Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Charli, Otis and Hank were directors of Burns Pty Ltd. The company ran a business selling sushi at a local shopping mall. Otis was a

Charli, Otis and Hank were directors of Burns Pty Ltd. The company ran a business selling sushi at a local shopping mall. Otis was a non-executive director and left the running of the business to Hank, the managing director. Charli was the chief financial officer. Hank and Otis did not have any knowledge of accounting and finance. They both relied on Charli to manage the company's finances. In June last year, twenty customers became ill after eating sushi that had maggots and had not been properly refrigerated. The customers sued Burns Pty Ltd for compensation for loss suffered as a result of the illness. The health authorities investigated the company's food handling practices and found multiple breaches of food safety regulations. The authorities concluded that Hank, who was managing the business, had not established a proper food handling system for the business. Charli, the chief financial officer, had been stealing money from the company to buy luxury goods for herself. Hank and Otis did not notice that Charli had been stealing money. Hank and Otis did not read the financial statements Charli prepared as their knowledge of accounting was so poor that they could not understand financial statements. Without Hank and Otis' knowledge, Charli took the company's list of suppliers and gave it to her sister. Charli and her sister set up a sushi stall called 'Sakana' around the corner. Charli also gave her sister the recipes to Burns Pty Ltd's bestselling sushi. Sakana, the sushi stall run by Charli and her sister, was very popular. Many of Burns Pty Ltd's former customers went to buy sushi from Sakana. Discuss the relevant duties owed by each of the directors in the circumstances and explain the applicable law. Discuss whether the directors have breached their duties.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Criminal Law Cases And Materials

Authors: Joshua Dressler, Stephen Garvey

9th Edition

1647087708, 978-1647087708

More Books

Students also viewed these Law questions

Question

What is the difference between needs and wants? (p. 263)

Answered: 1 week ago