James Hardie Case

The case Caparo Industries v Dickman is a leading case that identifies a test to determine whether or not an employer owes a duty of care within a negligence case. In this case Caparo Industries had taken over a company called Fidelity and they seud Dickman for negligence in the preparation of accounts. Sir Neil

However, it is only one of the various factors relevant to a courts consideration of whether they have acted in good faith where directors make decisions affecting their company’s interests their own view of their conduct. which means that directors will not necessarily comply with their duty merely because they have an honest belief that they are acting in the company’s best interest, which means that directors will not necessarily comply with their duty merely because they have an honest belief that they are acting in the company’s best interest.For example, in case Advance Bank v

Issue: Have the directors of the company breached their duties mainly related to the company’s insolvent trading.

2 This is an OPEN book examination. You can only use your prescribed text book and the Corporations Act 2001. No other materials are allowed.

Next are the Options proceedings. This proceeding relates more to the transactions made by the directors for their own benefits as well for the ones associated to them. The specific parties in this proceedings are; Environinvest Ltd, James Patrick Downey the liquidator of the company, and S.T.Y. (Afforestation) Pty Ltd as the plaintiffs. Roger Neil Pescott, Caroline Pescott, Euan Pescott, Blackburne Pty Ltd, Brabourne Pty Ltd, Mt Ross Pastoral Pty Ltd, Eurambeen Pty Ltd, Maridale (Victoria) Pty Ltd, Carnac Pty Ltd, Clive Randal Dossetor and Grant Anthony Robertson as the list of defendants.

Corporate capacity and authority were essential legal concepts which contained rules for when and how a company ought to be legally recognised as having validly acted and entered into a binding contract with third parties. Broadly speaking, the rules which applied to corporate capacity were the ultra vires doctrine and the doctrine of constructive notice. In regard to the concept of corporate authority, both the ultra vires doctrine and the doctrine of constructive notice also applied however their application was curtailed by the Turquand rule. The Turquand rule therefore only applied when the authority of directors was in question. A definitional overview of the concepts of corporate capacity and authority will be provided below, along with brief description of the doctrine of constructive notice and the Turquand rule.

Hanrahan, P., Ramsay, I. & Stapledon, G. (2010), Commercial Applications of Company Law 10th ed. Sydney, NSW: CCH

In many misfeasance cases against directors, those breaches maybe relatively uncontroversial. This draws into focus the question of whether the director has any common law or statutory defence, including the Duomatic principle and ratification by shareholders (CA 2006 S.239), available to a claim against him for restitution to the company. S.239(6)(a) preserves the Duomatic rule that if an informal unanimous consent is reached among voting shareholders, it is unnecessary to pass such ratification resolution through general meeting or written resolution. The first part will examine the scope and requirements of this rule to illustrate the validity of such assent. S.239(7) leaves the door open for rules of law, which refers to common law principles, to continue guiding ratification. It will be assessed how these rules impose limitations on the general ratification power conferred by s.239.

Throughout the case, it can be analyzed and expected to say that Deloitte & Touche have committed a breach to its fiduciary duty to Vertical Pharmaceutical at the end. Vertical Pharmaceuticals Inc., realized a huge loss as a result by Deloitte & Touche. Therefore, this shows that Deloitte & Touche did indeed breach their fiduciary duties. All the falsified reports and malpractices that were said to be revealed by Deloitte & Touche would be said to not be real by the forensic audit that was conducted. At the end, the court can rule that Deloitte & Touche did indeed breach their fiduciary duty to Vertical Pharmaceuticals.

However, as an ultra vires act is not void vis-à-vis a third party [Section 25(1) CA 1965], the question of recovery of the company’s property from a party to an ultra vires transaction would not arise. For all practical means and purposes, the ultra vires exception to the rule in Foss v Harbottle is effectively defunct. Any one of the member may ask a court to restrain it from doing something that is ultra vires, in the sense of being beyond the company’s restricted object, Simpson v Westminster Palace Hotel Co (1860). Such a claim is permitted as an exception to the proper claimant aspect of the internal management principle. (Minority Shareholders and Derivative Actions,

a whole. This was based on an precedent from a 1970 case law in which it was held that a director of a group of company is not in breach of his fiduciary duty if the decision was based on what a reasonable person could consider to be an act that was in the best interest of all companies in the group.

There is no clear framework of the rules that would cover the contingencies of a ruling to pierce the corporate veil Idoport Pty Ltd v National Australia Bank Ltd. The corporate Veil usually protects owners and shareholders from being held liable for corporate duties. Yet again a decision made by the court to lift that veil and would place the liability on shareholders, owners, administrators, executives and officers of the company without ownership interest. The purpose of this essay is to conduct an analysis on the concept of lifting the corporate veil and to review the different views on its fairness and equitability to present a better understanding of the notion, the methods used was throughout researching the numerous scholars views on the subject, case law and statutes examples, and the evidence provided by the empirical study of Ramsay & Noakes. When we discuss the lifting the corporate veil the first case that pops out is the case of Salomon V A. Salomon & Co Ltd, since the decisions of applying the corporate veil were first formed as a consequence of this case. The idea covers all of company law and distinguishes that a company is a separate legal entity from its members and directors. Furthermore, spencer (2012); have indicated that one of the core principles that followed the decision in Salomon v Salomon was the wide acceptance one man company’s. However In order to form a

As a director, he breached the contract of loyalty and care since he used his own judgment in making the final decision (Jane 2012). The company was insolvent and did require the contribution of the other directors as well as information from the company management in order to make informed decision. Taking the loan and expansion was not the only alternative especially with the coming up of a new company that offered better services at subsidized price. When a company is facing liquidation, it is imminent that all available alternatives as well as resources and information are analyzed since any rush decision would affect the company negatively (Gilbert 2015). If he excised his duty of care properly, he should have made sure the shareholders were informed of the situation. He didn’t have the ability to make proper judgment on the situation without his partners. He should have made sure the other directors were present and if one didn’t want to attend with no proper reason, he should have notified the shareholders beforehand since the matter was very sensitive to the future prospects of the

Refusal of access to the company’s financial statements. (See Shum Yip Properties Development Ltd v Chatswood

In the first place, that the members are entitled to hold a registered company to its registered objects has been recognized long since. Hence whenever an ultra vires act has been or is about to be undertaken, any member of the company can get an injunction to restrain it from proceeding with it. In this case the House of Lords observed that the doctrine of ultra vires, as it was explained in the Ashbury’s case, should be maintained. But it ought to be reasonably and not unreasonably understood and applied and that whatever may fairly be regarded as incidental to the objects authorized ought not to be held ultra vires, unless it is expressly prohibited.