Section 181 Good Faith Under s181 CA Good Faith concluded that a director or

Section 181 good faith under s181 ca good faith

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Section 181 “Good Faith” Under s.181 CA – “Good Faith” concluded that a director or other officer of a corporation must exercise their powers and discharge their duties in good faith in the best interest of the corporation; and for a proper purpose. Juliette was playing with her phone during the entire meeting. It is only towards the end of the meeting, she convinced the board with her passionate speech as to why they should accept the rugs and carpets project rather than the timber flooring project. Facts indicated that, Juliette failed to use her powers and discharge duties in good faith and for a proper purpose as a director, she should concentrate and pay attention to the board meeting instead of playing with her phone. On the other hand, she could argue that her choice of choosing rugs and carpets business over timber flooring project was made in the best interest of corporation. Section 182 “Use of Position” & Section 183 “Use of Information” Under section 182 CA – “Use of Position” stated that a director, secretary, other officer and employees of a corporation must not improperly use their position gain an advantage for themselves or someone else; or cause detriment to corporation. The law under s. 183 CA – “Use of Information” mentioned that a person who obtains information because they are, or have been, a director, secretary, other officers and employees of a corporation must not improperly use the information to gain an advantage for themselves or someone else; or cause detriment to corporation. There is a relevant case Canadian Aero Service Ltd v O’Malley where the case law stated that director resigns from a company to take up a corporate opportunity, the courts have held that the director will breach his or her duty by taking up the opportunity without the approval of the company where the resignation was prompted or influenced by a desire to acquire the opportunity sought by the company, or it was the director’s position with the company rather than a new initiative that led the director to the opportunity which director acquired. In ASIC v Vizard cas e , the court held that use confidential information by reason of his position as director to gain self-advantages and also caused detriment to the corporation, which is also similar to Juliette case. Despite the facts that Vizard breached the duties intentionally dishonest. According to the facts, Juliette might not have intentional to use the position improperly but her decision has a strong influence in the meeting that cause detriment to corporation. Furthermore, Juliette resigns from the board of Sumo Ltd and went to work for Modern Living Pty Ltd, a company that designs modern furniture and her brother Richard is the managing director. After discussion with Richard about the survey results obtained from the previous company, Modern Living Pty Ltd expanded its business to include the manufacture of country-style timber floorings. The expansion proves to be successful and profitable. Consequently, Juliette has been breached her duty of director under both ss.182 CA and 183 CA. She also has been breached of general law
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