Transvaal Lands Co v New Belgium (Transvaal) Lands and Development Co [1914]

Transvaal Lands Co v New Belgium (Transvaal) Lands and Development Co [1914]

Case Facts  

Samuel, a director in Transvaal was also a director and a shareholder in New Belgium, and Harvey was a shareholder. This was not disclosed by Harvey and Samuel to the other directors of Transvaal.

The two of them then convinced the other directors in Transvaal to acquire shares in New Belgium. 

Case Issue:

Was the duty to avoid conflict of interest breached by the directors?

Case Decision:

Samuel, the director of Transvaal breached their fiduciary duty by putting first their personal gain in acquiring shares from New Belgium rather than promoting the interest of Transvaal.

Even though Harvey was only a shareholder in New Belgium, it was still necessary for them to give the directors of Transvaal a notice by disclosing their position and interest in New Belgium.

Importance of the Case:

The importance of citing the case is that the fiduciary duty of avoiding conflict of interest blankets direct and indirect interests.

Learn more about the fiduciary duties of the company directors here.