Foster Bryant v Bryant [2007] 2 BCLC 239

• Defendant was director of surveying company. The other director (and majority shareholder) sacked Defendant’s wife from company; as result Defendant resigned his directorship.

• However before Defendant’s resignation took effect, company who had previously contracted with surveying company approached Defendant to ask him to work for them. Defendant agreed.

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:

  1. Business opportunity

  2. Or information/trade secrets of former company

• Business opportunity may constitute either:

  1. Existing work carried out by company

     • I.e. where Defendant solicits customers of former company

     • This is an ‘intangible asset’ of former company

  2. Or a ‘maturing business opportunity’

     • i.e. an developing opportunity which Defendant came across in his position of director, and which was thus property of company

• Whether Defendant is liable for use of maturing business opportunity depends on:

  1. Ripeness of opportunity

  2. How long after resignation Defendant takes up opportunity

  3. Circumstances of termination of Defendant’s directorship

Motive

• Clear that Defendant was forced out of company by behaviour of other director. 

• However here, given that Claimant 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.

  • This is case even though it was former company’s customers which approach him (and not vice-versa)

• Had Defendant made any profit out of contract with other company, would have been liable to account for profits.