Regal (Hastings) v Gulliver

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Regal (Hastings) v Gulliver and Ors, [1967] 2 A.C. 134 is a leading English decision on the companies law rule against directors and officers from taking corporate opportunities in violation of their duty of loyalty. The Court held that a director cannot take advantage of an opportunity that the corporation would otherwise be interested in but was unable to take advantage.

Regal was in the business of running cinemas. One cinema they owned was in Hastings. It leased two cinemas in Hastings through an incorporated subsidiary named Gulliver. The landlord wanted guarantees on the rent of at least 5000 pounds. At a joint meeting of directors of both companies they agreed to all contribute money for the guarantee.

Lord Russell of Killowen found that:

The rule of equity which insists on those, who by use of a fiduciary position make a profit being liable to account for that profit, in no way depends on fraud or absence of bona fides; or upon such questions or considerations as whether the profit would or should otherwise have gone to the plaintiff, or whether the profiteer was under a duty to obtain the source of the profit for the plaintiff, or whether he took a risk or acted as he did for the benefit of the plaintiff, or whether the plaintiff has in fact been damaged or benefited by his action. The liability arises from the mere fact of a profit having, in the stated circumstances, been made.