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.

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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

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Legislation
Companies Act 71 of 2008
Constitution of the Republic of South Africa, 1996
UK Companies Act 2006
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Published
2021-04-15
Section
Case Notes