Corporation Act: Director's Duties and Breaches Analysis

This assignment provides a comprehensive analysis of the Corporation Act 2001, focusing on the duties and potential breaches of directors, using the fictional case of Tony Stark. The analysis covers various aspects, including conflicts of interest, misuse of company information, and financial misconduct. It examines Stark's actions in relation to his roles in Marvel Universe Pty Ltd, Endgame Pty Ltd, and Ironman Pty Limited, assessing whether he violated sections 181, 183, 184, and 286 of the Act. The assignment references relevant case law, such as Peso Silver Mines Ltd vs. Copper and Faccend chicken Ltd vs. Fowler, to support its arguments. The analysis also explores the consequences of Stark's actions, considering potential liabilities and penalties. Furthermore, the assignment considers how the outcome might change if Stark had resigned before the events occurred. The document concludes with a discussion of the importance of legal provisions in protecting stakeholders and ensuring corporate governance, highlighting the role of ASIC in enforcing the law in Australia.

RUNNING HEAD: CORPORATION ACT
Corporation Act
Name of the student
Name of the university
Author Name

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Reply to question (a):
Tony Stark was the director of the organisation Marvel Universe Pty Ltd and has breached
several duties which are stated as follows:
An opportunity was taken as it was introduced by Dr Thanos, the main query arises here is
whether this belongs to the breaching of noble faith or he should have disclosed?
As he was the director of the new organisation Endgame Pty Ltd, the query arises here is whether
it should be disclosed or not?
Another concern regarding the provided case is whether the organisation’s information was used
improperly as he contacted with several clients of the organisation Marvel Universe Pty Ltd to
provide the benefit to his new organisation of Endgame Pty Ltd.
According to the general law regarding the conflict of interest, the fiduciary Directors should not
place themselves in the situation of conflict where there is a conflict in their interest along with
the responsibility to act for the organisation’s interest. According to the Corporation Act, 2001 s
181 and s 183 shows about maintaining noble faith and using the proper information of the
organisation.
Apart from this section 191 (2) (a) of the CA 2001 explain the different exceptions that using of
the unfair way or method where the organisation of the company can reject it in the first instance
where it creates a chance for not disclosing it in relation to the interest as it is stated in the case
of Peso Silver mines Ltd vs copper. According to the general rule of the conflict of interest, it has
been stated that a person can act as a director of two organisations that are competing until the
individual does not perform breaching of any duty to any one of the organisation. This statement
can be supported by the case study of London and Mashonaland Exploration co Ltd vs New

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Mashonaland Exploration co Ltd where it provides the authority for computing with the
organisation without being disclosed about their task or performance.
There should be confidentiality in the field of clients contact, and they should not be disclosed to
any other party as it is well explained in s183 of the CA 2001. This is well explained in the case
study of Faccend chicken Ltd vs Fowler. In the above mentioned case there is a performance of
breaching the noble faith under section 180 of the CA 2001 as the director of the organisation
subsisted the organisation Marvel universe Pty Ltd.
In the said scenario it has been observed that Tony stark as the director went for the opportunity
of the business which was being not accepted by the organisation Marvel universe due to the
insufficient fund of the company as they do not carry any intention for purchasing the software at
that particular situation. This scenario is same according to the case study of Peso Silver mines
vs Copper. It is seen that Tony is very clear in this metal according to the exception stated in
section 191 of the CA 2001 which helped to clear out that Tony e was a great failure in
disclosing the interest of the organisation. It has been assumed that Tony was only the director
and he was not appointed as the executive director (where it has been explained that the
executive directors will not be able to join any other competing organisation) of the organisation
in-game PTV limited which can be seen as a competing organisation of Marvel universe. This
can be related according to the facts of London, and Mashonaland exploration co limited where
the director has not performed any breaching of duty, as he was the director of the competing
company and Tony Stark can continue to perform his task in good faith for each organisation.
As he developed a contact with the clients of the organisation Marvel universe pty limited, Hindi
situation it has been observed that Tony Stark has breached section 184 (1) (2) (3) and he used

