The remedies for breach a general law duty include an injunction, compensation or damages, an account of profits, rescission of a contract, and a constructive trust. Firstly, the company can seek an injunction, which is an order of the court requiring the director to stop doing something or to undertake a particular action, in this case, EY can terminate the contract. Secondly, in this case, even though EY has not yet suffered any loss or damage, the court can still order the director to pay any profit the director made because of the breach of duty to the company. The director will have to account for the profit of commission to the company.(Regal(Hastings) Ltd v Gulliver) Thirdly, a director can breach their duty to the company if the director enters into a contract with the company and the director's interest in the contract is not disclosed. If the court finds that there has been a breach of duty, the court can order the contract to be rescinded. In this case, Roberta did not disclose her interest gained from WHS in the contract properly, there should be a rescission of the contract. However, EY makes large profits from the contract, they may not want to rescide it.
What statutory penalties (if any) can be imposed against her? Who can impose them? consequences of contravention of the following statutory provisions in this case and its related penalties imposed against Roberta: 1. Disclosure of interest. If a director contravenes the requirement in s 191 to disclose a material personal interest in a matter that relates to the affairs of the company, the court can order the director to pay a fine of up to $1100, or be sent to prison for up to three months, or both: see Schedule 3 to the Corporations Act. court can impose these penalties. 2. Improper use of position or information
Section 182 and Section 183 prohibit improper use of position and information by directors, other officers and employees. Where a court finds that a person has breached s 182 or 183, the court can make the following order: 1). an order disqualifying the person from managing company for a specified period of time. 2). an order to pay a penalty of up to $ 200,000, and/or an order to pay compensation to the company for any loss or damage it has incurred because of the breach of the section. The two sections are civil penalty provisions and are imposed by court and enforced by ASIC.
Conclusion
EY can sue Roberta and get follows remedies:
1. terminate the contract. 2. The director will have to account for the profit of commission to the company.
3. rescission of the contract statutory penalties can be imposed against Roberta: 1. order the director to pay a fine of up to $1100, or be sent to prison for up to three months, or both, 2. disqualifying the person from managing company for a specified period of time. 3. pay a penalty of up to $ 200,000
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