Facts: The chief executive officer of the company, Mr Saunders, encouraged some of his director colleagues or CEO colleagues in other companies, to engage in purchases of the company shares in order to push up the price of the shares on the market. This was because the takeover bid was made and it would have been much more difficult to buy the shares when its price is going up considerably. Thus, this is a wrongful way of defeating a takeover bid. a director who was also the company’s lawyer was given a bonus by a committee of the Board for devising a poison pill to defeat a potential takeover of the company- the Board was supposed to make any such award. The bonus paid was 2.4 million.
Issue: Breach of fiduciary duties?
Held: He was found to be in breach of fiduciary duties and the equitable remedy for this was that the lawyer had to give the money back to the company on the basis of constructive trusteeship doctrine. The money was never recovered because the lawyer put the money in the foreign bank account immediately after receiving it.