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A Director's Duty of Loyalty and the Relevance of the Company's Scope of Business: Cheng Wai Tao v Poon Ka Man Jason
Author(s) -
Koh Pearlie
Publication year - 2017
Publication title -
the modern law review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.37
H-Index - 22
eISSN - 1468-2230
pISSN - 0026-7961
DOI - 10.1111/1468-2230.12294
Subject(s) - fiduciary , appeal , relevance (law) , scope (computer science) , exploit , duty , profit (economics) , loyalty , management , business , law and economics , psychology , political science , law , sociology , economics , computer science , computer security , microeconomics , programming language
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.