Pursuit Revisited

Abstract

Some Australian cases concerning company directors have required pursuit of a conflict (rather than real sensible possibility of conflict) in order to found breach of the duty to avoid conflicts. It has been shown elsewhere that real sensible possibility of conflict is more suitable as a baseline standard. However, it is possible that the concept of pursuit may explain or organize categories of cases and requirements relating to conflicted directors. This article critically analyses the suitability of adopting pursuit as an organizing principle in the context of competing directorships, situations in which positive requirements are imposed on conflicted directors, actual conflicts (in the sense used by Millett LJ in Bristol and West Building Society v Mothew) and statutory duties concerning improper use of position or of information. Relevant concepts employed by the courts in relation to conflicted directors are also arranged along a spectrum to bring clarity to the analysis.

Keywords: directors' duties; fiduciary duties; conflicts; competing directorships

JEL Classification: K22; K19