LML4806
ASSIGNMENT 2 SEMESTER 2 2025
UNIQUE NO.
DUE DATE: 2025
, Company Law
Question 1
Has Lerato breached any fiduciary duties owed to Internet World (Pty) Ltd?
Introduction:
This scenario raises the issue of whether a director can take a business opportunity for
themselves after resigning from a company. In this case, Lerato was a director of
Internet World (Pty) Ltd and was negotiating a contract with Skylab (Pty) Ltd on the
company’s behalf. However, she later resigned and accepted the same contract in her
personal capacity. The key question is whether this was a breach of her fiduciary duties.
Legal Framework:
In terms of section 76(2)(a) of the Companies Act 71 of 2008, a director must act in
good faith and in the best interests of the company. Section 76(3) goes further to say
that directors must not use their position or company information to gain an unfair
personal advantage or to harm the company.
Case law supports this position. In Phillips v Fieldstone Africa (Pty) Ltd 2004 (3) SA
465 (SCA), the court made it clear that a director can still be held accountable for taking
a company’s opportunity even after resigning. The same principle was applied in Da
Silva v CH Chemicals (Pty) Ltd 2008 (6) SA 620 (SCA), where the court emphasized
that fiduciary duties don’t just disappear when a director steps down, especially when
the opportunity was discovered during their time in office.
Application to the Facts:
Lerato was acting for Internet World when she became aware of the opportunity with
Skylab. Even though she resigned before signing the contract, the opportunity clearly
came to her because of her role as a director. Without her position in the company, she
wouldn't have been involved in the negotiations or had inside knowledge.
ASSIGNMENT 2 SEMESTER 2 2025
UNIQUE NO.
DUE DATE: 2025
, Company Law
Question 1
Has Lerato breached any fiduciary duties owed to Internet World (Pty) Ltd?
Introduction:
This scenario raises the issue of whether a director can take a business opportunity for
themselves after resigning from a company. In this case, Lerato was a director of
Internet World (Pty) Ltd and was negotiating a contract with Skylab (Pty) Ltd on the
company’s behalf. However, she later resigned and accepted the same contract in her
personal capacity. The key question is whether this was a breach of her fiduciary duties.
Legal Framework:
In terms of section 76(2)(a) of the Companies Act 71 of 2008, a director must act in
good faith and in the best interests of the company. Section 76(3) goes further to say
that directors must not use their position or company information to gain an unfair
personal advantage or to harm the company.
Case law supports this position. In Phillips v Fieldstone Africa (Pty) Ltd 2004 (3) SA
465 (SCA), the court made it clear that a director can still be held accountable for taking
a company’s opportunity even after resigning. The same principle was applied in Da
Silva v CH Chemicals (Pty) Ltd 2008 (6) SA 620 (SCA), where the court emphasized
that fiduciary duties don’t just disappear when a director steps down, especially when
the opportunity was discovered during their time in office.
Application to the Facts:
Lerato was acting for Internet World when she became aware of the opportunity with
Skylab. Even though she resigned before signing the contract, the opportunity clearly
came to her because of her role as a director. Without her position in the company, she
wouldn't have been involved in the negotiations or had inside knowledge.
