AWA Limited v Daniels (1992) 10 ACLC 933: Analysis of Directors' Duties

Business and Corporations Law
AWA Limited v Daniels (1992) 10 ACLC 933

Table of Contents
1. Introduction.........................................................................................................................2
2. Facts of the case..................................................................................................................3
3. Duties Beached...................................................................................................................3
4. Analysis of Decision of the Court.......................................................................................4
5. Relevant of the case............................................................................................................5
6. Conclusion..........................................................................................................................7
7. References...........................................................................................................................8

1. Introduction
In modern Australian precedents, the early English cases are not used anymore, and they rely
on objective test in order to analyse whether a minimum standard of care is taken by
company directors. The judgement provided in the AWA Ltd v Daniels (1992) 10 ACLC 933
is considered as a landmark case which paved the way for modern law. However, while
giving the judgement in Daniels v Anderson (1995) 37 NSWLR 438, the court provided that
there are higher standards which are necessary to be maintained by company directors
(Wolters Kluwer, 2018a). The directors are required to have a general duty to ensure that
he/she make inquiries and be informed about different aspects of the company’s operations
and the business. The directors should understand and learn about the financial statements
and affairs and management. Furthermore, the directors are required to take whatever steps
which are necessary to be taken by them in order to guide the company to achieve its
corporate objectives (Bottomley, 2016). The Corporations Act 2001 (Cth) (the Act) governs
the provisions which are necessary to be followed by the company directors in order to
ensure that directors are focusing on achieving corporate objectives. In this case, the
problems relating to delegated authority and incorrect procedures were raised for the
reporting of the board. It was held that the executive and non-executive directors owe equal
duty of care, and they should be familiar with the company’s business. This report will
evaluate the facts of the case and analyse the duties which were breached. Furthermore, the
judgement of the court will be analysed, and the relevance of the case will be discussed.