上诉法院判决：公司高管违反义务

COMPANY — Director — Fiduciary duty — Alleged breach of duty during period of notice after resignation as director but before resignation taking effect — Director not resigning in order to take clients but during notice period major client seeking continued work from such director

Foster Bryant Surveying Ltd and anor v Bryant and anor [2007] EWCA Civ 200

CA: Buxton, Rix and Moses LJJ: 13 March 2007

The question of whether a retiring director may or may not be found to have breached his fiduciary duty was highly fact sensitive.

The Court of Appeal so observed when reviewing the law concerning breach of fiduciary duty on the part of a director and giving guidance on its application, before dismissing the appeal of the claimants, Foster Bryant Surveying Ltd and Mark Royston Foster, from the decision of Judge Richard Seymour QC sitting in the Queen’s Bench Division on 26 May 2006, that there had been no breach by the first defendant, Graham Michael Bryant, of his fiduciary duties as a director of the first claimant company; that he had been excluded from his role as a director after his resignation; and that even if he had been in breach of a fiduciary duty (or otherwise of the shareholders’ agreement in contract) the company had suffered no loss by way of damages as a result.

On appeal the first claimant company submitted, inter alia: that despite the findings of fact the judge erred in not recognising that what the first defendant did during his notice period between resignation and departure was a case of breach of fiduciary duty; and that in particular the judge had erred in finding that the first defendant had been excluded from his role as a director as from his resignation, without which error he would probably have found a breach.

RIX LJ said that the synthesis of principles expounded in Hunter Kane Ltd v Watkins [2002] EWHC 186 (Ch), as drawn primarily from Dolphin Ltd v Simonet [2001] 2 BCLC 704 and the authorities there cited, and as approved in In Plus Group Ltd v Pyke [2002] 2 BCLC 201, para 71, per Brooke LJ, accurately stated the law on a director’s fiduciary duties, as follows: “1. A director, while acting as such, has a fiduciary relationship with his company. That is he has an obligation to deal towards it with loyalty, good faith and avoidance of the conflict of duty and self-interest. 2. A requirement to avoid a conflict of duty and self-interest means that a director is precluded from obtaining for himself, either secretly or without the informed approval of the company, any property or business advantage either belonging to the company or for which it has been negotiating, especially where the director or officer is a participant in the negotiations. 3. A director's power to resign from office is not a fiduciary power. He is entitled to resign even if his resignation might have a disastrous effect on the business or reputation of the company. 4. A fiduciary relationship does not continue after the determination of the relationship which gives rise to it. After the relationship is determined the director is in general not under the continuing obligations which are the feature of the fiduciary relationship. 5. Acts done by the directors while the contract of employment subsists but which are preparatory to competition after it terminates are not necessarily in themselves a breach of the implied term as to loyalty and fidelity. 6. Directors, no less than employees, acquire a general fund of skill, knowledge and expertise in the course of their work, which is plainly in the public interest that they should be free to exploit it in a new position. After ceasing the relationship by resignation or otherwise a director is in general (and subject of course to any terms of the contract of employment) not prohibited from using his general fund of skill and knowledge, the 'stock in trade' of the knowledge he has acquired while a director, even including such things as business contacts and personal connections made as a result of his directorship. 7. A director is however precluded from acting in breach of the requirement at 2 above, even after his resignation where the resignation may fairly be said to have been prompted or influenced by a wish to acquire for himself any maturing business opportunities sought by the company and where it was his position with the company rather than a fresh initiative that led him to the opportunity which he later acquired. 8. In considering whether an act of a director breaches the preceding principle the factors to take into account will include the factor of position or office held, the nature of the corporate opportunity, its ripeness, its specificness and the director's relation to it, the amount of knowledge possessed, the circumstances in which it was obtained and whether it was special or indeed even private, the factor of time in the continuation of the fiduciary duty where the alleged breach occurs after termination of the relationship with the company and the circumstances under which the breach was terminated, that is whether by retirement or resignation or discharge. 9. The underlying basis of the liability of a director who exploits after his resignation a maturing business opportunity 'of the company is that the opportunity is to be treated as if it were the property of the company in relation to which the director had fiduciary duties. By seeking the exploit the opportunity after resignation he is appropriating to himself that property. He is just as accountable as a trustee who retires without properly accounting for trust property. 10. It follows that a director will not be in breach of the principle set out as point 7 above where either the company's hope of obtaining the contract was not a 'maturing business opportunity' and it was not pursuing further business orders nor where the director's resignation was not itself prompted or influenced by a wish to acquire the business for himself. 11. As regards breach of confidence, although while the contract of employment subsists a director or other employee may not use confidential information to the detriment of his employer, after it ceases the director/employee may compete and may use know-how acquired in the course of his employment (as distinct from trade secrets – although the distinction is sometimes difficult to apply in practice).” Applying those principles to the instant case the conclusion was that neither the findings of the judge nor any further findings that he was inevitably called upon to make required him to hold that the defendant had been in breach of his fiduciary duties or that he was liable to account.

MOSES LJ and BUXTON LJ gave concurring judgments.

Appearances: Richard Lord QC (Blandy & Blandy, Reading) for the claimant. Charles Douthwaite (Awdry Bailey Douglas, Wotton Bassett) for the defendant.

Reported by: Matthew Brotherton, barrister.