LAW202-Company Law
Assignment
Issue:
Adoni, one of the directors of Desert international Gold NL (DIG), met Max, the managing director of western Mining NL (WM), at a mining industry conference in Perth in June 2018. In their casual conversation during a morning tea break, Max mentioned to Adoni that his company was selling a gold mining lease in Western Australia, and was looking for a mining company to buy it.
On his return to Sydney, Adoni immediately informed the board of directors about the opportunity, and also advised that the board should approve his proposal to buy the lease from WM as soon as possible. The board of DIG, however, was not enthusiastic about Adoni’s proposal but promised to re- examine it in a near future meeting.
In September 2018,Max informed Adoni that his company had received an offer from a third party, and that the matter would be finalize with in three months unless there was another offer soon. Adoni, phoned Linda, one of his co-directors of Dig, and gave her this information. Linda told Adoni that she was not interested in the matter.
Adoni Lost his patience with his co- directors and went on to purchase the lease from WM in his own name. Three months later Adoni resigned from the DIG board of and sold the lease to his company, Adoni Mining Pty Ltd (AM), at a substantial profit. On learning about his action, the DIG board of Directors maintained that Adoni had breached his duties owed to DIG. Adoni rejected this contention.
Answered both (a) and (b):
(a)Has Adoni breached his duties owed to DIG under the general law ( common law) under corporation Act 2001 (Cth)?
(b)What remedy, if any may DIG takes against Adoni and his company AM?
