LML4806 Company Law
Semester 2 Assignment 2 - 2025
, Question 1
In a scenario involving Internet World (Pty) Ltd and its former director Lerato, a legal
dispute arises following the conclusion of a profitable contract between Lerato and
Skylab (Pty) Ltd in her personal capacity. The matter calls for a careful examination of
whether Lerato breached her fiduciary duties under South African company law,
specifically under the Companies Act1 and the common law principles that continue to
inform directors’ conduct.
The core issue is whether Lerato, while still a director of Internet World (Pty) Ltd,
misappropriated a business opportunity that rightfully belonged to the company. The
crux of her defence lies in the fact that she only accepted and signed the contract with
Skylab after formally resigning from her directorship. The question is whether this
resignation insulates her from liability for breach of fiduciary duties.
The Companies Act2 imposes stringent duties on directors. According to section 76(2)
(a), a director must not use their position, or information obtained in that capacity, to
gain an advantage for themselves or cause harm to the company. Section 76(3)(a)-(c)
further requires that directors act in good faith, for a proper purpose, in the best
interests of the company, and with reasonable care and diligence. 3 These statutory
duties align with the common law fiduciary duty not to allow personal interests to conflict
with those of the company.
In Robinson v Randfontein Estates Gold Mining Co Ltd,4 the court established that
directors may not appropriate for themselves a corporate opportunity they encountered
through their office. Importantly, even after resignation, a director may still be held
accountable if the opportunity arose during their tenure. This principle was reaffirmed in
1 Companies Act 71 of 2008.
2 Companies Act 71 of 2008.
3 Companies Act 71 of 2008.
4 Robinson v Randfontein Estates Gold Mining Co Ltd 1921 AD 168.
Semester 2 Assignment 2 - 2025
, Question 1
In a scenario involving Internet World (Pty) Ltd and its former director Lerato, a legal
dispute arises following the conclusion of a profitable contract between Lerato and
Skylab (Pty) Ltd in her personal capacity. The matter calls for a careful examination of
whether Lerato breached her fiduciary duties under South African company law,
specifically under the Companies Act1 and the common law principles that continue to
inform directors’ conduct.
The core issue is whether Lerato, while still a director of Internet World (Pty) Ltd,
misappropriated a business opportunity that rightfully belonged to the company. The
crux of her defence lies in the fact that she only accepted and signed the contract with
Skylab after formally resigning from her directorship. The question is whether this
resignation insulates her from liability for breach of fiduciary duties.
The Companies Act2 imposes stringent duties on directors. According to section 76(2)
(a), a director must not use their position, or information obtained in that capacity, to
gain an advantage for themselves or cause harm to the company. Section 76(3)(a)-(c)
further requires that directors act in good faith, for a proper purpose, in the best
interests of the company, and with reasonable care and diligence. 3 These statutory
duties align with the common law fiduciary duty not to allow personal interests to conflict
with those of the company.
In Robinson v Randfontein Estates Gold Mining Co Ltd,4 the court established that
directors may not appropriate for themselves a corporate opportunity they encountered
through their office. Importantly, even after resignation, a director may still be held
accountable if the opportunity arose during their tenure. This principle was reaffirmed in
1 Companies Act 71 of 2008.
2 Companies Act 71 of 2008.
3 Companies Act 71 of 2008.
4 Robinson v Randfontein Estates Gold Mining Co Ltd 1921 AD 168.
