Scenario:

XYZ Pty Ltd is 50% owned by BIG LTD. In 2009, BIG Ltd was approached by BLACK Ltd, the other shareholder in XYZ, to make a further major investment in XYZ, to enable it to develop a new and highly prospective technology based on Bitcoin mining.

The then directors of BIG Ltd delegated to others, including a computer expert, the task of obtaining the technical information about the prospects of the technology. The report prepared for the directors indicate that the proposed investment should be very successful.

Queried by his fellow directors about the optimistic forecasts, Mr Jobbs (who has an information technology qualification) assures them that all appears to be in order. However, some of the information has been negligently prepared. This means that, when the directors rely on the report and invest BIG Ltd's funds in the technology, the investment will not be as successful as the report indicates.

Required:

Explain the duties owed by Directors and Officers of the Company and discuss whether the directors of BIG Ltd (or any of them) breached their duty of care?

Higher marks will be awarded to candidates which include statutory provisions and case law examples to support their answer.