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the personal information without the permission of the organisation Marvel Universe pty limited
for gaining advantage for the outsider and also for themselves. This can be strongly related to the
case study of Faccend chicken limited vs Fowler.
It can be easily concluded from the above mentioned facts that Tony Stark has not performed any
breaching in the two mentioned issues as he was found to be very faithful before launching of the
software where he developed contact with the clients of the organisation Marvel Universe Pty
limited, when the situation arises it is found that he breached section 184 of the CA 2001 where
Tony Stark can be held liable for breaching section 184 along with the subsections of the CA
2001. He will not be held liable and any civil provision like section 183 CA 2001 which explains
that Marvel Universe will be able to seek your claim the damages for their loss in income from
the clients which includes Antony man and Peter Parker. Additionally it can be held by the court
that Tony Stark has to pay a penalty of 2000 units or he can be sent to prison for five years, or he
can be imprisoned and also can be penalized consecutively.
Reply to question (b):
The answer should not be different as to give the director Tony Stark would have resigned before
receiving opportunity, but it can be seen that there can be e a difference in the outcome of the
given case. As it is seen that Tony Stark was found to be guilty of using the confidential
information of the organisation, Marvel Universe Pty limited because he created contact with the
clients of the organisation Marvel Universe for the well being of the third party, but it has been
found that Tony Stark has resigned before. According to the subsection of section 184 CA 2001
where it is explained required for presenting the obligations for the organisation. As he resigned,
therefore the criteria of section 184 are not fulfilled, and he will be held liable under the civil

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provisions as he breached section 183 of the CA 2001. In this situation he used the information
of the organisation without any entitlement or any prior permission from the organisation. As a
result Tony Stark will be liable and should be ordered by the court to stop performing as a
director or as administering any organisation for a specified time or should have been penalized
with the amount of dollar 200000 or should be some compensation to the organisation Marvel
Universe for the damage or loss they have suffered due to the breaching by the director Tony
Stark.
Reply to question (C):
As Tony Stark was the only director of the organisation Ironman Pty Limited, utilised his
position for transferring some amount like dollar 50000 and dollar 650000 for his own use and
for utilisation due to the need of his friend and according to section 286 of the CA 2001, every
officer that includes the fiduciaries have a duty or obligation to keep a record of the finance of an
organisation and as there is no symbol of transaction utilisation of transferring the money can be
considered as misusing the cash or laundering of the money. According to section 184 subsection
2 of the CA 2001, it is well explained that utilisation of the position due to any intention for
gaining any advantage for the third party or themselves. According to the provision of the section
Tony Stark as a director will be held liable and can impose a fine of 2000 units of penalty and
can be imprisoned for five long years or can be imposed with both.
Reply to question (D):
As the provision of the law is created for protecting the people from performing any wrong
things. It helps in controlling an individual from doing any wrong which can make a better
situation and environment, and there will be a development of faith among the people and

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accordingly when the situation arises which leads to the directors, and they should be faithful and
reliable and therefore the organisation can be seen as the long-lasting and a better future of the
organisation it has been observed in Australia that if an organisation has no fund for supplying
the legal charges the department of ASIC will look after everything until the guilty are being
penalized. According to the CA 2001 it is explained that the responsibility is given to the chief
for acting accordingly with the corporation charter and for utilising the powers on the provided
foundation.
It has been set out in the general rule of law according to the case study of Balls vs Strutt. The
essential profession on the possible motives of the high quality is the Supreme Court's choice in
Glengarry Overseas Ltd vs JKX and Eclairs group limited where it is stated that the right reason
principal will not worry regarding the intensity overabundance by performing a demonstration
which can be seen as the extent of the past of the instruments where it has arisen which leads to
an issue to off suggestion for development. Different acts has been observed for breaching of the
obligation that consists utilisation of forces where a development of new shares is the only
reason to we can the strength of the democracy of the investors and to hinder the bid of takeover
and shift the resources from one of the employers to next employer in which a person was the
executive without any thought.

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Reference:
Section 181 Corporation Act 2001
Section 182 Corporation Act 2001
Section 183 Corporation Act 2001
Section 184 Corporation Act 2001
General Law
Section 286 Corporation Act 2001

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