When a managing director of a company acts in breach of his fiduciary duties to the company, does he have to disclose to the purchaser of a part of the company’s business?
British Columbia, Canada
The following excerpt is from Carlson v. Trans-Pac Industries Corp., 1989 CanLII 2870 (BC SC):
Furs v. Tomkies, supra, is another example of a director acting in breach of his fiduciary duties to the company which employed him as a managing director. He agreed to disclose to the purchaser of a part of the company’s business his knowledge of the company’s secret tanning formula. The effect of this agreement was to render the formula valueless to the company. The case holds that a director may not subordinate the company’s interest to his own. When his duty to the company conflicts with his self-interest, the law of fiduciary requires him to put the company’s interests first.
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