group v Pyke

[2003] BCC 332

Case summary last updated at 22/01/2020 18:04 by the Oxbridge Notes in-house law team.

Judgement for the case Plus Group v Pyke

D was a director of a company (C), in which him and another person owned 50% of shares. After dispute with other director, D was excluded from running of C. A former client of C made it be known they no longer wished to work with C, and D set up a rival company which started doing work for that former client. Case was pre-section 175, thus C alleged D had breached his fiduciary duties not to act in conflict with interests of C. Held:
 
1)     Is BREACH wherecompany for whomDworks has made it clear it will no longer work for company of which D is a director
-        i.e. fact that C has taken an opportunity which would not have been available to company of which he is director irrelevant
2)     Is NO BREACH where D works for a competing company after he has been effectively excluded from the company of which he is director
-        i.e. here, D’s fiduciary duty to C is practically non-existent
-        D has no say in how company of which he is a director is run
3)     Thus on facts wasno breach of fiduciary duty by D.
 
Sedley LJ
Competing Directorships
1)     Was uneasy at idea that someone can be director of two competing companies.
Ø  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 hiscompany.
·       Here, director is under duty to pay over to company any money earned from opportunity.
Ø  i.e. liability of director seems to be personal, not proprietary

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