Style Ltd is in the business of recreation. The directors of Style Ltd are Barry, David, and Kate. There are 100 shares, with Barry, David, and Kate having 20 shares each and the remaining shares being held by 40 shareholders, who each have 1 share each. The remaining 40 shareholders are passive investors and sometimes attend the AGM, but beyond that are happy to just receive dividends. Hayden (who is not a director of Style Ltd) is the son of David. Barry and Kate know Hayden and his relationship with David. The directors of Style Ltd have competing visions for the business. Kate is keen to focus on older persons and develop quiet lifestyle supports. Barry and David like Wiz Bang supports that are all about noise. The directors of Style Ltd meet on the Tuesday of each week. On 1 September 2020 Style Ltd purchased a property at 4 Silent Street to develop into a high energy and loud centre. The high energy and loud centre at 4 Silent Street is intended to be noisy, energetic and will have people doing high energy and loud activities into the night. Silent Street is a quiet residential street with most streets in the area ending in dead end streets with no through roads. It is tree lined and very quiet. Until business approval is achieved from the local government Style Ltd kept using the property at 4 Silent Street as a rental with older people living in it. On 4 September 2020 Style Ltd made an application with the local government to convert from a residential dwelling to a business. When approached by the local government for their views, the neighbours in Silent Street and surrounding streets complained strongly and the local government did not give permission to Style Ltd to convert 4 Silent Street to a business. Style Ltd has kept its elderly tenants in the property on a residential lease. On 1 December a board meeting of Style Ltd was held where Barry and David wanted to take the local government to court and Kate wanted to use 4 Silent Street as a retreat for old people that fits in her vision of the company. While this would require some approvals, the impact on the local community would be far different. No decision was made in the 1 December 2020 meeting. In the meeting on Hanukkah, 15 December 2020, another directors' meeting was held. Barry and David wanted Style Ltd to sell 4 Silent Street at a good price so they could develop their high energy and loud centre someplace else. Kate was not happy but agreed. So the directors all agreed to explore possibilities and revisit this in the New Year. David's adult son, Hayden, has two neighbouring houses on a main road, 68 and 70 Noisy Busy Lane, where a lot of businesses have been approved and developed around them. Hayden purchased the houses in 2018. Instead of using 68 and 70 Noisy Busy Lane for business, Hayden ended up living in 68 Noisy Busy Lane and using 70 Noisy Busy Lane as a residential rental. 68 and 70 Noisy Busy Lane were on a quiet end of a local business district but now the area is getting busier, and considering they are living in the property and not using it for business, Hayden is looking to move. On 20 December 2020 David visits his son. On 20 December David suggests to Hayden that he could consider a property swap with Style Ltd for 4 Silent Street. David said he had not mentioned this concept to anyone and was just brainstorming. Hayden likes the idea and after David leaves on the 20th Hayden sends an e-mail to Barry making the offer. He suggests swapping 68 Noisy Busy Lane, which has approvals for activities like high energy and loud already, for 4 Silent Street. Hayden does not mention the idea came from David. David leaves Hayden's and goes to his doctor for his check-up. The doctor found a problem and David is sent to hospital and then home for a few days rest from 20 December and home on Christmas Eve, 24 December 2020. Barry and Kate have visited Hayden's house and know the property at 68 Noisy Busy Lane. At the directors meeting on 21 December 2020 Barry shares Hayden's offer with Kate who agrees to go ahead. Details are sent to David's e-mail, but there is an out of office reply and David never opens the e-mail. Barry goes to Style Ltd's lawyers on the 21st and gets a contract drawn up subject to valuations, agreeing on adjustments for that, finance and building and pest. At the directors' meeting on 28 December 2020 David hears of the property swap but Hayden's name is not mentioned and he does not open his e-mail or read the board papers to understand what is happening. David then tells Barry and Kate that he wants to sell his shares and move out of the business at the next AGM. Barry is not interested in buying David's shares, but Kate is. The offer is sent by Kate, on behalf of the board, to all 40 shareholders in case they have an interest. David takes a few weeks off on holiday. David is on holidays and misses the 5 January 2021 meeting where Hayden's signed contract is tabled. David also is on holidays and misses the 12 January 2021 meeting where the valuation were agreed upon and all the building and pest reports and finances came back fine. Barry and Kate approved the swap and the contract became final on 13 January 2021 with 68 Noisy Busy Lane being exchanged for 4 Silent Street with a $45,000 cheque being provided by Style Ltd to Hayden to adjust for the slight difference in values of the properties. On 14 January 2021 the properties were exchanged at the land Titles office and the deal was finalised. On 15 January 2021 David returns from his holiday to the Red Centre, including Uluru, Alice Springs and Kings Canyon. On 16 January 2021 Hayden visits his dad and gives him a cheque for $5,000 for "commission and thanks" for helping with the deal to exchange properties. David was surprised as he was unaware of the fact it was Hayden's property at 68 Noisy Busy Lane involved in the exchange. David decides not to raise the payment from Hayden with the board of Style Ltd. On 2 February 2021 the Style Ltd AGM is held. David offers his shares for purchase and Kate is the only shareholder interested. She has the shares transferred to her at the meeting and David gets a cheque from Kate. David resigns from the board and puts his feet up on the desk and cracks a beer with a grin Kate now has 40% of the shares and takes control and appoints 3 other directors with expertise in older persons and develop quiet lifestyle supports. Kate announces Style Ltd is going to move out of high energy and louds and focus exclusively on older persons and develop quiet lifestyle supports. David tells Hayden at dinner on 3 February 2021 of the AGM and developments that occurred. David and Hayden see an opportunity as the high energy and loud operation at 68 Noisy lane will be stopping in a few months. David and Hayden start turning 70 Noisy Busy Lane into a high energy and loud operation. The tenant in 70 Noisy Busy Lane is on a short term lease and was happy to move out immediately when Hayden offered them a cash incentive. David was the high energy and loud executive in the company at Style Ltd so has contacts and expertise to draw upon. David and Hayden start getting 70 Noisy Busy Lane ready for super high energy and loud activities. Style Ltd announces on 1 March 2021 that they are moving out of high energy and loud and into older persons and quiet lifestyle activities. David and Hayden are ready for the Style Ltd announcement, and also on 1 March 2021 they announce they are starting a super high energy and loud operation at 70 Noisy Busy Lane. They call it Super High energy and loud World (SWBW). They have posters, balloons, signs and everything ready to put around the house and within an hour or two the outside of the house is transformed into a super high energy and loud action site with branding and music. As Style Ltd's customers arrive at 68 Noisy Busy Lane surprised and unhappy that they might not be able to engage in high energy and loud activities anymore, David and Hayden are next door at 70 Noisy Busy Lane offering super high energy and loud services and at a discount. David and Hayden's operation at 70 Noisy Busy Lane has a hugely successful start. On 5 March Kate looks in at 70 Noisy Busy Lane and sees many of Style Ltd's customers. On 8 March Kate comes to you wanting advice on whether David has breached any conflict of interest duties under the Corporations Act.