is a leading

UK company law The United Kingdom company law regulates corporations formed under the Companies Act 2006. Also governed by the Insolvency Act 1986, the UK Corporate Governance Code, European Union Directives and court cases, the company is the primary lega ...

case on the principle that directors must avoid any possibility of a conflict of interest, particular relating to

corporate opportunities The ''corporate opportunity'' doctrine is the legal principle providing that directors, officers, and controlling shareholders of a corporation must not take for themselves any business opportunity that could benefit the corporation. The corporat ...

. It was not decided under, but is relevant to, section 175 of the

Companies Act 2006 The Companies Act 2006 (c 46) is an Act of the Parliament of the United Kingdom which forms the primary source of UK company law. The Act was brought into force in stages, with the final provision being commenced on 1 October 2009. It largel ...

Facts

Bhullar Bros Ltd was owned by families of two brothers. Each side owned 50% of ordinary shares. The directors were Mr Mohan Bhullar, his son Tim, Mr Sohan Bhullar and his sons Inderjit and Jatinderjit. The company had a

grocery A grocery store ( AE), grocery shop ( BE) or simply grocery is a store that primarily retails a general range of food products, which may be fresh or packaged. In everyday U.S. usage, however, "grocery store" is a synonym for supermarket, a ...

store at 44 Springwood Street,

Huddersfield Huddersfield is a market town in the Kirklees district in West Yorkshire, England. It is the administrative centre and largest settlement in the Kirklees district. The town is in the foothills of the Pennines. The River Holme's confluence into t ...

. It also owned an investment property called Springbank Works, Leeds Road, which was

lease A lease is a contractual arrangement calling for the user (referred to as the ''lessee'') to pay the owner (referred to as the ''lessor'') for the use of an asset. Property, buildings and vehicles are common assets that are leased. Industr ...

d to a

bowling alley A bowling alley (also known as a bowling center, bowling lounge, bowling arena, or historically bowling club) is a facility where the sport of bowling is played. It can be a dedicated facility or part of another, such as a clubhouse or dwelling ...

business called

UK Superbowl Ltd The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and North ...

. In 1998 the families began to fall out. Mohan and Tim told the board they wished for the company to buy no further investment properties. Negotiations began to split up the company, but they were unsuccessful. In 1999, Inderjit went bowling at the UK Superbowl Ltd alley. He noticed that the carpark next door (called White Hall Mill) was on sale.nb UK Superbowl Ltd was also leasing the carpark property, but was not the owner. He set up a company called Silvercrest Ltd (owned by him and Jatinderjit) and bought, but did not tell Bhullar Bros Ltd. But Mohan and Tim found out and brought an

unfair prejudice Unfair prejudice in United Kingdom, company law is a statutory form of action that may be brought by aggrieved shareholders against their company. Under the Companies Act 2006 the relevant provision is s 994, the identical successor to s 459 Comp ...

claim (now s 994

) on the basis that Inderjit and Jatinderjit had breached their fiduciary duty of loyalty to the company.

Judgment

Jonathan Parker LJ held that there was a clear breach of the rule that directors must avoid a conflict of interest. Brooke LJ and

Schiemann LJ Sir Konrad Hermann Theodor Schiemann, PC (born 15 September 1937) is a former German-British barrister and judge. He served on the Court of Appeal, and he was also a member of the Court of Justice of the European Union. Schiemann was born in Ber ...

concurred.

'' EWHC Ch J76
*''Whelpdale v Cookson">726
EWHC Ch J76
*''Whelpdale v Cookson'' (1747) 1 Ves Sen 9; 27 ER 856 *''Aberdeen Railway Co v Blaikie Brothers'' [1843–60] All ER Rep 252, self dealing case *''Parker v McKenna'' (1874–75) LR 10 Ch App 96, per James LJ that the rule is necessary for "the safety of mankind" *''Bray v Ford'' [1896] AC 44 at 51-52, per Lord Herschell, the no possibility of conflict rule is "based upon the consideration that, human nature being what it is, there is danger of the person holding a fiduciary position being swayed by interest rather than duty…." *''

Regal (Hastings) Ltd v Gulliver , is a leading case in UK company law regarding the rule against directors and officers from taking personal advantage of a corporate opportunity in violation of their duty of loyalty to the company. The Court held that a director is in breach ...

967 Year 967 ( CMLXVII) was a common year starting on Tuesday (link will display the full calendar) of the Julian calendar. Events By place Europe * Spring – Emperor Otto I (the Great) calls for a council at Rome, to present the n ...

2 AC 134n *''

Boardman v Phipps ''Boardman v Phipps'' 966UKHL 2is a landmark English trusts law case concerning the duty of loyalty and the duty to avoid conflicts of interest. Facts Tom Boardman, Baron Boardman, Mr Tom Boardman was the solicitor of a family trust.See the cas ...

2 AC 46 *'' Industrial Development Consultants v Cooley''

972 Year 972 ( CMLXXII) was a leap year starting on Monday (link will display the full calendar) of the Julian calendar. Events By place Byzantine Empire * Spring – Emperor John I Tzimiskes divides the Bulgarian territories, recent ...

1 WLR 443 *''

Canadian Aero Service Ltd. v. O'Malley ''Canadian Aero Service Ltd v O'Malley'', 974SCR 592, is a leading civil case decided by the Supreme Court of Canada on corporate director and officer liability. Facts Canadian Aero Service Ltd. ("Canaero") was a company whose main business was ...

'' (1973) 40 DLR (3d) 371

Notes

{{reflist, 2

References

External links

*Obituary
'Sohan Singh Bhullar Founder of thriving business and community leader'
(9.9.2008) Huddersfield Daily Examiner United Kingdom company case law Court of Appeal (England and Wales) cases 2003 in case law 2003 in British law

Facts

Judgment

See also

Notes

References

External links