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Pure Milk Ltd is a company engaged in the production of dairy products for export purposes. The Managing Director, Jack Slipper, was a former trade

  1. Pure Milk Ltd is a company engaged in the production of dairy products for export purposes. The Managing Director, Jack Slipper, was a former trade union official for the WA diary workers' union. The board of directors of Pure Milk have learnt that Slipper was being investigated for misuse of union funds. Depending on the outcome of the investigations, he could face criminal charges and if found guilty, he could be imprisoned for a term exceeding one year. The other directors have approached Slipper to resign but he has refused on the grounds that he is innocent and has a five-year employment contract with the company. Can the other directors remove Slipper from Office? If they can, will Slipper be able to claim damages from the company?
  2. El Dorado NL is an ASX listed company engaged in the exploration and production of gold and copper. The board of directors invested a significant amount of company funds to develop a new gold mine in Leonora. They based their decision on the results of a feasibility study carried out by a team of experts to whom they delegated the task. The team, headed by an experienced geologist, have carried out similar studies for the directors of El Dorado in the past which proved to be accurate. Unfortunately, on this particular occasion, the feasibility study was negligently carried out and the amount of gold that could be mined proved to be significantly less than estimated. The mine failed after two years and had to be shut down and the company lost a large sum of money. Have the directors of the company breached their statutory duty of care and diligence?

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