Eclairs Company Case PDF

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I nt r oduct i on I ti snotonl yt hedut yoft hedi r ect ort oac twi t hi nt hes c opeofi t spower ,but al s oex er c i s et hepowerf or“ pr operpur pos e” .Thepr operpur pos er ul ei scodi fi edi n Sec t i on171( b)oft heCompanyAc t2006( CA) .Thecas eofEc l ai r sGr oupLt dvJKX Oi l &GasPl c1i sal eadi ngc asei nt hepr operpur pos et es t . TheFact s Thedi r ect or sofJ KXOi l ,t her espondentoft hi sc ase,per c ei v edt hatt he c ompanyhadbecomet het ar getof“ cor por at er ai ds ”byi t ss har ehol der s ,Ec l ai r sand Gl engar y ,t heappel l antoft hi sc as e.Ther ef or e,t hedi r ect or si s s ueddi s cl os ur e 2 not i c es,apowerc onf er r edbyt heAr t i c l e42oft hecons t i t ut i onofJ KXOi l&Gaspl c . Thedi r ect or s ,bel i ev i ngt hatt hei nf or mat i onf r om t hes har ehol der si si ncor r ec t , r es t r i c t edt hes har ehol der s ’v ot i ngr i ght si nt heAnnualGener al Meet i ngal s o 3 pr ev ent edt heshar ehol der sf r om i nfl uenci ngt heout comeoft hemeet i n g T . he appel l ants oughtt hatt her es pondentwasex er c i si ngi t spowerf orani mpr oper pur pos e. ThePr ocedur alHi st or y I nt heHi ghCour t ,t hec our tr ul edi nt heappel l ant ’ sf av our ,r ul i ngt hatt he 4 r es pondentex er c i sedt hepowerf orani mpr operpur pos e. I nt heCour tofAppeal ,t hec our tr ul edt hatt hepr operpur pos et es twasnot appl i c abl ebecaus et her es pondent sc anav oi dt her es t r i c t i onbyc ompl y i ngt he 5 di s c l os ur enot i c es .TheCour tofAppealdi s t i ngui s hedi tf r om t hecas eofHowar d Smi t hLt dvAmpolPet r ol eum Lt d6andr ul edt hatt hepr operpur pos er ul ewasnot appl i c abl et ononuni l at er alpowerwhi l eappl yi ngt hepr operpur pos er ul ewi l l 7 under mi net hepoweroft hec ompany ’ ss t at ut or yi ns t r ument .Theappel l antappeal ed t ot heSupr emeCour tont hegr oundst hatt hepr operpur pos et es twasappl i c abl e. TheRul i ngoft heSupr emeCour t TheSupr emecour tal l owedt heappealanddi s mi s s edt her est r i c t i ons . 1.Doest hepr operpur poser ul eappl i cabl et ot hecase? Ac cor di ngt oLor dSumpt i on,t her ewer enoaut hor i t yi nr el at i ont ot he di s t i nc t i onbet weenuni l at er alandnonuni l at er alpower .Fur t her mor e,henot edt hat 8 t her ewasi mbal anc eofpower . Lor dSumpt i onc l ar i fi edt hatt hepr operpur poser ul ei sanequi t abl epr i nc i pl e 9 t hatc ont r olt heex er c i s eofafi duc i ar y ’ spower s O .ncont r ar yt ot heCour tofAppeal ’ s j udgment ,Lor dSumpt i onnot edt hatpr operpur pos er ul ewasappl i c abl ei nt he s i t uat i onofabat t l ef orc ont r oloft hec ompanybec aus et hedi r ect or swi l lt endt ous e 10 t hei rpower st ot akecont r oloft hecompany . 1[ 2015]UKSC[ 71] . 2 Sect i on793797ofTheCompanyAc t2006. 3 Ar t i cl e42pr ovi dedt hedi r ect or spowert or es t r i ctv ot i ngr i ght s. 4 Ecl ai r sGr oupLt dvJKXOi l&GasPl c[ 2013]EWHC2631( Ch) . 5 Ecl ai r sGr oupLt dvJKXOi l&GasPl c[ 2014]EWCACi v640. 6[ 1974]AC821. 7 Ecl ai r s( n5)[ 142] . 8 Ecl ai r s( n1)[ 39] . 9 Ecl ai r s( n1)[ 30] . 10 Ecl ai r s( n1)[ 37] .

