UK: England and Wales: when will directors owe a fiduciary duty to shareholders?

Judgment was handed down today in Vald. Nielsen Holding A/S Newwatch Ltd v Baldorino & Ors [2019] EWHC 1926 (Comm). The decision is noteworthy because of the analysis it provides of the circumstances in which directors will owe fiduciary duties towards shareholders.

The claimants' argument that fiduciary duties were owed, which relied heavily on the Australian decision Brunninghausen v Glavanics [1999] NSWCA 199, was rejected and, at the end of his analysis, the trial judge (Jacobs J) stated (at para. [746]):

Overall, it seems to me that the circumstances in which a fiduciary duty will usually be held to exist are well-summarised by Nugee J. at [13] of [Sharp v Blank [2015] EWHC 3220 (Ch)]: the cases where such duty has been held to exist mostly concern companies which are small and closely held, where there is often a family or other personal relationship between the parties, and where, in almost all cases, there is a particular transaction involved in which directors are dealing with the shareholders".