BLAW 101 Lecture Notes - Lecture 27: Fiduciary, Trading While Insolvent, Civil Penalty
Document Summary
S181-183: act in good faith and avoid conflicts of interest. Good faith: act honestly in the interests of the corporation as a whole. Proper purpose: for the benefit of the corporation as a whole and not for any extraneous purpose. Common law & s 181-183 duties of good faith and acting for proper purpose. Case: asic v adler: good for him, but not for company = improper. Purpose in spending m, to prop up hih share price so a would not lose money: adler is non-executive director of hih, whose subsidiary loaned money to pee (which was half owned by adler! ), which adler used to boost stock of hih: bad business decision (180) and for improper purpose (his own benefit) (181, and misuse of position (182, and looks intentional (184) (more on this in a moment. Rights and duties: not to misuse position- common law and s182.
