However, at a subsequent meeting of the board he refused to comply with the chairman's request that he turn over his interest in them at cost.

In doing so, it applied the reasoning of Lord Russell of Killowen in Regal (Hastings) Ltd v Gulliver that it had adopted in previous Canadian jurisprudence, and found that Cropper was not acting in his capacity as a director of the appellant but as an individual member of the public.

There are affirmative findings of fact that he and his co-directors acted in good faith, solely in the interests of the appellant and with sound business reasons in rejecting the offer.

On the question of the amount of damages that was raised in the cross-appeal, the Court agreed with the Court of Appeal that "the claim being founded on breach of contract the damages cannot be increased by reason of the circumstances of dismissal whether in respect of the respondent's wounded feelings or the prejudicial effect upon his reputation and chances of finding other employment."

The ruling expanded on a hypothetical case that had been given in the Court of Appeal of England and Wales in its deliberations in Regal (Hastings) Ltd v Gulliver, that had been endorsed by Lord Denning MR in his judgment in Boardman v Phipps.

Peso and Aero Service continue to illustrate the boundaries of conflict of interest that directors of Canadian companies must keep in mind in their deliberations.