No fiduciary duties between shareholders in a quasi-partnership (De Sena and others v Notaro)

Article summary

Commercial analysis: In a demerger transaction between shareholders in a family-run company, the defendant shareholder did not owe any fiduciary duties to the claimant shareholder. The transaction involved a commercial negotiation in which the parties had intrinsically opposed interests, and the recognition of fiduciary obligations was inconsistent with the nature of that transaction. The claimant’s claim for equitable compensation representing the alleged undervalue at which they had sold their shares in the company, or an account of profits, was dismissed. The court considered what was required for fiduciary obligations to arise between shareholders. In particular, it considered and rejected the claimant’s argument that fiduciary duties were appropriate because the company was in the nature of a quasi-partnership. Alternative claims in duress and unjust enrichment, and against the company’s accountants and solicitors (not raising a point of principle or considered in this note), also failed. Written by Seb Oram, barrister, at 3PB Barristers.