Self-Interest

Question 1

“no conflict rule” (and case)

Answer 1

common law rule where a fiduciary cannot gain any benefits from transactions with the company if there is a conflict between their personal interest and duty (Don King v Warren)

Question 2

“no profit rule”

Answer 2

common law rule where a fiduciary cannot use their position/opportunities/knowledge to gain personally from company transactions

Question 3

s140 rule

Answer 3

directors have to disclose their interests with the company

Question 4

info to be disclosed under s140

Answer 4

Nature and monetary value of director’s interest;
or
Nature and extent of the interest

Question 5

consequences of directors interests

Answer 5

Failure to disclose no longer makes the transaction automatically voidable by the company, companys ability to cancel is limited by s141

Question 6

s141 rules (2)

Answer 6

First rule: transaction cannot be avoided if the company received fair value for it (s141(2))

Second rule: where fair value isn’t available, company can avoid the contract any time before the expiry of 3 months after disclosure

Question 7

corporate opportunity

Answer 7

Director cannot allow their personal interests to conflict with the company’s interests

Question 8

corporate opportunity under common law

Answer 8

Director must not take a personal advantage of an opportunity presented to the company

Question 9

corporate opportunity cases (2)

Answer 9

Regal Hastings
Pacifica Shipping Co v Anderson

Question 10

corporate opportunity under the act

Answer 10

s141: If a director wants to enter a transaction that the company could’ve had, the information has to be gained personally, not in the capacity of a director

Question 11

remedies for corporate opportunity and case

Answer 11

Wrongdoer pays plaintiff the profit made (Regal Hastings)