The fact that the duty of loyalty has never before been applied so as to require a fiduciary to disclose his own misconduct was not a good objection to the application of the fiduciary principle. Based on this policy doctrine, the Court of Appeal held that there is no basis on which the defendant could reasonably have come to the conclusion that it was not in the best interest of Item to know of his breach of duty and Mr.
Fassihi could not fulfil his duty of loyalty except by informing Item about RAMS, and his plan to acquire the Isograph contract for himself.
In relation to the apportionment issue, the court observed that, if section 2 of the Act applies, Mr. Fassihi is free to claim that part of his June salary 1 to 26 June as his employment contract contained no provision which expressly excluded the operation of the Act. Ansell , by observing that in the Boston case there was no attempt to rely on the Act and therefore it is not an authority as to the effect of the Act.
To conclude, L. Arden allowed the appeal and held that none of the authorities cited, detracts from the interpretation to sections 2 and 3 of the Act and based on that interpretation Mr. Fassihi can make a time-apportioned claim for his salary for the period 1 to 26 June. The fiduciary duty of loyalty has been a source of debate among academics.
It is argued by some that the requirement of loyalty is subjective as it requires fiduciaries to exercise their judgement in a manner, which they subjectively believe to be in the best interests of the beneficiary, while others have argued that the duty of loyalty is best understood as the summation of the various doctrines that are applied peculiarly to fiduciaries, rather than as a legal duty that is directly enforceable on its own right.
In the case of Item Software Ltd where full disclosure was seen as an extension of the fiduciary duty of loyalty; the Delaware court, in the case of Malone v. Brincat, where it was established that absolute honesty was required from the fiduciaries; the Canadian Court, which adopted the English approach and the Scottish Court, where the question of full disclosure being a part of the fiduciary duty of loyalty was left open.
The Australian Courts seem to be an outlier as they have rejected this proposition. They view the fundamental duty of loyalty as proscriptive by nature and this stance does not easily accommodate a duty of full disclosure as a primary fiduciary obligation. In contrast to the Australian Courts, academics and legal scholars have observed the importance of this extension of the fiduciary duty of loyalty. For example: Licht argues that the common law regime of fiduciary loyalty implements a dual-pronged approach that ensures certain outcomes.
The first prong i. Academics like Lee have claimed that there is a directional element in fiduciary obligations that includes a duty to act solely for the benefit of the principal. Furthermore, Lee explains that this duty consists of a duty to act in the sole interests of the company as the fiduciary obligations are not result-oriented and do not specify a particular standard to be attained by the fiduciary. She further argues that this positive, directional element of fiduciary obligation was seen in the case of Regal Hastings Ltd v Gulliver , where the House of Lords found the directors liable to account to the company for their profits due to the fact that the directors has made use of those fiduciary positions to make those profits.
It is argued that it was enough that the fiduciary used its fiduciary position to make a profit for itself and it did not matter that it had not been shown that the interests of the principal had been adversely affected. However, some academics are not convinced by the best interests duty applied in Item Software. Edelman argues that the difficulty with the duty to act in the best interests is that the duty is extremely vague.
Furthermore, it is observed that the extreme vagueness has generated much academic criticism such as being unhistorical, simplistic, true in part only and misleading. The approach taken by L. Arden in the caseof Item Software started a chain reaction and various jurisdictions around the world adopted this approach.
It is crucial to note that even though the court stated that the duty of disclosure was not an independent duty, it functioned in the exact way as it operated as a separate and additional source of liability.
Furthermore, I believe that Mr. Fassihi was in clear breach of his fiduciary duty primarily due to the conflict of interest and his duty to not make potential secret profits. You are commenting using your WordPress. You are commenting using your Google account. You are commenting using your Twitter account. You are commenting using your Facebook account. Notify me of new comments via email.
Notify me of new posts via email. Reading time: minutes. What are the facts of the case? What did the court decide? What can be made out of this judgement? In conclusion… The approach taken by L.
Like this: Like Loading Prev Analysis: One nation, one language? Leave a Reply Cancel reply Enter your comment here Fill in your details below or click an icon to log in:. Email required Address never made public. Name required. Search for: Search. Follow Following. After a falling out, two directors purchased property adjacent to a company property but in their own. His union instructed him not to conduct weddings on Saturdays.
He had been told that if he failed to perform his full range of duties on a Saturday including marriages , he. It was claimed that the contract had been obtained by the defendant employee in breach of his fiduciary duties to. It was alleged that the defendants, including a director of the claimant, had submitted false invoices to the claimants, and purchased property with the resulting profits. Cited — Healey v Societe Anonyme Francais Rubastic A director of the company claimed arrears of salary for work done notwithstanding that he had been summarily dismissed for misconduct.
There was no question of a claim for damages for breach of duty. Equity operates on conscience. The directors are under a duty to act fairly as between different shareholders. This applies not just where there were different classes of shareholder but also where. Cited — In Re Barings Plc, Secretary of State for Trade and Industry v Baker No 5 ChD Nov A person disqualified from acting as a company director might exceptionally be given permission to act as non-executive director in named companies where this appeared necessary and the cause of the original disqualification was unrelated.
Cited — Powdrill and Another v Watson and Another HL Mar A receiver of a companies assets, who employed former staff of the company, beyond an initial period of 14 days, becomes personally responsible for their employment contracts, and consequently becomes liable for making redundancy payments. The During the course of a half year the plaintiff, Treacy, had resigned from that office.
At the end of the half year the salary for. The claimant appealed dismissal of its claim for breach of contract and of fiduciary duty, and his claim for payment of sums due under share options granted to him. Held: The appeal failed. Cited — Helmet Integrated Systems Ltd v Tunnard and others CA Dec Whilst employed by the claimants as a salesman, the defendant came to want to develop his idea for a modular helmet suitable for fire-fighters and others.
He took certain steps including showing the proposal confidentially to a competitor, and then. Held: The appeal as allowed. The correct approach under section 2 to a case like this, where the contract is an annual. Buy Me a Coffee. Skip to content The first defendant F had been employed by a company involved in a distribution agreement.
Lists of cited by and citing cases may be incomplete. Company, Employment Updated: 29 November ; Ref: scu.
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