Industrial Development Consultants Ltd v Cooley [1972] 1 WLR 443 is a UK company law case on the corporate opportunities doctrine, and the duty of loyalty from the law of trusts.
Quick Facts Industrial Development Consultants Ltd v Cooley, Court ...
Industrial Development Consultants Ltd v Cooley |
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Court | High Court |
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Citation(s) | [1972] 1 WLR 443 |
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Judge(s) sitting | Roskill J |
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resigning director, conflict of interest, trusts, fiduciary duties |
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It is also applicable for fiduciary duty of an agent under agency law which states that an agent has a fiduciary relationship with his principal. This is a position which is similar to that of a trustee.
Roskill J. held that even though there was no chance of IDC getting the contract, if they had been told they would not have released him. So he was held accountable for the benefits he received. He rejected the argument that because he made it clear in his discussions with the Gas Board that he was speaking in a private capacity, Mr. Cooley was under no fiduciary duty. He had ‘one capacity and one capacity only in which he was carrying on business at that time. That capacity was as managing director of the plaintiffs.’ All information which came to him should have been passed on.
Roskill J, quoted, Parker v. MacKenna (1874) 10 Ch.App. 96, James L.J. said, at p. 124:
“I do not think it is necessary, but it appears to me very important, that we should concur in laying down again and again the general principle that in this court no agent in the course of his agency, in the matter of his agency, can be allowed to make any profit without the knowledge and consent of his principal; that that rule is an inflexible rule, and must be applied inexorably by this court, which is not entitled, in my judgment, to receive evidence, or suggestion, or argument as to whether the principal did or did not suffer any injury in fact by reason of the dealing of the agent; for the safety of mankind requires that no agent shall be able to put his principal to the danger of such an inquiry as that.”
Throughout the last century, and also in the present century, courts of the highest authority have always strictly applied this rule.