Q4: ( see Q3 from previous tutorial session)

Youareanaccountant/financial adviser workingforfinancial restructuring firm. One ofyourclientsisEmpire HotelsPtyLtd(Empire),whichownsseveralluxuryhotelsservicingMelbourne'selite.Empirewasincorporatedin2012 and has its own writtenconstitution.

The directors and shareholders of Empire are Catherine, Nancy, Brian, and Sarah.Catherine and Brian are joint executive directors, running the day-to-day business of thecompany. Sarah is the Chairperson and is a high-profile property lawyer. Nancytakesnoactiveroleinthebusiness,andrarelyattendsdirectors'meetingsbecause she ffiiinds them boring,sheonlywantedtobeappointedadirectorsothat shewouldgetVIPaccessto Empire'sexclusive events.

In 2021anumberofeventsoccurred:

• AtaboardmeetinginJanuary2021,Sarahwasgiventhetaskofinvestigatingthepurchase of aproperty for anewhotel site.
• InApril2021,Sarah negotiatedforEmpiretopurchasepropertyfromBrooklynHoldings Pty Ltd (Brooklyn) for $2.7 million. The other directors are not awarethat Sarah's father-in-law, Rupert, owns 80% of the shares in Brooklyn. Under Rupert's will, on his death his shares in Brooklynn will pass to Sarah. He is 95 and in poor health.
• At the Board meeting to discuss the transaction (see week 5 tutorial question), Sarah did not disclose that she would benefit from the transaction when father in law passes away. She says this is a personal matter and not relevant to the other directors.
• The contract is signed by Sarah and Brian.

REQUIRED:

1. Has Sarah breached her obligations to the company?
2. If so does she have any defence?