economic benefit by excluding any other extraneous benefits owned to the company because of
the opportunity is in breach of his duty as a fiduciary.10 CA-2006 creates controversy for modern
directors to be uncertain in terms of Sec.175. The legislation focuses on safeguarding the
integrity of Director’s loyalty11 and on promoting company’s culture.12 In order to accomplish a
concise application of no-conflict-no-profit rule, the author of this essay is bringing out
arguments to make the rule more flexible in the modern use.
Critical Analysis on flexible approach to no-conflict-no-profit rule
I. No-profit and no-conflict applied simultaneously
Sec.175,17713,18214 are required to encompass equitable obligations colliding together as no-
conflict, no-profit and self-dealing rule.15 The initial issue answered with this context is in
relation to the separate rules of ‘no-conflict’ and ‘no-profile’ rule. Firstly, to establish the conflict
of interest notion, the interest of Directors and transaction in question needs to be linked. The
objective of no-conflict rule is to preclude director from being dominated by personal interests
whereas no-profit rule precludes director from misusing his position for personal monetary
advantages.16 This rule had been applied simultaneously to directors as precisely applied to
managers and trustee pre-2006 era.17 However, after the enactment of CA-2006, these two rules
have been adopted to act separately.
Whether these two rules are applied separately has not been clearly established in recent cases
and this issue was subjected to academic reviews.18 Many scholars have argued to reconsider the
demarcation of objectives between the rules. CA-2006 expressly states about conflict and a
mention of profit to be too vague in Sec.175. Even though academics argue a strict scrutiny
involving the distinction of the rules being appreciated, the author of the essay beg to differ.
10 Prentice [1984] MLR 464
11 Douglas Kershaw, ‘Lost in Translation: Corporate Opportunities in Comparative Perspective' (2005)
25(4) Oxford Journal of Legal Studies 603
12 Lowry and Edmunds, ‘The Corporate Opportunity Doctrine: The Shifting Boundaries of the Duty and its
Remedies’ (1998) 61 Modern Law Review 515
13 Ibid n4, s177
14 Ibid n4, s184
15 Alan Dignam and John Lawry, Company Law (7th edn, Oxford University Press 2012) 413
16 Kak Loui Chan v Zacharia (1984) 154 CLR 178
17 Keech V Sandford [1726] EWHC Ch J31
18 Pearlie Koh, ‘Once a Director, Always a Fiduciary?' (2003) 62(2) Cambridge Law Journal, 403

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