A director of a company in Australia is bound by duties prescribed for directors under both the common law and the Corporations Act. s185 of the Corporations Act preserves the applicability of the common law duties, reinforcing that it does not lessen, impair or detract from the structure of the law that has been established through precedent in the area of directors’ duties. The statutory duties contained in ss180-183 are additional to and stand free of any equitable or common law duties that apply to a director. In other words they exist side by side. The common law rules themselves as well as their underlying rationale are therefore to be used to interpret the statutory provisions. The remedies that will be available for a breach of such duties will depend on whether it is a common law or statutory duty that is allegedly breached, and where they overlap either may be pleaded alternatively as the elements required to prove the respective statutory and common law duties may differ.
Alan is a managing director of XZ company only selling man products. His friends Bill, interested to launch a new products for woman only and ask Alan would his company XZ interested of market this product. Alan tells Bill his company not interested this product because his company only sells man products.
However, Alan interested that and he and Bill set up a new company QW and become its members and directors. This business success and Alan is a majority member in company.
After six months, at company XZ board meeting Alan proposes company XZ should enter into a contract with company QW to buy QW products for resale. Company XZ makes a huge profits of selling QW products.
Now XZ discover Alan is a majority member in QW.
1. Under general law what remedies XZ can seek against Alan?
2. Under statutory law what penalties can be imposed against Alan? Who can impose them?
Q1. Comapny can seek an account of profit and rescission of contract right? But I'm not understand what means of "constructive trust arrangement" under general law.