Teck Corp Ltd v Millar (1972) 33 DLR (3d) 288 is an important Canadian corporate law decision on a corporate director's fiduciary duty in the context of a takeover bid.
Facts Afton Mines Ltd’s majority owner was Teck Corp Ltd. Teck wanted to replace the board with its own nominees. It wanted Afton to enter the ‘ultimate deal’ with Teck to exploit mineral rights that Afton possessed. Before that could happen the Afton directors started an exploitation agreement with Canex. This agreement, common in Canada, provided Canex be issued with a large number of shares. This displaced Teck’s majority.
Judgment Justice Thomas R. Berger of the British Columbia Supreme Court held that a director may resist a hostile take-over so long as they are acting in good faith, and they have reasonable grounds to believe that the take-over will cause substantial harm to the interests of the shareholders collectively. Berger J said the following:(1972) 33 DLR (3d) 288, 314 and 328
Significance The case was viewed as a shift away from the standard set in the English case of Hogg v. Cramphorn Ltd. (1963). Recent scholarship has made the following observation:
See also BCE Inc v 1976 Debentureholders
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