Howard v Herrigel NO and Another (130/89)
Howard v Herrigel NO and Another (130/89) [1991] ZASCA 7; 1991 (2) SA 660 (AD); [1991] 2 All SA 113 (A) (8 March 1991)
The Supreme Court of Appeal held that, in application proceedings, the court must accept the respondent's version of disputed facts unless the applicant elects to refer the matter for oral evidence or trial. On Howard's version, he did not have knowledge of the fraudulent conduct or the absence of security for investments, and he relied on the assurances of Smith and Gelb. While Howard may have been negligent in not taking more active steps to verify the company's affairs, negligence does not suffice for liability under section 424(1), which requires recklessness or knowing participation. The…
Source excerpt
- Reckless Trading
- Director Liability
- Section 424 Companies Act
- Application Vs Action Proceedings
- Fiduciary Duties
- Proof Of Knowledge