LML4806
assignmen
Assignment 2 Semester 2
2025
UNIQUE CODE:
Detailed Solutions, References & Explanations
DUE DATE: Sept 2025
Terms of use
By making use of this document you agree to:
Use this document as a guide for learning,
comparison and reference purpose,
Not to duplicate, reproduce and/or misrepresent the
contents of this document as your own work,
Fully accept the consequences should you plagiarise
or misuse this document.
Disclaimer
Extreme care has been used to create this
document, however the contents are provided “as
is” without any representations or warranties,
express or implied. The author assumes no
liability as a result of reliance and use of the
contents of this document. This document is to
be used for comparison, research and reference
purposes ONLY. No part of this document may be
reproduced, resold or transmitted in any form or
by any means.
, 0688120934
PREVIEW
Question 1
Lerato has breached her fiduciary duties to Internet World (Pty) Ltd under both the
Companies Act 71 of 2008 and South African common law.
Fiduciary duties of directors
Section 76(3) of the Companies Act stipulates that a director must act in good faith
and for a proper purpose, in the best interests of the company, and must not use
their position or information to gain an improper advantage for themselves or another
person, or knowingly cause harm to the company.1 The Act further provides in section
76(2)(a)(ii) that this prohibition continues even after a director resigns if the advantage is
derived from confidential information or opportunities acquired through their position.2
At common law, directors owe a duty of loyalty to their company, which includes a
prohibition against diverting “corporate opportunities” that rightfully belong to the
company. 3 In Robinson v Randfontein Estates Gold Mining Co Ltd 4 , the Appellate
Division held that a fiduciary may not make a secret profit or exploit an opportunity
obtained in a fiduciary capacity. Later, in Da Silva v CH Chemicals (Pty) Ltd 5 , the
Supreme Court of Appeal confirmed that resignation does not cleanse a breach where a
director resigns specifically to appropriate an opportunity for personal benefit.
1
Companies Act 71 of 2008 s 76(3)(a)–(c).
2
Companies Act 71 of 2008 s 76(2)(a)(ii).
3
Cilliers HS, Benade ML, Henning JJ et al. Corporate Law 3 ed (2000) 145–146.
4
Robinson v Randfontein Estates Gold Mining Co Ltd 1921 AD 168 at 177–178.
5
Da Silva v CH Chemicals (Pty) Ltd 2008 (6) SA 620 (SCA) paras 18–20. Disclaimer
Extreme care has been used to create this document, however the contents are provided “as is”
without any representations or warranties, express or implied. The author assumes no liability as
a result of reliance and use of the contents of this document. This document is to be used for
comparison, research and reference purposes ONLY. No part of this document may be
reproduced, resold or transmitted in any form or by any means.
assignmen
Assignment 2 Semester 2
2025
UNIQUE CODE:
Detailed Solutions, References & Explanations
DUE DATE: Sept 2025
Terms of use
By making use of this document you agree to:
Use this document as a guide for learning,
comparison and reference purpose,
Not to duplicate, reproduce and/or misrepresent the
contents of this document as your own work,
Fully accept the consequences should you plagiarise
or misuse this document.
Disclaimer
Extreme care has been used to create this
document, however the contents are provided “as
is” without any representations or warranties,
express or implied. The author assumes no
liability as a result of reliance and use of the
contents of this document. This document is to
be used for comparison, research and reference
purposes ONLY. No part of this document may be
reproduced, resold or transmitted in any form or
by any means.
, 0688120934
PREVIEW
Question 1
Lerato has breached her fiduciary duties to Internet World (Pty) Ltd under both the
Companies Act 71 of 2008 and South African common law.
Fiduciary duties of directors
Section 76(3) of the Companies Act stipulates that a director must act in good faith
and for a proper purpose, in the best interests of the company, and must not use
their position or information to gain an improper advantage for themselves or another
person, or knowingly cause harm to the company.1 The Act further provides in section
76(2)(a)(ii) that this prohibition continues even after a director resigns if the advantage is
derived from confidential information or opportunities acquired through their position.2
At common law, directors owe a duty of loyalty to their company, which includes a
prohibition against diverting “corporate opportunities” that rightfully belong to the
company. 3 In Robinson v Randfontein Estates Gold Mining Co Ltd 4 , the Appellate
Division held that a fiduciary may not make a secret profit or exploit an opportunity
obtained in a fiduciary capacity. Later, in Da Silva v CH Chemicals (Pty) Ltd 5 , the
Supreme Court of Appeal confirmed that resignation does not cleanse a breach where a
director resigns specifically to appropriate an opportunity for personal benefit.
1
Companies Act 71 of 2008 s 76(3)(a)–(c).
2
Companies Act 71 of 2008 s 76(2)(a)(ii).
3
Cilliers HS, Benade ML, Henning JJ et al. Corporate Law 3 ed (2000) 145–146.
4
Robinson v Randfontein Estates Gold Mining Co Ltd 1921 AD 168 at 177–178.
5
Da Silva v CH Chemicals (Pty) Ltd 2008 (6) SA 620 (SCA) paras 18–20. Disclaimer
Extreme care has been used to create this document, however the contents are provided “as is”
without any representations or warranties, express or implied. The author assumes no liability as
a result of reliance and use of the contents of this document. This document is to be used for
comparison, research and reference purposes ONLY. No part of this document may be
reproduced, resold or transmitted in any form or by any means.
