References:  2 AC 663,  UKHL 2
Coram: Lord Templeman, Lord Goff
A committee of the board of Guinness had authorised payment of remuneration to Mr Ward, who was a director. However, the articles of association did not give authority to a committee of the board (as opposed to the full board) to authorise such a payment. Mr Ward attempted to rely on section 727.
Held: The claim failed: ‘Mr. Ward had no right to remuneration without the authority of the board. Thus the claim by Guinness for repayment is unanswerable. If Mr. Ward acted honestly and reasonably and ought fairly to be excused for receiving £5.2m. without the authority of the board, he cannot be excused from paying it back. By invoking section 727 as a defence to the claim by Guinness for repayment, Mr. Ward seeks an order of the court which would entitle him to remuneration without the authority of the board.’ (Lord Templeman)
Statutes: Companies Act 1985 727
This case cites:
- Approved – Hely-Hutchinson v Brayhead Ltd ( 1 QB 549)
Directors are required to disclose their interests in contracts with the company: ”It is not contended that [the] section in itself affects the contract. The section merely creates a statutory duty of disclosure and imposes a fine for . .
- Appeal from – Guinness plc v Saunders CA ( 1 WLR 863)
This case is cited by:
- Mentioned – Ultraframe (UK) Ltd v Fielding and others ChD (Bailii,  EWHC 1638 (Ch))
The parties had engaged in a bitter 95 day trial in which allegations of forgery, theft, false accounting, blackmail and arson. A company owning patents and other rights had become insolvent, and the real concern was the destination and ownership of . .
- Cited – Kohli v Lit and Others ChD (Bailii,  EWHC 2893 (Ch))
The claimant asserted that the other shareholders had acted in a manner unfairly prejudicial to her within the company.
Held: The claimant was allowed to bring in without prejudice correspondence to contradict evidence by the defendant which . .