(05) (Live Presentation and Webinar) Directors’ Duties

Date:  07 October 2023 (Saturday)  Time: 9:30am-12:45pm   Language: English  Level: Elementary

Speaker:         Dr. Rita Cheung, MCAL Solicitors LLP

Lawyer CPD / ACCA CPD / SFC CPT / Insurers’ CPD Pts: 3                 Fee: HK$1,790

Highlight: This seminar discusses the landmark decision in Lehtimäki v Cooper [2020] UKSC 33 where the Supreme Court has dramatically tagged members of a charitable company as ‘fiduciaries’. The Supreme Court held that members of a charitable company owed fiduciary duties to the charity objects (as opposed to the charitable company), and that the court had an ‘inherent’ and ‘exceptional’ jurisdiction to direct Dr Lehtimäki, a ‘fiduciary’ member of the charitable company to vote in favour of a resolution. The decision has confirmed judicial commitment to control members of charitable companies just as it can control their trustees, and has prompted reflection on the quest to define who is a fiduciary.

  1. The duty of loyalty
  2. The no-conflict and no-profit rules

The ‘distinguishing’ obligation of a fiduciary is the duty of loyalty: Bristol & West Building Society v Mothew [1996] EWCA Civ 533. The duty of loyalty encompasses the no-conflict and no profit rules. The testing case: Poon Ka Man Jason v Cheng Wai To (2016) 19 HKCFAR 144, [2016] HKCFA 23

What is test to determine a conflict — the strict capacity test or the flexible capability test? Can a contract (shareholder unanimous consent) ‘modify’ fiduciary duties?

  1. The proper purposes rule

The testing case: Re Bank of East Asia Limited [2015] HKCFI 944. When can a minority member request for inspection of company document when directors exercised powers to entrench control in friendly hands? What constitute a ‘proper purpose’?

  1. Is a member of fiduciary?
  2. Remedies

The unqualified nature of the ‘no conflict’ rule is expressed not only in its wide scope, but also in the stringency of the remedy for the breach: the fiduciary is stripped of all ill-gotten gains. Must a fiduciary account for ‘all’ his profit? What is ‘equitable compensation? Proprietary remedies for breach of fiduciary duty.

  1. Inspection rights

Director inspection rights; Director inspection rights

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Rita Cheung
Dr. Rita Cheung L.L.B., P.C.L.L. (HKU); L.L.M, Ph.D. (King’s College Lond.). She obtained her Ph.D. in Law on the topic of minority shareholders’ rights from King’s College London. She was called to the Bar in 2006, and taught Law upon obtaining her doctorate degree. She writes in the field of company law in refereed journals including Cambridge Law Journal, Lloyd’s Maritime and Commercial Law Quarterly, and Journal of Business Law. She has been regularly invited to speak at international conferences on money laundering and corporate crime. She is a member of the editorial board of the Journal of Financial Crime.