COMPANY LAW

Mr Andrew is a director of Anzac Pty Ltd.He does not take an active part in the company but does receive a small amount of income from the company.

Unfortunately, one of the company's main clients has gone into liquidation, owing Anzac Pty Ltd $500,000.Because of this Anzac Pty Ltd can no longer pay its debts and fulfil its obligations.

Mr David, a secured creditor of the Anzac Pty Ltd has not been paid $8,500 for the last two months and he wishes to bring an action against the company for insolvent trading and against Mr Andrew (Director) for breach of Director's Duties under the Corporations Act 2001 (Cth).

a) Explain whether Mr David can take legal action against the directors of Anzac Pty Ltd for breach of s588G and if he can send a letter of demand to Anzac Pty Ltd. What are the consequences for the Anzac Pty Ltd directors of the company going into administration? (5 Marks)

b) Has Mr Andrew, as a director of Anzac Pty Ltd, breached any of the director duties? (5 Marks)

c) What is a deed of company arrangement? How might a deed of company arrangement save Anzac Pty Ltd from liquidation? (5 Marks)

Please make sure you use statutory provisions and relevant cases to support your arguments