Discuss the Common Law exceptions to this rule. The rule in Foss v Harbottle states that...

 
  

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Discuss the Common Law exceptions to this rule. The rule in Foss v Harbottle states that a member cannot take action on behalf of the company. However, there are exceptions to this rule. Man, Min and Mon are the directors of Bizi Sdn Bhd, a company dealing in the export of textile. Last month, Min was sent to Singapore on behalf of Bizi Sdn Bhd to negotiate a contract with a Singaporean company. Unfortunately the negotiations were not successful, and it was made clear to Min that the Singaporean company did not want to offer any contract to Bizi Sdn Bhd. Min reported this to the board of directors upon his return. Two weeks later he registered a new company and managed to secure the contract with the Singaporean company under his own name. He has made a very substantial profit from this contract. Bizi Sdn Bhd has now discovered this and wishes to sue Min for breach of fiduciary duty as a director and recover the profit he has made. Advise Bizi Sdn Bhd on the legal position. Discuss the Common Law exceptions to this rule. The rule in Foss v Harbottle states that a member cannot take action on behalf of the company. However, there are exceptions to this rule. Man, Min and Mon are the directors of Bizi Sdn Bhd, a company dealing in the export of textile. Last month, Min was sent to Singapore on behalf of Bizi Sdn Bhd to negotiate a contract with a Singaporean company. Unfortunately the negotiations were not successful, and it was made clear to Min that the Singaporean company did not want to offer any contract to Bizi Sdn Bhd. Min reported this to the board of directors upon his return. Two weeks later he registered a new company and managed to secure the contract with the Singaporean company under his own name. He has made a very substantial profit from this contract. Bizi Sdn Bhd has now discovered this and wishes to sue Min for breach of fiduciary duty as a director and recover the profit he has made. Advise Bizi Sdn Bhd on the legal position.

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In this scenario the Common Law exceptions to the rule in Foss v Harbottle may be applicable Some of ... View the full answer