Peskin v Anderson [2001] 1 BCLC 372

Court: Court of Appeal

Facts: The Royal Automobile Club Limited (RACL), a holding company for the club, decided to distribute property to its members, each receiving £34k. Members of the club, who were also shareholders in RACL, sued the board of RACL for breach of fiduciary duty, claiming that the board had mishandled the distribution.

Issue: Did the board of RACL breach its fiduciary duty by mishandling the distribution of property to its members?

Held: The claim was dismissed. The court found that there was no special relationship between the directors and the members that would give rise to a fiduciary duty that could be enforced.

Key Judicial Statement: Mummery LJ cited Percival v Wright [1902] 2 Ch 421, reaffirming that directors are not trustees for individual shareholders and may purchase shares without disclosing negotiations for a sale. The fiduciary duties owed by directors to the company do not automatically extend to individual shareholders except in special circumstances. Fiduciary duties to shareholders may arise from a special factual relationship, such as a direct and close contact between directors and shareholders, which could generate additional duties such as disclosure of material facts or the handling of confidential information.

💡 Leveluplaw: Directors’ fiduciary duties are primarily owed to the company, not individual shareholders, unless a special relationship exists. In cases where directors have a direct and personal connection with shareholders, or where directors induce shareholders to part with shares at an undervalue, additional fiduciary duties may arise.