| February 8, 2016

Country Living Ltd is a company registered in Australia
manufacturing and selling camping equipment and accessories. It
proposes to expand its business to include either the manufacture
of outdoor home furniture such as gas heating units for outdoor use,
BBQ cook tops, outdoor lamps and other outdoor electrical items
or the manufacture of indoor replica antique clocks.
Before making any decision about the expansion, Country Living
Ltd conducts a survey into the feasibility and marketability of the
two projects above. The board of directors subsequently meets and
decides on the matter. Judy is not interested in the topics being
discussed. She lives in apartments all her life and has no
appreciation for any of the outdoor or camping equipment. She
also has no interest in decorating homes with antique furniture. As
a result of her disinterest and during the board meeting, she plays
with her latest phone and her tablet. It is only towards the end of
the meeting that she provides a passionate speech on why the
board should vote on the indoor replica antique clock project. The
board unreservedly agrees with her as she has been “right most of
the time”. Hence, the board resolves to take on the indoor replica
antique clock project and expand its business, and rejects the
outdoor home furniture project.
Before the board meeting, the survey results have been collated
and the results indicate that there is not a lot of demand for indoor
replica antique clocks.
Two months after the board meeting, Judy resigns from the board
of Country Living Ltd and goes to work for Classic Trend Pty Ltd,
a company that manufactures modern indoor furniture and her
brother Andrew is the managing director. Judy discusses the
survey outcomes with Andrew. As a result of that discussion,
Classic Trend Pty Ltd decides to expand its business to include the
manufacture of outdoor home furniture, including gas heating units,
BBQ cook tops and fancy outdoor lamps. The expansion at Classic
Trend Pty Ltd proves to be successful.
Thornton is the managing director of Country Living Ltd. He
comes to you for advice on the following matter:
What duties have been breached by Judy under the
Corporations Act 2001 (C’th) and under the general law? Your
answer should include relevant sections of the Corporations Act
2001 (C’th) and should include relevant court cases.
Presentation (general):
1. Please include word count and insert the page numbers on
your assignment.
2. Organize your assignment using headings and sub-headings.
3. Use footnotes to refer to your sources of information.
4. Provide a brief bibliography on a separate page at the
end of your assignment.

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