Common Law Case and Civil Case
“Company directors and senior employees to whom the board of directors has delegated managerial duties have a fiduciary relationship with the company. All directors and any person occupying the position of director by whatever name called or persons who purport to act as such are still regarded as directors, whether or not they are designated or otherwise described as a company director, are required to act in good faith in the interests of the company, to act for proper purposes and to avoid conflicts of interest and duties and also not to delegate powers except with proper authorisation. They also have the duty of care and still 6”.
To some extent, the case of Green vs.Bestobell Industries Ltd can be said to that one of lifting the corporate veil. The company’s operation and its corporate entity were not considered simply cause of the acts of directors who acted arbitrarily. The principle of the separate entity was not aptly taken into consideration in order to safeguard the interests of the company. A director who acts even though for the
the interest of the company but then without the powers bestowed upon him, the principle of separate entity need to be invoked for the sole purpose of protecting the corporate.
The difference between Gilford Motor Co.Ltd vs. Horne and Shangai Kiangdong Equipment Ltd vs. Xu
In Gilford Motor Company the director signed an agreement with the company Gilford Motor that while employment and after employment that he shall not solicit the customers of the company. But upon exit from the company, the former director went as far dishonoring in agreement with the company. The court ruled he was bound by the agreement. Even though the doctrine of separate legal entity was not properly followed because an individual and the company are different people as long as Mr. Horne was operating for the interest of the company, there was an apparent need for the honorable court to lift the corporate veil and observe behind the veil in order to have the directors answerable for the acts done allegedly on behalf of the company.