In the matter of Scully Royalty Limited
8th July 2026
On 7 July 2026, the Grand Court of the Cayman Islands handed down an important Judgment in MILFAM LLC v Morrow, Smith and Scully Royalty Ltd, addressing key questions concerning shareholder meetings, the interpretation of and implication of terms into articles of association and disclosure obligations in contested proxy battles for control of the board.
The dispute related to the contested proxy battle for control of Scully Royalty Limited, a Cayman Islands exempted company listed on the New York Stock Exchange. The Honourable Justice Segal held at the attempt by MILFAM LLC, a significant shareholder, to replace the incumbent directors with a new slate of directors was invalid and ineffective and that the incumbent directors remained in office.
The Judgment followed a three-day expedited trial in which the successful First and Second Defendants were represented by James Potts KC, instructed by Kyle Broadhurst and Adam Crane of Broadhurst LLC.
The Judgment addresses:
1. The power to postpone a general meeting and what is required in the Articles of Association.
2. The approach of the Court to implying terms into Articles of Association. Where the Articles confer on directors the exclusive power to appoint the Chairman, shareholders cannot assume a residual power to do so in the directors’ absence.
3. Disclosure obligations in circulars to shareholders. Dissident shareholders soliciting proxies must disclose material relationships between themselves and their nominees where those relationships may bear on a nominee’s independence, loyalties or suitability for office.
Together, the Judgment provides important guidance on the interpretation of shareholder meeting provisions in Articles of Association and on the disclosure standards expected in contested “proxy battles” for the election of directors.
Please click the links below to view the full case summary and access a copy of the Judgment.
