The Proper Purpose Rule as a Constraint on Directors’ Autonomy – Eclairs Group Limited v JKX Oil & Gas plc

11 Pages Posted: 7 Jan 2017

See all articles by Rosemary Teele Langford

Rosemary Teele Langford

University of Melbourne - Law School

Ian Ramsay

Melbourne Law School - University of Melbourne

Multiple version iconThere are 2 versions of this paper

Date Written: January 2017

Abstract

The recent case of Eclairs Group Limited v JKX Oil & Gas plc highlights the pressures faced by company directors in change of control situations, in which they may be tempted to take action to prevent or discourage such change. The Supreme Court decision provides important clarity on the scope of the proper purpose rule in these (and other) situations. We explore the implications of different judicial interpretations of the proper purpose rule for the autonomy of directors in their decision‐making. We do this by focusing on the scope of the proper purpose rule, whether a subjective or objective test is employed in the application of the rule and the test for causation where a director is motivated by mixed purposes.

Keywords: Directors’ duties, proper purpose, takeovers, company law, Companies Act 2006 (UK) s 171

Suggested Citation

Langford, Rosemary Teele and Ramsay, Ian, The Proper Purpose Rule as a Constraint on Directors’ Autonomy – Eclairs Group Limited v JKX Oil & Gas plc (January 2017). The Modern Law Review, Vol. 80, Issue 1, pp. 110-120, 2017, Available at SSRN: https://ssrn.com/abstract=2894642 or http://dx.doi.org/10.1111/1468-2230.12244

Rosemary Teele Langford (Contact Author)

University of Melbourne - Law School ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia

Ian Ramsay

Melbourne Law School - University of Melbourne ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia
+61 3 8344 5332 (Phone)

HOME PAGE: http://law.unimelb.edu.au/about/staff/ian-ramsay

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