Post-resignation Survival of Fiduciary Duties: Big Catch Fishing Tackle Proprietary Limited v Kemp (17281/18) 2019 ZAWCHC 20 (5 March 2019)

Keywords: South African company law, the Companies Act, post-resignation fiduciary duties of directors, duty not to misappropriate corporate opportunities, constitutional right to choose a trade, occupation and profession

Abstract

 In Big Catch Fishing Tackle Proprietary Limited v Kemp (17281/18) 2019 ZAWCHC 20 (5 March 2019) the Western Cape Division, Cape Town had to determine whether a former director of a company continued to owe fiduciary duties to the company after he had resigned, and if so, whether he could temporarily be interdicted from competing with the company until the main action was heard in court. The court dismissed the company's application for an interim interdict. This article critically analyses the judgment in regard to the post-resignation fiduciary duties of directors. The judgment is noteworthy as it sheds light on the post-resignation fiduciary duties of directors – an area of law which is still developing in South African law. This article contends that the court incorrectly conflated the legal principles relating to the appropriation of corporate opportunities with the misuse of confidential information. It is further argued that courts should not lay down a closed list of instances when directors' fiduciary duties will continue post-resignation, as the court attempted to do in this case. It is suggested that courts should adopt a flexible and pragmatic approach in determining when a director's fiduciary duties will survive after his or her resignation.

GS85.png

Author Biography

Rehana Cassim, University of south Africa

Department of Mercantile Law Department, School of Law, University of South Africa

Associate Professor, Mercantile Law Department, Unisa

Attorney and Notary Public of the High Court of South Africa

BA (cum laude) (Wits)

LLB (cum laude) (Wits)

LLM (cum laude) (Wits)

LLD (Unisa)

References

Bibliography

Literature

Blackman MS et al Commentary on the Companies Act – Vol 2 (Juta Claremont 2012)

Cassim FHI "Company Law (including close corporations)" 2005 Annual Survey of SA Law 466-493

Cassim R "Post-resignation Duties of Directors: The Application of the Fiduciary Duty not to Misappropriate Corporate Opportunities" 2008 SALJ 731-753

Cassim MFC "Da Silva v CH Chemicals (Pty) Ltd: Fiduciary Duties of Resigning Directors" 2009 SALJ 61-70

Cassim FHI "The Duties and Liability of Directors" in Cassim FHI et al Contemporary Company Law (Juta

Davies PL and Worthington S Gower Principles of Modern Company Law 10th ed (Sweet & Maxwell London 2016)

Havenga M "Corporate Opportunities: A South African Update (Part 2)" 1996 SA Merc LJ 233-251

Lowry J and Edmunds R "Of Resigning Directors: Lessons in Reform" 2013 HKLJ 55-76

Case law

Aberdeen Railway Co v Blaikie Brothers (1854) 1 Macq 461

Advanced Fuels Technology v Blythe [2018] VSC 286

Antoy Investments v Rand Water Board (159/2007) 2008 ZASCA 10 (20 March 2008)

Atlas Organic Fertilizers (Pty) Ltd v Pikkewyn Ghwano (Pty) Ltd 1981 2 SA 173 (T)

Balston Ltd v Headline Filters Ltd [1990] FSR 385

Basson v Chilwan 1993 3 SA 742 (A)

Bellairs v Hodnett 1978 1 SA 1109 (A)

Bhullar v Bhullar [2003] 2 BCLC 241

Big Catch Fishing Tackle Proprietary Limited v Kemp (17281/18) 2019 ZAWCHC 20 (5 March 2019)

Boardman v Phipps [1966] 3 All ER 721 (HL)

Camps Bay Residents and Ratepayers Association v Augoustides 2009 6 SA 190 (WCC)

Canadian Aero Service Ltd v O'Malley (1973) 40 DLR (3d) 371 (SCC)

Chan v Zacharia (1984) 154 CLR 178

CJC Media (Scotland) Ltd v Sinclair [2019] CSOH 8

CMS Dolphin Ltd v Simonet [2001] 2 BCLC 704

Coleman Taymar Ltd v Oakes [2001] 2 BCLC 749

Courtenay Polymers Pty Ltd v Deang [2005] VSC 318

Cranleigh Precision Engineering (Pty) Ltd v Bryant [1964] 3 All ER 289

CyberScene Ltd v i-Kiosk Internet and Information (Pty) Ltd 2000 3 SA 806 (C)

Da Silva v CH Chemicals (Pty) Ltd 2008 6 SA 627 (SCA)

Eriksen Motors (Welkom) Ltd v Protea Motors, Warrenton 1973 3 SA 685 (A)

