Kangaroo Case Summary

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Recommended: Duties of chief financial officers

The Kangaroo’s directors, chairman and non-executive directors have breached some of the statutory directors’ duties since they put their own interest ahead of the company. Ralph is considered as a director since he is the managing director meaning that he possess the same amount of power directors have therefore he is considered as a “de facto” director. Russell is the Chief Financial Officer so he has a special responsibility in regards to the financial statement. The executive directors who are Mike, Matt and Sally have breached s180(1) because according to Daniels v Anderson (1995) 37 NSWLR 438 the minimum standards of care for all directors including non-executive directors to monitor management and they have an obligation to attend all …show more content…

s182 by issuing a loan without informing the directors hence he is abusing his powers so the principle in R v Byrnes (1995) 183 CLR 501 applies and used part of the loan to purchase a diamond ring for his own personal interest similar to the case of Paul A Davis (1983) 1 NSWLR 440 as it misuses the company fund. It can be argued that the money used to purchase the diamond ring can be used to generate profit for the business. Moreover, he requested for the loan despite the knowledge of the poor financial situation and possibility of insolvency which happened in the case of ASIC v Plymin (2003) VSC 123. Thus, he breached s588G(1) because at that time there were reasonable grounds that the business would become insolvent from the decline in sales due to the new policy implemented and the company was having trouble paying its suppliers. Therefore, despite being aware of the possibility of insolvency, he still issued the loan which led to the company winding up. This is similar to the case of Circle Petroleum v Greenslade (1998) 16 ACLC 1577. Hence, he has misused his position to gain an advantage for himself and caused detriment to the company since the company is already having issues with paying its suppliers. Consequently, this led to the breach of s184 since he was intentionally dishonest by not disclosing the issue of loan and did not …show more content…

According to case ASIC v Rich[2003] MSWSC 85, chairman’s skills and experience are regarded as responsibilities of chairman. According to s180(1)(b), if they occupied the office held by and had the same responsibilities within the corporation as the officer or Director, they had the same responsibilities within the corporation as, the directors or officer. Therefore, they need to exercise their power and fulfill their duty under the statutory duty of care s 180(1). Anton did not inquire the relationship between Ralph and Mattella even though he suspected their relationship which means he had breached his duty of care and diligence which is similar to the case of Westpac Banking Corporation v Bell Group Ltd (2012) WASCA 157.Furthermore he breached s181 because he agreed to Ralph’s proposal of issuing the shares to contravene the law to keep his job, this relates to ASIC v Sydney Investment House Equities Pty Ltd (2008) NSWSC

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