D was a director of a company (C), in which him and another person owned 50% of shares. After dispute with other director, D was excluded from running of C. A former client of C made it be known they no longer wished to work with C, and D set up a rival company which started doing work for that former client. Case was pre-section 175, thus C alleged D had breached his fiduciary duties not to act in conflict with interests of C. Held:
1) Is BREACH wherecompany for whomDworks has made it clear it will no longer work for company of which D is a director
- i.e. fact that C has taken an opportunity which would not have been available to company of which he is director irrelevant
2) Is NO BREACH where D works for a competing company after he has been effectively excluded from the company of which he is director
- i.e. here, D’s fiduciary duty to C is practically non-existent
- D has no say in how company of which he is a director is run
3) Thus on facts wasno breach of fiduciary duty by D.
1) Was uneasy at idea that someone can be director of two competing companies.
Ø i.e. Mashonaland requires reconsideration in light of modern standards.
2) Judgments as to whether director has conflict of interests are fact-specific
Nature of Liability
· Is breach of “no-profit rule” where director uses information, property or opportunities which belong to hiscompany.
· Here, director is under duty to pay over to company any money earned from opportunity.
Ø i.e. liability of director seems to be personal, not proprietary