Competency

Question 1

common law duty

Answer 1

What a reasonable person would do given their knowledge and experience

Question 2

s137: directors duty of care

Answer 2

Directors must act with reasonable care, diligence, and skill

Question 3

s137 old approach and case

Answer 3

The nature of the company (Davidson v Registrar of Companies)

The nature of the decision

The position of the director and the nature of responsibilities undertaken by him

Question 4

s137 new approach and case

Answer 4

more of an emphasis on improving corporate governance (Daniels v Anderson)

Question 5

common breaches with cases (3)

Answer 5

Lack of familiarity (Dorchester Finance v Stebbing)

Loans and Investments (Mako Holdings v Crimp)

Blank cheques (Vercauteren v B-Guided Media)

Question 6

remedies for breaching s137

Answer 6

Company actions: remedies under s169(3) and s165 for breaches by way of derivative action

Shareholder actions: can require directors to take certain action under ss170-172

Creditor actions: possible under s301 after liquidation

Question 6

section for reliance

Answer 6

s138

Question 7

reliance requirements

Answer 7

Belief on reasonable grounds that the person is reliable and competent

Director must act in good faith, make proper enquiry if needed (s138(2)(b)), and not know that reliance is unwarranted (s138(2)(c))

Ignorance is not excuse

Question 8

reliances cases

Answer 8

Feeney and Ors - successful
Mason v Lewis - failed
FXHT Fund Managers v Oberholster - failed