Valarie is a managing director of NorthStar Pty Ltd ("NS Pty Ltd"). She owns a number of shares in various other small companies that have a policy to give bonuses to shareholders who employ their services. Valarie always ensures that NS Pty Ltd enters into contracts with the companies that she is a shareholder.

1. To whom do directors owe a duty? (5 marks).

1. Is there a difference between the common law and the statutory duty of care? (5 marks).

1. What duties (both statutory and general law) have been breached by Valarie and who can take

action against Valarie for the alleged breach of duties? Refer to the statute and decided cases to support your answer.