2007GIR Assessment 2 ILAC Assignment V6
Assessment No. 2: Hypothetical ILAC Assignment
Tutorial: Tuesday 10am-11am
1. Is Patricia an Officer of Stadium Enterprises Pty Ltd (SEPL)?
2. Has Patricia breached her duty to act with due care and diligence?
3. Has Patricia breached her duty to act in good faith in the best interests of SEPL?
4. Did Patricia improperly use information to gain an advantage, causing detriment to SEPL?
5. Has Patricia acted recklessly, dishonestly, and failed to exercise and discharge her duties for a proper purpose and in the best interests of SEPL?
6. Did Patricia engage in insider trading?
7. Is Dan an Officer of Fancy Pants Pty Ltd (FPPL)?
8. Did Dan …show more content…
6. Section 9 defines an Officer to include a Director of a company. (slides) We are told Dan is a Director of FPPL so he will be an Officer within the Corporations Law.
7. Section 588G prescribes that an Officer has a duty to prevent insolvent trading by a company. They should not allow the company to become insolvent by incurring debts, or incur a debt while it is insolvent. Dan used FPPL’s credit to purchase a $300,000 machine even though he knew FPPL was unable to pay company’s bills, which illustrates that Dan traded whilst FPPL was in an insolvent position. Thus, Dan is likely to have breached section 588G. R v Hannes (2002) 173 FLR 1. Hannes bought TNT options and realised a profit of $2million when a takeover of TNT was announced during their