C argued that it was implied term of articles of association that any inquiry into a member would be proper, efficacious and open to its members; and that therefore directors could be directly liable to shareholders for breach of this duty. Held:
· Directors do not have direct contractual relationship with members of company.
· Directors act on behalf of company
Ø And not on behalf of shareholders
Ø Thus the only duties they owe are to company
· Therefore directors cannot owe implied contractual duties to shareholders.