ABSTRACT
The ability of shareholders to authorise or ratify breach of directors’ duty is a complex topic, particularly in Australia due to an established line of cases that has restricted authorisation and ratification of breach of statutory duty. One category of cases where ratification has been denied at general law is where the breach involves misappropriation of company property. Cases in this category appear difficult to reconcile. However, an analogy with statutory proscriptions on improper use of position and of information from position has the potential to bring clarity to this category of cases and also helps explain when ratification by shareholders who are also directors will be ineffective, including in cases in which courts have denied ratification or authorisation of breach of statutory duty.
Langford, Rosemary Teele, Solving the Riddle of Ratification of Misappropriation of Company Property: A New Analogy (November 27, 2021). (2021) 15 Journal of Equity 233.
First posted 2022-01-07 12:00:10
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