CMS Dolphin Ltd v Simonet [2001] EWHC (Ch) 4159 is a UK company law case concerning directors' duties

Directors' duties

Directors' duties are a series of statutory, common law and equitable obligations owed primarily by members of the board of directors to the corporation that employs them. It is a central part of corporate law and corporate governance...

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Facts

Mr Simonet resigned from his position as managing director of CMS (an advertising company) and he set up a new company. CMS’s staff followed and so did the major clients. CMS sued Mr Simonet for the profits he made, alleging that he had breached his duty of loyalty to the company. Mr Simonet contended that he owed no duty because he had left the company.

Judgment

Lawrence Collins J held that Mr Simonet resigned without giving proper notice, and so he was in breach of contract. He had made no proper disclosure and had misused confidential information. The maturing business opportunities were the company’s property, ‘where he knowingly had a conflict of interest, and exploited it by resigning from the company’. Resignation was not a fiduciary power in itself, and no obligations continued after the end of the relationship.