Duties of Directors in Corporations in Australia

(a)
Issue: The issue in this question is if Tony Stark had fulfilled his duty as a director of Marvel
Universe Pty Ltd which required him to act in good faith and for a proper purpose.
Rule: the duty to act in good faith has been incorporated in section 181 of the Act. As a result of
this duty, it becomes necessary for the directors to act in good faith and keeping in view the best
interests of their company and also for a proper purpose. This responsibility includes the
avoidance of any conflicts of interest and to reveal the presence of such conflicts and manage
these conflicts in case they arise. This duty is related with trust and fidelity. Therefore it has been
described as a fiduciary duty. That is present under the common law and also under the
Corporations Act. At the same time, extra-large two of the Act has mentioned the duty which
requires that their position in the company should not be used improperly by the directors.
According to this duty, their position in the company should not be used improperly by the
directors for achieving a personal advantage or for causing any loss to the Corporation.
Application: in the present case, Tony Stark had used his position as a director of Marvel
Universe Pty Ltd for achieving a personal benefit when he decided to form a new company,
Endgame Pty for exploiting the opportunity offered by Dr. Thanos. This duty has also been
breached by Tony Stark when he contacted the clients of Marvel Universe, including Antony
Man and Peter Parker.
Conclusion: in the present case, there has been a breach of duty by Tony Stark as a director of
Marvel Universe. For this purpose, the remedies provided by Corporations Act for the breach of
duty by the directors are available to the company.

(b)
Issue: In this question, the issue arises if the duties that have been imposed on the directors by
common law and by the Corporations Act are still applicable even after the person has resigned
as the director of the company.
Rule: in this regard, the law provides that the duties present on part of the directors will still be
applicable even if the person has resigned from the post of director of the company. The same
bills have been expressed by the court in Advanced Fuels Technology v Blythe & Ors [2018]. As
mentioned above, section 181 prescribes that the directors and other officers of the corporation
are required to use their powers in good faith (ASIC v Vines [2006] NSWSC 760). For this
purpose, they should always keep the best interests of the corporation and should act for a proper
purpose. Regarding the use of position by the directors, section 182 is provided that the director
should not use their position in the company improperly. The improper use of position may take
place if the director has used his or her position for achieving a benefit or to cause any loss to the
corporation. It needs to be mentioned that this duty remains applicable even after the person has
resigned from his or her position as the director of the company.
Application: in the present case, if Tony Stark resigns from the position of the director of Marvel
Universe Pty Ltd in order to form another company, Endgame Pty Ltd. only with a view to
exploit the opportunity that became available to him due to his position as a director, the answer
will remain the same. Due to this reason, Tony Stark can be held liable for the breach of his duty
towards Marvel.