Fiduciary duties are the assumption by a director of duties, responsibilities and liabilities that arise by reason of the attributes of the office imposed by statutes and under the common law.
The Singapore Court of Appeal decision in PT Sanidpala Arthaputra & Ors v STMicroelectronics Asia Pacific Pte Ltd & Ors establishes the principles concerning the imposition of tortious liability on directors in regard to contractual breaches by their company.
A director who permits authorisation or procures his company to breach contracts would typically not be personally liable for the breaches made by the company. Unless the director acts in breach of his personal duties.
A director of a company is subject to a wide scope of fiduciary duties. The issue as to whether certain acts or omissions may constitute a breach of these fiduciary duties is an issue that is often brought before the courts, and may pose further complications if the entity concerned is a family-run organisation.
The counterclaim that was brought by Oxel against Sandipala’s directors on the ground of unlawful means conspiracy made the Court of Appeal consider when a director should be held personally liable for the consequences arising from his company’s breach of a contract, to which he himself, is not a party. Generally, directors act to represent their company, and so may decide that it is sometimes within the company’s scope of interest to breach its contract and compensate the other contracting party as opposed to continuing to perform.
In this second articles, we look at the director’s appeal to the High Court in Abdul Ghani bin Tahir v Public Prosecutor [2017] SGHC. On appeal, the High Court reduced the sentence imposed on the Defendant to 12 months’ imprisonment and a S$500,000 fine. The High Court also overturned the costs order.