Faccenda Chicken Ltd v Fowler [1986] 1 All ER 617 (CA)

Findaload (Pty) Ltd v CMT Transport (Pty) Ltd 2019 JOL 46156 (FB)

First Subsea Ltd v Balltech Ltd [2018] Ch 25

Foster Bryant Surveying Ltd v Bryant [2007] EWCA Civ 200

Framlington Group plc v Anderson [1995] BCC 611

Gauteng Provincial Legislature v Kilian 2001 2 SA 68 (SCA)

Gelb v Hawkins 1960 3 SA 687 (A)

Gemstone Corp of Australia Ltd v Grasso (1994) 13 ACSR

Halcyon House Ltd v Baines [2014] EWHC 2216 (QB)

In Plus Group Ltd v Pyke [2002] EWCA Civ 370

Industrial Development Consultants Ltd v Cooley [1972] 2 All ER 162

Intercontinental Exports (Pty) Ltd v Fowles 1999 2 SA 1045 (SCA)

Kaimowitz v Delahunt 2017 3 SA 201 (WCC)

Knox D'Arcy Ltd v Jamieson 1996 4 SA 348 (A)

Kruger Investments Group Ltd v Nuberry Holdings Limited (14184/15) 2015 ZAWCHC 159 (30 October 2015)

Magna Alloys and Research (SA) (Pty) Ltd v Ellis 1984 4 SA 874 (A)

Meter Systems Holdings Ltd v Venter 1993 1 SA 409 (W)

Modise v Tladi Holdings (Pty) Ltd [307/19] 2020 ZASCA 112 (29 September 2020)

Movie Camera Co (Pty) Ltd v Van Wyk 2003 2 All SA 291 (C)

Multi Tube Systems (Pty) Ltd v Ponting 1984 3 SA 182 (D)

Nedbank Ltd v Bestvest 153 (Pty) Ltd; Essa v Bestvest 153 (Pty) Ltd 2012 5 SA 497 (WCC)

Nzimande v Nzimande 2005 1 SA 83 (W)

Odyssey Entertainment Ltd v Kamp [2012] EWHC 2316 (Ch)

Olympic Passenger Service (Pty) Ltd v Ramlagan 1957 2 SA 382 (D)

Peso Silver Mines Ltd v Cropper (1966) 58 DLR (2d) 1

Phillips v Fieldstone Africa (Pty) Ltd 2004 3 SA 465 (SCA)

Protect a Partner (Pty) Ltd v Laura Machaba-Abiodun 2013 JOL 31048 (LC)

Quarter Master UK Ltd v Pyke [2005] 1 BCLC 245

Reddy v Siemens Telecommunications Pty Ltd 2007 2 SA 486 (SCA)

Reeves v Marfield Insurance Brokers CC 1996 3 SA 766 (A)

Regal (Hastings) Ltd v Gulliver [1942] 1 All ER 378 (HL)

Robinson v Randfontein Estates Gold Mining Co Ltd 1921 AD 168

SA Historical Mint (Pty) Ltd v Sutcliffe 1983 2 SA 84 (C)

Sibex Construction SA (Pty) Ltd v Injectaseal CC 1988 2 SA 54 (T)

Southern Real Estate Pty Ltd v Valerie Dellow and Wayne Arnold [2003] SASC 318

Spieth v Nagel 1997 3 All SA 316 (W)

Symington v Pretoria-Oos Privaat Hospitaal Bedryfs (Pty) Ltd 2005 4 All SA 403 (SCA)

The Bell Group Ltd (in liq) v Westpac Banking Corporation (No 9) [2008] WASC 239

Ultraframe (UK) Ltd v Fielding [2005] EWHC 1638 (Ch)

Union Government v Gass 1959 4 SA 401 (A)

Ward v Sulzer 1973 3 SA 701 (A)

Warman International Ltd v Dwyer (1995) 182 CLR 544

Wright v Gasweld Pty Limited (1991) ATPR 41-087

Ying Mui v Frank Kiang Ngan (No 3) [2017] VSC 29

Legislation

Companies Act 71 of 2008

Constitution of the Republic of South Africa, 1996

UK Companies Act 2006

Published
2021-04-15
How to Cite
CassimR. (2021). Post-resignation Survival of Fiduciary Duties: Big Catch Fishing Tackle Proprietary Limited v Kemp (17281/18) 2019 ZAWCHC 20 (5 March 2019). Potchefstroom Electronic Law Journal, 24, 1 - 28. https://doi.org/10.17159/1727-3781/2021/v24i0a9199
Section
Case Notes