Eastford Ltd v Gillespie & Anor [2010] ScotCS CSOH_132 (30 September 2010)

Eastford Ltd v Gillespie & Anor [2010] ScotCS CSOH_132 (30 September 2010)

On the facts averred, there was no real or sensible possibility of conflict of interest for Steven Gillespie and Gary Gillespie, as Eastford had no funds and they would be personally liable for expenses regardless of ratification. Therefore, they were not disqualified from voting on the board resolution to ratify the action.

Citation
[2010] ScotCS CSOH_132
Parties
Pursuer: Eastford Limited; First Defender: Thomas Graham Gillespie; Second Defender: Airdrie North Limited
Jurisdiction
Scotland
Judgment Date
30 September 2010
Procedural Posture
Civil / Debate on Relevancy and Motion to Dismiss
Outcome
motion for dismissal refused
Legal Topics
Director Conflict of Interest, Ratification of Director Acts, Fiduciary Duties, Board Resolutions
Company Law Corporate Governance Director Conflict of Interest Ratification of Director Acts Fiduciary Duties Board Resolutions

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Parties

Eastford Limited

Pursuer

Thomas Graham Gillespie

First Defender

Airdrie North Limited

Second Defender

Procedural Posture

Civil / Debate on Relevancy and Motion to Dismiss

Legal Issues

  1. 1 Whether directors were disqualified from voting on a board resolution due to conflict of interest
  2. 2 Whether the board's ratification of the action was valid under company law and the articles of association

Ratio Decidendi

On the facts averred, there was no real or sensible possibility of conflict of interest for Steven Gillespie and Gary Gillespie, as Eastford had no funds and they would be personally liable for expenses regardless of ratification. Therefore, they were not disqualified from voting on the board resolution to ratify the action.

Court Disposition

motion for dismissal refused

Orders

  • Case to be put out by order to determine further procedure