Consequences of Breach

Abstract

This chapter provides an outline of the consequences of breach of the duties discussed in this book and, in particular, of the duty to avoid conflicts (the conflicts rule) at general law and under statute. This includes discussion of third party liability based on the rule in Barnes v Addy, which may be very valuable in certain circumstances. It highlights the available remedies, as well as issues arising in the framing and application of the remedies. It also draws attention to the role played by the unfair prejudice (or oppression) remedy in relation to directors’ conflicts. Given that this remedy is favoured by shareholders, and that a number of unfair prejudice cases concern directors’ conflicts, it is important to outline its contours. Indirect enforcement, and any significant differences in enforcement mechanisms between the jurisdictions, will be considered. The chapter does not provide a comprehensive outline in relation to all remedies or the detail of every aspect of the remedies discussed. There is, at times, clear divergence between the application of certain remedies in different jurisdictions—a complete and comprehensive comparative critical analysis of remedies would fill an entire book on its own.