''Cook v Deeks'' UKPC 10
is a Canadian company law">916
UKPC 10
is a Canadian company law case, relevant also to

UK company law British company law regulates corporations formed under the Companies Act 2006. Also governed by the Insolvency Act 1986, the UK Corporate Governance Code, European Union Directive (European Union), Directives and court cases, the company is th ...

, concerning the illegitimate diversion of a corporate opportunity. It was decided by the Judicial Committee of the Privy Council, at that time the court of last resort within the British Empire, on appeal from the Appellate Division of the Supreme Court of

Ontario Ontario is the southernmost Provinces and territories of Canada, province of Canada. Located in Central Canada, Ontario is the Population of Canada by province and territory, country's most populous province. As of the 2021 Canadian census, it ...

Canada Canada is a country in North America. Its Provinces and territories of Canada, ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, making it the world's List of coun ...

. Because decisions of the Judicial Committee have persuasive value in the

United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Northwestern Europe, off the coast of European mainland, the continental mainland. It comprises England, Scotlan ...

, even when decided under the law of another member of the Commonwealth,''Willers v Joyce and another''
016UKSC 44, para. 12. this decision has been followed in the United Kingdom courts. In

, the case would now be seen as falling within 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 ...

section 175, with a failure to have ratification of breach by independent shareholders under section 239.

Facts

The Toronto Construction Co. had four directors, GM Deeks, GS Deeks, Hinds, and Cook. It helped in the construction of railways in Canada. The first three directors wanted to exclude Cook from the business. Each held a quarter of the company's shares. GM Deeks, GS Deeks, and Hinds took a contract with the Canadian Pacific Railway Company (for building a line at the Guelph Junction and

Hamilton Hamilton may refer to: * Alexander Hamilton (1755/1757–1804), first U.S. Secretary of the Treasury and one of the Founding Fathers of the United States * ''Hamilton'' (musical), a 2015 Broadway musical by Lin-Manuel Miranda ** ''Hamilton'' (al ...

branch) in their own names. They then passed a shareholder resolution declaring that the company had no interest in the contract. Cook claimed that the contract did belong to the Toronto Construction Co and the shareholder resolution ratifying their actions should not be valid because the three directors used their votes to carry it.

Decision

The Privy Council advised that the three directors had breached their duty of loyalty to the company, that the shareholder ratification was a fraud on Mr Cook as a minority shareholder, and invalid. Giving the advice, The Lord Chancellor, Lord Buckmaster held the result was that the profits made on the contractual opportunity were to be held on trust for the Toronto Construction Co. Lord Buckmaster said that the three had,

Notes

{{reflist

References

*''North-West Transportation Co v Beatty'' (1887) 12 App Cas 589 *''Burland v Earle''

902 __NOTOC__ Year 902 (Roman numerals, CMII) was a common year starting on Friday of the Julian calendar. Events By place Europe * Spring – Adalbert II, Margrave of Tuscany, Adalbert II, margrave of March of Tuscany, Tuscany, revol ...

AC 83 Judicial Committee of the Privy Council cases on appeal from Canada United Kingdom company case law 1916 in Canadian case law

Facts

Decision

See also

Notes

References