Symington and Others v Pretoria-Oos Privaat Hospitaal Bedryfs (Pty) Ltd

The respondent company operated a private hospital. The appellants were its former directors and shareholders. While still directors, they concluded arrangements whereby a radiology section of the hospital was leased at a nominal rental to a nominee of the first appellant, which in turn sublet most of the premises to third-party radiologists at a substantial commercial rental. The respondent alleged that this diverted a corporate opportunity and breached the appellants’ fiduciary duties. The respondent instituted action in November 2000 claiming approximately R7.3 million, representing the value of the rental stream and related payments. The appellants raised special pleas of extinctive prescription under the Prescription Act 68 of 1969.

The appeals were upheld. The respondent’s cross-appeal was dismissed. The appellants’ special pleas of prescription were upheld, resulting in the dismissal of the respondent’s claim as prescribed.

The case clarifies the distinction in South African law between claims for damages and claims for disgorgement of profits arising from breach of fiduciary duty, particularly for purposes of prescription. It affirms that prescription depends on proper categorisation of the claim and reinforces that directors may terminate their office by agreement with the company, even where articles provide for unilateral resignation procedures.