Burland v Earle [1902] AC 83 PC
In this case Mr. Burland, who was the President, director and manager of a company, purchased some assets from the liquidator of an insolvent company and later resold them at a significant profit to the company of which he was a managing director.
Held: He did not have to account for the profits - Lord Davey LJ stating - "There is no evidence whatever of any commission or mandate to Burland to purchase on behalf of the company, or that he was in any sense a trustee of the purchased property. It may be that he had an intention in his own mind to resell it to the company; but it was an intention which he was at liberty to carry out or abandon at his own will."
Lord Davey LJ also explained in this case the reasoning behind the rule in Foss v Harbottle, by saying that the right of shareholders to bring an action in their own names is a "mere matter of procedure" in order to provide an otherwise unavailable remedy: "It is obvious that in such an action the plaintiffs cannot have a larger right to relief than the company itself would have if it were plaintiff, and cannot complain of acts which are valid if done with the approval of the majority of the shareholders or are capable of being confirmed by the majority.”
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