Peso Silver Mines Ltd. (N.P.L.) v. Cropper
Encyclopedia
Peso Silver Mines Ltd. (N.P.L.) v. Cropper, [1966] S.C.R. 673, is a leading Canadian case decided by the Supreme Court of Canada
on the fiduciary duty of corporate directors.
The owner of a mineral claim offered to sell their claim to Peso Silver Mines Ltd. The board of directors
of Peso rejected the offer. Mr. Cropper, a member of the board, purchased the claim for himself. Learning of this, Peso sued Cropper for breach of his fiduciary duty towards the company for "seizing the corporate opportunity".
The Court found that Cropper was not in breach of his fiduciary duty to Peso. The directors had acted in good faith and in the best interests of the company in rejecting the offer. The information that Cropper received as a board member was in no way confidential that was unavailable to any prospective purchaser. The company received offers to sell on a regular basis and the offer at issue was not different from any other. The offer was made to Cropper as a private individual and was entirely separate from his role as a director. Consequently, for all these reasons there was no breach found.
Supreme Court of Canada
The Supreme Court of Canada is the highest court of Canada and is the final court of appeals in the Canadian justice system. The court grants permission to between 40 and 75 litigants each year to appeal decisions rendered by provincial, territorial and federal appellate courts, and its decisions...
on the fiduciary duty of corporate directors.
The owner of a mineral claim offered to sell their claim to Peso Silver Mines Ltd. The board of directors
Board of directors
A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization. Other names include board of governors, board of managers, board of regents, board of trustees, and board of visitors...
of Peso rejected the offer. Mr. Cropper, a member of the board, purchased the claim for himself. Learning of this, Peso sued Cropper for breach of his fiduciary duty towards the company for "seizing the corporate opportunity".
The Court found that Cropper was not in breach of his fiduciary duty to Peso. The directors had acted in good faith and in the best interests of the company in rejecting the offer. The information that Cropper received as a board member was in no way confidential that was unavailable to any prospective purchaser. The company received offers to sell on a regular basis and the offer at issue was not different from any other. The offer was made to Cropper as a private individual and was entirely separate from his role as a director. Consequently, for all these reasons there was no breach found.
See also
- List of Supreme Court of Canada cases
- Aero Service Ltd. v. O'Malley, [1974] S.C.R. 592
- Boardman v Phipps, [1967] 2 AC 46