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Brief of Fodare Pty Ltd v Shear Assignment

   

Added on  2021-06-17

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[.FODARE PTY LTD V SHEARN [2011] NSWSC 479]Director duties (Group Details: )

[.FODARE PTY LTD V SHEARN [2011] NSWSC 479]May 13, 2018ContentsIntroduction......................................................................................................................................3Brief of Fodare Pty Ltd v Shearn.................................................................................................3Facts of the case...............................................................................................................................4The duties which were breached......................................................................................................5Decision given by the court.............................................................................................................6Relevance and impact of this case...................................................................................................8References......................................................................................................................................102Director Duties | Group Assignment

[.FODARE PTY LTD V SHEARN [2011] NSWSC 479]May 13, 2018Introduction The Corporations Act, 2001 (Cth) and the common law, imposes certain duties and obligations on the directors of all the companies in Australia, irrespective of the state or territory, due to the applicable statutory instruments having jurisdiction of the entire nation. This statute and the common law combine together and ensure that the directors work towards the purpose for which they have been given this role. Naturally, as is in the case of any other law, not following the statute and the common law can prove quite costly for the directors. This is because in such casesthe directors are made liable for breaching the duties imposed on them under the common law and the statutory law. Both the statutory law and the common law not only make the directors liable for breach, but also offers protection to them, where they fulfil their obligations and duties properly, and the result of such efforts is not positive, resulting in questions being raised on their conduct. In doing so, the court analysis the case study in detail and apply the law which gives thebest decision in terms of being just, fair and reasonable. So, the laws are not just about punishingbut also safeguarding the risk taking directors (Langford, 2014). Brief of Fodare Pty Ltd v ShearnOne of the recent cases where the question was raised on the breach of director duties was the case of Fodare Pty Ltd v Shearn [2011] NSWSC 479. This case had a single director who was found to have been in breach of director duties, which resulted in the director having to face penalties for this contravention (Moores, 2014). 3Director Duties | Group Assignment

[.FODARE PTY LTD V SHEARN [2011] NSWSC 479]May 13, 2018Facts of the caseShearn was the director of the company called Fodare Pty Ltd. This case had legal claims being raised in the court where the liquidator of the company asked the company to sue Shearn. The name of this liquidator was Clout. Fodare had been the trustee in Alexandria Trust, which could be categorized as a settlement trust. The formation of this trust came through a deed document. Alexandria was more of a family trust and this trust did benefit the family of Shearn. Fodare attained certain property in its capacity of being trustee of Alexandria. Later on, this property was sold by Shearn to independent purchaser. This is the sale which formed the essence of this court claim. This case was made in the Supreme Court of New South Wales (Case Law, 2011). In this matter, the only director of Fodare was lady known as Shearn and she held this post during the aforementioned sale. She had diverted funds and had also cleared registered mortgages to value of nearly four hundred thousand Australian dollars in the private account heldby her. She also diverted approximately two and a half hundred thousand Australian dollars for payment and discharge of mortgage of property which was in possession of her chid. After certain time period, Fodare had to be wrapped up. While going through the liquidation process, the liquidators came across this transaction. This led to a case being started against Shearn wherethe allegations of breach of director duties were made. Even the child of Shearn faced claims being made against her owing to constructive trustee’s scope. The child was made liable owing to their knowledge about the funds coming out of the sale in questions, instead of these funds coming out of certain other transactions (Insol, 2012). 4Director Duties | Group Assignment

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