Director's Duty of Care
Major Assignment: Directors’ Duties Case
Part A: Whether the directors are in breach of their duties of care, skill and diligence
Issue1: who owes the duty?
According to S 9, the person who is appointed to be a director or the person who is appointed to be an alternate director and is acting in that capacity, is a director of the company. (S9)
As we can see from the case, Peter Pansy, Fred Fuchsia and Marie Gold are directors of the company, and Alison Astor who is appointed to fill a casual vacancy on the Board is also a director; therefore, they all owe duties. As the executive directors appointed a skilled person to manage the Australian wide floral delivery service on the internet, the pointed person is also a director. In a word, all of them are the directors, who owe the duty of care.
Issue2: Who is the duty owed to?
In this case, generally the directors are owed duties to the company as a whole. The company can sue those directors for remedies and enforce breaches of duties. The company also owned duties to individual shareholders.
Issue3: what are the duties?
The director’s duties can arise from both statutory and general law; except remedies, there is no significant difference between the sources of duty. ( Hanrahan, P., Ramsay, I. & Stapledon, G. Commercial Applications of Company Law, Edition 12, 10-200)
In order to implement their duties, directors must guide and monitor the management of the company; the well-known AWA case developed a series of detailed applied standards. (Daniels v AWA (1995) 13 ACLC 614) The executive appointed by directors committed a misleading and deceptive conduct, false statement when disclosing the financial status of the project. As s190 states that if directors delegate a power under s198D, the directors are responsible for the exercise of the power by the delegate. The executive, as a director of the company, was given powers by other directors and must wield the powers to manage the daily activities in the
Part A: Whether the directors are in breach of their duties of care, skill and diligence
Issue1: who owes the duty?
According to S 9, the person who is appointed to be a director or the person who is appointed to be an alternate director and is acting in that capacity, is a director of the company. (S9)
As we can see from the case, Peter Pansy, Fred Fuchsia and Marie Gold are directors of the company, and Alison Astor who is appointed to fill a casual vacancy on the Board is also a director; therefore, they all owe duties. As the executive directors appointed a skilled person to manage the Australian wide floral delivery service on the internet, the pointed person is also a director. In a word, all of them are the directors, who owe the duty of care.
Issue2: Who is the duty owed to?
In this case, generally the directors are owed duties to the company as a whole. The company can sue those directors for remedies and enforce breaches of duties. The company also owned duties to individual shareholders.
Issue3: what are the duties?
The director’s duties can arise from both statutory and general law; except remedies, there is no significant difference between the sources of duty. ( Hanrahan, P., Ramsay, I. & Stapledon, G. Commercial Applications of Company Law, Edition 12, 10-200)
In order to implement their duties, directors must guide and monitor the management of the company; the well-known AWA case developed a series of detailed applied standards. (Daniels v AWA (1995) 13 ACLC 614) The executive appointed by directors committed a misleading and deceptive conduct, false statement when disclosing the financial status of the project. As s190 states that if directors delegate a power under s198D, the directors are responsible for the exercise of the power by the delegate. The executive, as a director of the company, was given powers by other directors and must wield the powers to manage the daily activities in the
Bibliography: [ 2 ]. Daniels v AWA (1995) 13 ACLC 614 [ 3 ] [ 4 ]. Sheahan v Verco (2001) 19 ACLC 814 [ 5 ] [ 6 ]. ASIC V Plymin (2003) [ 7 ] [ 8 ]. Statewide Tobacco Services v Morley (1990) [ 9 ]