A director’s duty of loyalty and the relevance of the company’s scope of business: Cheng Wai Tao v Poon Ka Man Jason
The Hong Kong Court of Final Appeal has utilised a ‘scope of business’ inquiry to delineate the boundaries of the no-conflict rule for the company director. Such an inquiry is directed at discerning the realistic ability of the company to exploit any particular business opportunity and a strict capa...
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| Format: | text |
| Language: | English |
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Institutional Knowledge at Singapore Management University
2017
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| Online Access: | https://ink.library.smu.edu.sg/sol_research/2301 https://ink.library.smu.edu.sg/context/sol_research/article/4253/viewcontent/Koh_2017_The_Modern_Law_Review__1_.pdf |
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| Institution: | Singapore Management University |
| Language: | English |
| Summary: | The Hong Kong Court of Final Appeal has utilised a ‘scope of business’ inquiry to delineate the boundaries of the no-conflict rule for the company director. Such an inquiry is directed at discerning the realistic ability of the company to exploit any particular business opportunity and a strict capacity approach is eschewed, at least where the no-conflict rule is concerned. The decision is premised on a bifurcation between the no-conflict and no-profit rules, suggesting that the tests to determine breach of these fiduciary rules are not necessarily the same, thus permitting a more nuanced consideration of directorial breaches. |
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