Case: Duomatic principle and unlawful acts

The Duomatic principle is the shorthand used by lawyers to refer to the common law principle of decision-making by shareholders by way of informal unanimous consent. The theory behind the principle is that where all the shareholders of a company agree on a matter and none of them object to a procedural irregularity, it would serve no useful purpose to insist on adherence to formal procedures.

In Tonstate Group Limited, Matyas & ors v Wojakovski & ors [2019] EWHC 3363 (Ch), the High Court considered the scope of the Duomatic principle in the context of a director relying on the principle as a defence to a claim for breach of fiduciary duty.