South Africa

The fiduciary duties of a Director post-resignation, is often a contentious issue, especially where such person has joined a competitor or is functioning in competition to his/her previous employer. Although case law on this topic is very limited in South Africa, the case of Big Catch Fishing Tackle Proprietary Limited vs. Kemp (17281/18) 2019 ZAWCHC 20 (5 March 2019) however is important because it, to some degree, clarifies the area of law concerning the fiduciary duties of a Director post-resignation. In this case, the Court had to decide whether a former director of a company still owed fiduciary duties after resigning and if so, whether such director could be provisionally barred from competing (incl. the enforcement of Section 163 of the Companies Act 71 of 2008 (as amended)). A synopsis of the facts is that Big Catch supplied, inter alia, fishing equipment and was involved in fishing expeditions inside of South Africa. Kemp and some others were shareholders and members of a trust and were subsequently appointed as directors of Big Catch. During their tenure as directors, the fishing expeditions business advanced and expanded beyond the borders of South Africa. After some time, Kemp resigned as director of Big Catch, but remained as a shareholder. The reason for the resignation is irrelevant for the purpose of this article, but the important aspect is the effect that such resignation may have on the fiduciary duties owed. The Court was faced with the legal questions of whether Kemp owed fiduciary duties after his resignation and, if so, whether Kemp and others should be provisionally barred from competing with Big Catch. In this case, the Court confirmed that an executive director may not carry on business activities within the Company’s scope of business during such time as he/she is a director, but may change upon resignation, in the absence of a restraint of trade or the limitation on use of confidential information agreements, et cetera. In the …

For an insolvent to bring an end to the sequestration proceedings he/she must first be rehabilitated. After rehabilitation, the insolvent will be able to start fresh with his/her pre-sequestration debts discharged. The rehabilitation process looks different from one insolvent person to another depending on the claims that were proved against, the proceeds that were available to creditors, whether any offenses were committed, etc. As a starting point, an insolvent will automatically be rehabilitated after ten years have expired determined from the date of sequestration. Alternatively, an insolvent can be rehabilitated earlier by means of a court order. The Insolvency Act provides various conditions and different time limits before the insolvent may apply for rehabilitation. The most common conditions are explained below: Composition of not less than fifty Cents in the Rand: The Master will provide a certificate confirming that creditors have accepted an offer of composition in which payment has been made, or security has been given for payment of not less than fifty cents in the rand for every concurrent claim proved or to be proved against the estate. After the lapse of a period of four years: Usually, an insolvent can apply to be rehabilitated after twelve months have elapsed from the date of confirmation of the first account, however, an order may only be granted after the expiration of a period of four years. The four-year period is calculated from the date the provisional sequestration order was granted unless the Master gives a recommendation that the insolvent can be rehabilitated before the expiration of the four-year period. If no claim was proved after six months: If a period of six months has lapsed since the date of sequestration and no claim has been proved against the estate, the insolvent has not been previously sequestrated and has not been convicted of any fraudulent act he/she can apply to be rehabilitated. After …