2.I dent i f yi ngt hepr operpur pose. Ev ent hought hepur pos eofapowerwasr ar el yex pr es s ed I twasof t enobvi ousf r om t hec ont ex t .Byex ami ni ngt hec ont ex toft heAr t i c l e42,t he c our twasabl et oi dent i f y3pur pos esoft hepr ov i si onwhi l enoneoft he3pur pos es 11 i nv ol v edi nfl uenc i ngoft hemeet i n g. Ther ef or e,t hec our tr ul edt hatt her es pondent ’ s pur pos ewasi mpr oper . 3.Obi t er :Mi xedpur poses. Lor dSumpt i ons ugges t edanal t er nat i v e“ butf or ”t es ti ns t eadoft he “ wei ght i est ”pur poset es t .Ac c or di ngt oLor dSumpt i on,anew“ butf or ”t es ti sa s i mpl ert es twhi l eal s oi nac c or dancet ot hesubst ant i alpur pos et es ti nHowar d 12 Smi t h .Howev er ,ot herj udgesr ef us edt ogi v efinalc oncl us i onasi ti snott hes ubj ect 13 off ul l ar gumentandconsi der at i on. Anal ysi s I nt hes i t uat i onofmi x edpur pos es ,i ti sunj us tt oappl ys ubj ec t i v et es tona di r ec t or ’ sdec i si onmaki ngpr oces sasdi ffer enti ndi v i dualwi l lmak edi ffer entdec i s i on i nt hesames i t uat i on.Ther ewi l lal way sbeapr operpur pos ebehi ndev er ydec i s i oni f t hedi r ect ori sac t i ngwi t hi ni t spowerandv i c ev er s a.Aspoi nt edoutbyWor t hi ngt on, i ft hedi r ect or semphas i z edont hei rpr operpur poses ,t hec our tmi ghtbeunabl et o 14 pr ov et hei mpr operpur posei nt hec as e. Mor eov er ,i ti swor t hnot i ngt hatt hebutf ort es tmaynotbeappl i c abl ei ns ome c i r c ums t anc es .Byappl y i ngt hebutf ort es ti nt heEcl ai r s ,t hedi r ect or smi ghts t i l l i s s uet her es t r i c t i onwi t houtt hei mpr operpur pos e.Ac c or di ngt oPol l ar d,t he c aus at i ont es twi l lev ent ual l yl eadt oadef enc ei ft hedi r ec t or swer eabl et opr ov et hat 15 t heywoul dhav er eac ht hedeci s i onr egar dl es soft hei mpr operpur pos e. I nt hi scas e,al t hought hedi r ect or sar ei nbr eac hofs ect i on171( b)ofCA2006, i tc anbear guedt hatt heyar ef ul fi l l i ngt hei rdut i esunders ec t i on172ofCA2006 whi c hi spr omot et hes ucc es soft hecompany .Whenbot hdut i esar eov er l appi ng,t he c our tc l ear l yt ookf av ourofs ect i on171( b)ov er172.Thec our tal s oemphas i z edt hat 16 t heshar ehol der sar eent i t l edt oac ti nt hei rper s onali nt er es t . Fur t her mor e,t hec our tdi dnotgi v eac l eari nt er pr et at i onoft hes ect i on171( b) CA2006.I nt hec aseofmi x edpur pos es ,anar r owi nt er pr et at i onofs ect i on171( b) wi l lpr ev entdi r ec t or sf r om ex er c i s i ngpowerwi t hmi x edpur pos es .Subs equent l y ,t hi s wi l lf ur t herr es t r i c tt hedi r ect or s ’aut onomy .Aspoi nt edoutbyNol an,i ti sl i k el yt hat 17 s ect i on171( b)al l owmi x edpur posesasi twasmeantt oc odi f yt heex i s t i ngl aw. Unf or t unat el y ,t hec our tc r eat edunc er t ai nt yast hecour tdi dnotdec i deonas i ngl e appl i c abl et es tonmi x edpur pos es . Concl usi on I nt hi scas e,t heSupr emeCour tr eaffir medt hepr i nc i pl eofpr operpur pos e r ul e.TheSupr emeCour tc l ar i fiedt hes c opeofpr operpur pos er ul eandpr ov i ded 11 Ecl ai r s( n1)[ 32] . 12 Ecl ai r s( n1)[ 23[ 24] . 13 Ecl ai r s( n1)[ 46] . 14 Sar ahWor t hi ngt on,‘ Di r ect or s ’ Dut i esandI mpr operPur poses ’ ( 2016)75Cambr i dgeLJ213,214. 15 Davi dPol l ar d,‘ Ex er ci si ngpower s:pr operpur pos esr at hert hanbesti nt er es t s :fiduci ar i esand Ec l ai r s ’ ( 2016)30( 2)Tr u.L. I .71,97. 16 Ecl ai r s( n1)[ 40] , Seeal soExt r as ur eTr av el I nsur anceLt dvScat t er good[ 2003]1BCLC598. 17 Ri char dNol an,‘ Pr operPur pos esi nt heSupr emeCour t ’( 2016)132LQR369,371.

f ur t hergui dancef ort hepr operpur pos et es t .I ti sf ort hef ut ur ec our tt odec i dewhi c h mi x edpur pos edt es twi l l beadapt ed.

Bi bl i ogr aphy

Books Davi esPandot her s,Gower ' sPr i nc i pl esOfModer nCompanyLaw. Ker shawD,CompanyLawI nCont ex t( Ox f or dUni v er si t yPr es s2012) . McLaughl i nS,Unl oc ki ngCompanyLaw( 2018) .

Jour nal s Davi dPol l ar d,‘ Ex er ci s i ngpower s :pr operpur posesr at hert hanbesti nt er es t s:fi duci ar i esandEcl ai r s ’ ( 2016)30( 2)Tr u.L. I .71. Ri char dNol an,‘ Pr operPur posesi nt heSupr emeCour t ’( 2016)132LQR369. Sar ahWor t hi ngt on,‘ Di r ect or s ’ Dut i esandI mpr operPur pos es ’ ( 2016)75Cambr i dgeLJ213.

Legi sl at i on CompanyAc t2006

Cases Ec l ai r sGr oupLt dvJ KXOi l &GasPl c[ 2013]EWHC2631( Ch) . Ec l ai r sGr oupLt dvJ KXOi l &GasPl c[ 2014]EWCACi v640. Ec l ai r sGr oupLt dvJ KXOi l &GasPl c[ 2015UKSC[ 71] . Ex t r as ur eTr av elI ns ur anceLt dvSc at t er good[ 2003]1BCLC598. Howar dSmi t hLt dvAmpolPet r ol eum [ 1974]AC821....