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Case briefing: Stock v Pantrust

Facts

Directors of St. John’s Manor Ltd accepted a secured loan from Pantrust, which co belonged to one of them, and the disclosure of this director’s conflict of interest was found to be manifestly inadequate.

Decision

The court declined to exercise its discretion to set Pantrust’s security aside, holding that the requirements of CJL Art 76 had not been met because there were third parties lenders behind Pantrust who would thereby lose out and because it was not claimed the loan made was neither reasonable or fair.

Principle

Breaching rules about declaring conflicts of interest need not always be fatal if you can get within the statutory qualifications to the rule.