LAWS4112 Study Guide - Final Guide: Telnet, Fiduciary, Westpac
Document Summary
The dire(cid:272)tors of a (cid:272)o(cid:373)pa(cid:374)y (cid:373)ust a(cid:272)t (cid:858)(cid:271)o(cid:374)a fide i(cid:374) (cid:449)hat they (cid:272)o(cid:374)sider not what a court may consider is i(cid:374) the i(cid:374)teress of the (cid:272)o(cid:373)pa(cid:374)y, a(cid:374)d (cid:374)ot for a (cid:272)ollateral purpose. (cid:859) (re. S181 a director or other officer of a corporation must exercise their powers and discharge their duties: (a) in good faith in the best interests of the corporation; and (b) for a proper purpose. The two tests are considered separate (hogg v cramphorn), however courts have not always made a clear distinction between the two (ngurli v mccann) Duty to act in good faith subjective test. Director must honestly believe it was in the best interests of the company (bell group v westpac banking) However, objective element where the decision was so unreasonable that no reasonable person would have made it (hutton v west cork railway) The interests of the company as an entity can be equated with the collective interests of members:
