1A)
Tracey
As a director of Homewares ltd, Tracey has breached several duties that she was not meant to when she signed the contract to become a director of the company.
First of all Tracey had a duty to “avoid conflict of interest” so she must avoid any conflict of duty or personal interest, for example she must not be in competition with the company she works for or be on the board of a competitor. However Tracey has breached both of these duties as Tracey has taken the suppliers of Homewares ltd for another company breaching the contract of avoiding conflict of interest. Also Tracey has set up her own company and is on the board of directors of that company, that ‘mirrors’ Homewares ltd but with the only difference being that they also cover gardens meaning this prevents Tracey from having any personal gain from Homewares ltd.
(Adams, A (2010). law for business students . 6th ed.: Adams, A. p475-476.)
Tracey has also had a conflict with the ‘diversion of property clause’ which is when you take a well-established business and as a result try to create your own replicate business. In the case of Cook v Deeks (1916) where Deeks made a new contract with another business whilst he was acting as a director of his previous business, it was held that the three directors breached their duty of loyalty to the company. (http://en.wikipedia.org/wiki/Cook_v_Deeks)
The board could argue that Tracey would not be able to resign mainly because the supplier that has left them was also related to her and she cannot use personal connections to compete with Homewares ltd as this would result in exploiting Homewares ltd for her own personal interest whereas the suppliers were originally them. This can be seen in the case of Regal Hastings V G...
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...ve to consult with anyone about making decisions.
Another advantage is that this type of business would suit Peter the most because he would have a high level of flexibility as he wouldn’t have to consult with anyone about the decisions he has to make and he will also only have to pay income tax and corporation tax. This means that if the business was to fail then the risk is low in terms of his personal finance that would be at risk.
I believe that the best option for Peter to decide is to go into a Limited Liability Partnership as he would have limited liability and free to make any decisions he feels will be right for the business. He would also not be restricted to follow guidelines but would need to include all the partners in everything he does. The flexibility and profit that Peter has at his disposal makes this business type the best for Peter to go into.
Ans. 6 The Court can overrule the decision for terminating Paul as he was not involved in the scheme. Due to his honesty he even admitted to be aware of the scheme. Moreover, no fraud was found in his facility and he should be held responsible for the warehouse for which he is in charge. Furthermore, higher management should be held responsible for not keeping an eye on the activities of supervisors at different locations.
This decision was made in good faith and cannot be conspicuously construed to have self-interests veiled in them. Further, the executive directors made an informed decision to refrain from passing this information to the board and they did believe that this would be in the best interests of the company as disclosure would have brought an end to the company’s existence much before the actual downfall. Thus this judgment met all the requisites prescribed under the provisions of Section 180 (2) of the Corporations Act, 2001 (Rawhouser, Cummings and Crane 2015). This case was the first to comprehensively lay down the business judgment defense and apply it to the facts and circumstances of a case. This defense would negate the apparent breach of the duties of the directors as prescribed by the statute and under common
Let’s start with the core reason for this case study. Valerie Young was a marketing manager for the Wisson Corporation when one day she went to make some photocopies. While attempting to make copies she discovered a paper jam and proceeded to clear it. She came across a document that looked similar to her boss’s personal letterhead. Upon further investigation, she noticed that the document revealed evidence that her boss Lionel Waters was receiving $35.000 per month threw his consulting company he had on the side. I see this is a conflict of interest within the company. The Wisson company policy does not specifically address that an employee cannot have his personal consulting company while working within their company. Valerie stated during this case study that in the past year leading up to this event the Wisson Company worked with eight companies to deliver 300 to 400 perfume samples. Once Lionel Waters took over they only worked with two companies and Valerie and her colleagues soon found out that Mr. Waters’ was not to be questioned on his decisions. I can only assume from the case study that Mr. Waters displayed the use of legitimate power due to his position within the company. In my opinion from my reading, Lionel Waters was using his position to line his pockets thru
The High Court focused primarily on the nature of the employment relationship between Vabu Pty Ltd and its cour...
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