The Court of Appeal gave judgment earlier today in Sharma v Sharma & Ors [2013] EWCA Civ 1287. At first instance it was held that a director of a dental company was not in breach of duty by acquiring certain dental practices for her own benefit rather than for the company. An appeal was made and unanimously dismissed by the Court of Appeal. Lord Justice Jackson (Floyd and McCombe LJJ concurring) found that the director's acquisition of the practices had taken place with the knowledge and acquiescence of the shareholders; she was not, therefore, liable for breach of the no-conflict rule (now found in section 175 of the Companies Act 2006). His Lordship's judgment is important because of what he says about consent, acquiescence and silence on the part of shareholders. He stated:"When a court is considering what, if anything, can be inferred from a party's silence, the factual context is a matter of critical importance. If the surrounding circumstances are such that it would be unconscionable for a party to remain silent at the time and only raise his objections later, then I would have thought that assent can be inferred from silence" (para. [49]).
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