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Re Bhullar Brothers [2003] EWCA Civ 424

By Oxbridge Law TeamUpdated 04/01/2024 07:05

Judgement for the case Re Bhullar Brothers

Table Of Contents

  • Two brothers, along with their sons, were directors of a family company of grocery stores and investment property.

  • Two halves of family fell out, and began to divide up assets of company. However sons of one of brothers became aware that land adjoining a bowling alley owned by company was for sale; this discovery was completely fortuitous (had seen a β€˜for sale’ sign whilst bowling).

  • Sons wanted to buy land; asked their solicitor whether there were any legal difficulties, and he said no.

  • Bought land in their own names, and other half of family brought claim.

Parker LJ

  • No need to show that company would have made use of information:

    • Here, information was relevant to company - i.e. purchase of land would have been commercially attractive

  • Thus sons were under duty to communicate information to company

  • Thus is irrelevant that company would almost certainly not have taken the opportunity.

  • Thus was breach of fiduciary duty by sons, as they had used information that was in interests of company to make personal profit

Relevant Factors

  • At time sons purchased property, they were only carrying on business in their capacity as directors of company capacity alone, and not in any personal capacity

  • At time of purchase, company was still trading (albeit with negotiations for its break-up)

  • Sons had asked solicitor whether there were any legal reasons they could not purchase land for their own benefit

    • Thus is clear they felt there might be a conflict of interests

    • This seems to be key factor in decision.

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