What is the ratio in Pavlides v Jensen?

Individual shareholders cannot sue directors for negligence where the loss is suffered by the company, as this would constitute reflective loss recoverable only by the company itself.

What did the court decide in Pavlides v Jensen?

The court dismissed the shareholder's claim against the directors, holding that any loss from the sale of the mining concession was suffered by the company, not the individual shareholder.

Why is Pavlides v Jensen important for company law?

It establishes the reflective loss principle, preventing duplicate recovery and maintaining the proper distinction between company and shareholder rights in litigation.

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