Island Export Finance Ltd v Umunna
A former director is not prevented from exploiting an opportunity after leaving the company, unless his resignation was prompted by a wish to acquire the opportunity, or the opportunity was one that the company was actively pursuing.
Facts
Mr Umunna was the managing director of Island Export Finance. He obtained a contract for the company to supply postal boxes to the government of Cameroon. The company hoped to get further contracts, but none were in negotiation. Mr Umunna resigned, because he was dissatisfied with the company, and later obtained further contracts for postal boxes from Cameroon for his own company. Island Export sued him for breach of fiduciary duty.
Legal principle
Hutchison J held that Mr Umunna was not liable. A director's fiduciary duty may continue after resignation in relation to opportunities that he learned of as director, but the company's hopes of further contracts were not a maturing business opportunity, and Mr Umunna had not resigned in order to take the opportunity for himself. A director cannot be prevented from using his general knowledge and experience after leaving a company, and a restriction on his using such knowledge would amount to a restraint of trade.
Related cases on directors' duties: conflicts of interest
- Aberdeen Railway Co v Blaikie Brothers (1854) 1 Macq 461
- Bhullar v Bhullar [2003] EWCA Civ 424, [2003] 2 BCLC 241
- CMS Dolphin Ltd v Simonet [2001] 2 BCLC 704
- Cook v Deeks [1916] 1 AC 554
- Foster Bryant Surveying Ltd v Bryant [2007] EWCA Civ 200
- Fulham Football Club Ltd v Cabra Estates plc [1994] 1 BCLC 363
- Guinness plc v Saunders [1990] 2 AC 663
- Imageview Management Ltd v Jack [2009] EWCA Civ 63, [2009] Bus LR 1034
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