Monday 3 August 2020

New Zealand: Court of Appeal - fiduciary duties and shareholders

The Court of Appeal gave judgment last Friday in Dold v Murphy [2020] NZCA 313: see here (pdf). The decision is of note because of the discussion it contains concerning the circumstances in which a shareholder (or shareholders) would owe fiduciary duties to each other. The President stated (at para. [59]): 
... the proposition that shareholders owe fiduciary duties generally to one another would represent a surprising development, and one we think contrary to principle. With certain statutory exceptions — most notably relief against oppression under s 174 of the Companies Act 1993 — shareholders are entitled to act selfishly in their dealings with one another. That is the antithesis of fiduciary obligation. The fact that one shareholder’s actions may diminish the value of another’s shareholding does not mean there is a fiduciary obligation: impact on another’s worth is not enough ... The shareholder-shareholder relationship is not inherently fiduciary".

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