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Foster Bryant v Bryant

[2007] 2 BCLC 239

Case summary last updated at 22/01/2020 18:10 by the Oxbridge Notes in-house law team.

Judgement for the case Foster Bryant v Bryant

D was director of surveying company. The other director (and majority shareholder) sacked D’s wife from company; as result D resigned his directorship. However before D’s resignation took effect, company who had previously contracted with surveying company approached D to ask him to work for them. D agreed. Held:
 
When is Resigning Director Liable?
·       Director who has resigned his directorship may be liable under where after his resignation he exploits property of former company.
·       Property of former company may be either:
i)         business opportunity
ii)        or information/trade secrets of former company
·       Business opportunity may constitute either:
i)         existing work carried out by company
-        i.e. where D solicits customers of former company
-        this is an ‘intangible asset’ of former company
ii)        or a ‘maturing business opportunity’
-        i.e. an developing opportunity which D came across in his position of director, and which was thus property of company
·       Whether D is liable for use of maturing business opportunity depends on:
a.     Ripeness of opportunity
b.     How long after resignation D takes up opportunity
c.     Circumstances of termination of D’s directorship
 
Motive
·       Clear that D was forced out of company by behaviour of other director. 
·       However here, given that C was still a director at time of taking up opportunity he still had duty not to put himself in position of conflict whilst he remained director.
Ø  This is case even though it was former company’s customers which approach him (and not vice-versa)
·       Had D made any profit out of contract with other company, would have been liable to account for profits.

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