The ‘no conflict rule’ ceased to apply once a director had resigned his office went on to consider the ‘no profit rule.’ Paul Morgan QC: ‘The position is less straightforward in relation to the rules described above as to profiting from the property of the company or from a fiduciary position. If Mr Newson and Mr Pyke acquired property or had available to them the use of property, which was the property of the company, and then Mr Newson and Mr Pyke ceased to be directors of the company but retained the property described above, then it would seem that the mere fact that they had ceased to be directors of the company would not enable them to deal with the company’s property for their own benefit, and in disregard of the fiduciary obligations they owed the company in relation to that property: see the Simonet case at [para] 96. Accordingly, there will be cases where directors who have effectively resigned their directorships will continue to owe fiduciary obligations to the company in relation to the company’s property retained by the directors. There is also a group of cases dealing with what has been described as a ‘maturing business opportunity’ where former directors have continued to owe fiduciary obligations to the company in relation to such a business opportunity even after the termination of the relevant directorships: see the decision of the Supreme Court of Canada in Canadian Aero Services Ltd v O’Malley . . and the Simonet case.’
Judges:
Paul Morgan QC
Citations:
[2005] 1 BCLC 245
Jurisdiction:
England and Wales
Cited by:
Cited – Ultraframe (UK) Ltd v Fielding and others ChD 27-Jul-2005
The parties had engaged in a bitter 95 day trial in which allegations of forgery, theft, false accounting, blackmail and arson. A company owning patents and other rights had become insolvent, and the real concern was the destination and ownership of . .
Lists of cited by and citing cases may be incomplete.
Company
Updated: 01 December 2022; Ref: scu.230279