Sharp & Ors v Blank & Ors

Sharp & Ors v Blank & Ors

Directors of a company do not, by virtue of their office, owe fiduciary duties to shareholders except in special circumstances involving a special factual relationship. In the present case, the only duty owed was the duty to provide sufficient information for shareholders to make an informed decision at the EGM. The additional fiduciary and tortious duties pleaded by the Claimants disclosed no reasonable grounds for bringing the claim and were struck out.

Parties
Claimants: Sharp & Others; Defendants: Blank & Others
Jurisdiction
England and Wales
Judgment Date
12 November 2015
Procedural Posture
Civil / Interlocutory Application for Summary Judgment And/or Strike Out
Outcome
Application granted in part; certain paragraphs of the Particulars of Claim struck out under CPR 3.4(2)(a)
Legal Topics
Directors' Duties, Fiduciary Duties, Duty of Care, Shareholder Rights, Strike Out Applications
Company Law Equity Directors' Duties Fiduciary Duties Duty of Care Shareholder Rights Strike Out Applications

Case Brief

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Parties

Sharp & Others

Claimants

Blank & Others

Defendants

Procedural Posture

Civil / Interlocutory Application for Summary Judgment And/or Strike Out

Legal Issues

  1. 1 Whether directors of a company owe fiduciary duties to shareholders beyond the duty to provide sufficient information for decision-making at an EGM
  2. 2 Whether the pleaded duties in the Particulars of Claim disclose reasonable grounds for bringing the claim
  3. 3 Whether certain paragraphs of the Particulars of Claim should be struck out

Ratio Decidendi

Directors of a company do not, by virtue of their office, owe fiduciary duties to shareholders except in special circumstances involving a special factual relationship. In the present case, the only duty owed was the duty to provide sufficient information for shareholders to make an informed decision at the EGM. The additional fiduciary and tortious duties pleaded by the Claimants disclosed no reasonable grounds for bringing the claim and were struck out.

Court Disposition

Application granted in part; certain paragraphs of the Particulars of Claim struck out under CPR 3.4(2)(a)

Orders

  • Paragraph 40(5) to be deleted and replaced with a statement that the duties in paragraph 40(1)-(4) include duties in respect of the kinds of losses claimed.
  • Paragraphs 39(1), 39(2), 39(4), and 39(5) struck out.