Gerrard v Koby & Anor

Gerrard v Koby & Anor

Mr Koby, as a director and shareholder, acted in breach of fiduciary duty by diverting a corporate opportunity to Mr Ronson, concealing his involvement and interest, and forming a plan to profit from the transaction to the detriment of the Company and Mr Gerrard. This conduct was unfairly prejudicial to Mr Gerrard's interests as a member of the Company. The breakdown in relations and loss of mutual trust, foundational to the quasi-partnership, entitles Mr Gerrard to relief under section 461.

Parties
Petitioner: Michael Gerrard; First Respondent: Michael Koby; Second Respondent: Baumler (UK) Limited
Jurisdiction
England and Wales
Judgment Date
08 July 2004
Procedural Posture
Petition Under Companies Act 1985, S.459 (unfair Prejudice) / Judgment After Trial
Outcome
Petition allowed; relief in principle granted under section 461 of the Companies Act 1985.
Legal Topics
Unfair Prejudice, Director's Fiduciary Duties, Quasi Partnership, Corporate Opportunity, Shareholder Disputes
Company Law Unfair Prejudice Director's Fiduciary Duties Quasi Partnership Corporate Opportunity Shareholder Disputes

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 3 Authorities cited 4 Party arguments 2 Amounts and remedies 12
Sign in to unlock

Parties

Michael Gerrard

Petitioner

Michael Koby

First Respondent

Baumler (UK) Limited

Second Respondent

Procedural Posture

Petition Under Companies Act 1985, S.459 (unfair Prejudice) / Judgment After Trial

Legal Issues

  1. 1 Whether Mr Koby's conduct in relation to the purchase of the Property was unfairly prejudicial to Mr Gerrard's interests as a member of the Company under section 459 of the Companies Act 1985
  2. 2 Whether relief under section 461 should be granted and in what form

Ratio Decidendi

Mr Koby, as a director and shareholder, acted in breach of fiduciary duty by diverting a corporate opportunity to Mr Ronson, concealing his involvement and interest, and forming a plan to profit from the transaction to the detriment of the Company and Mr Gerrard. This conduct was unfairly prejudicial to Mr Gerrard's interests as a member of the Company. The breakdown in relations and loss of mutual trust, foundational to the quasi-partnership, entitles Mr Gerrard to relief under section 461.

Court Disposition

Petition allowed; relief in principle granted under section 461 of the Companies Act 1985.

Orders

  • A buy-out order is appropriate in principle; the parties are to be heard further as to the form of relief and implementation.