Question B1:

Your boss hands you a file of a new client he would like you to advise. On reading you have discovered the following.

Your client, Dell McManus- Managing director of Time Please Pty Ltd (TP), a small family owned jewellery shop, is concerned at a few recent activities within the business and needs to some advice.

Firstly, Sally Jones, Dell's sister, the director and head of sales, has missed three of the last four business meetings as she has been renovating her two rental properties and looking after her sick mother. She has recently told Dell, that she now wants to take an extended holiday as she needs a break from her stressful life. She has ignored Dell's request to elect a defacto director as she thinks he can handle things by himself. Recently though Dell has two urgent matters which need to be resolved.

2. Daniel Benoj and his wife Leija, Dell and Sally's cousins, are also directors. Daniel works in design and his wife is the company's financial officer. Both have been preoccupied with setting up another family owned company which has no connection with this company. Daniel has missed meetings and his attention to the day to day running of the company is slipping. Leija has failed to pay some of the company's largest creditors, and one has issued a notice of demand.

Required:

Advise Dell as to the liability of ALL the directors regarding their director's duties, and what if any of their duties they have breached. Please use legislation and common law to justify your answers.(15 marks)