Director Duties - problem question
You have been consulted by Huan, the Chairperson of the board of directors of
Oldstuff plc, a company dealing in antiques. She tells you about three sets of
events which recently occurred at Oldstuff.
a) In June 2018, Kong, who was then a director of Oldstuff, secretly decided to
set up a new business in competition with Oldstuff.
In July, he bought premises from which to conduct his new business. In
September 2018, he resigned as a director of Oldstuff.
In October 2018, he negotiated a large and very profitable contract with Janet
for his new business.
Janet had been a client of Oldstuff, and in October 2018 Oldstuff was still
actively trying to get further contracts from Janet.
However, Janet had already decided not to award any new contracts to Oldstuff
because she was unhappy with the service Oldstuff had given her in the past.
b) Vanya has never been appointed a director of Oldstuff, but has regularly
attended its board meetings.
In December 2018, she negotiated for Oldstuff to purchase a Greek statue for £1
million.
It is now clear the statue was only worth £600,000. Vanya is a world-famous
expert on Greek statues.
c) In April 2019, Oldstuff agreed to purchase a set of paintings from George, a
director of Oldstuff, for £300,000. Because of a downturn in Oldstuff’s business,
it no longer wants these paintings.
, Advise Huan whether Oldstuff could take any action in respect of these events.
Introduction
- This is a question on Directors Duties and the key principles are from S170
– S 178 CA 2006
- The company will bring an action towards all the above named persons.
First Issue
A) In June 2018, Kong, who was then a director of Oldstuff, secretly
decided to set up a new business in competition with Oldstuff.
In July, he bought premises from which to conduct his new business. In
September 2018, he resigned as a director of Oldstuff.
In October 2018, he negotiated a large and very profitable contract with
Janet for his new business.
Janet had been a client of Oldstuff, and in October 2018 Oldstuff was still
actively trying to get further contracts from Janet. However, Janet had
already decided not to award any new contracts to Oldstuff because she
was unhappy with the service Oldstuff had given her in the past.
- Kong is the Director of Oldstuff, he had decided to secretly set up a new
business in competition with Oldstuff. In July 2018 he had bought premises
to set up his own business and in September 2018 he resigned as a Director
of Oldstuff.
You have been consulted by Huan, the Chairperson of the board of directors of
Oldstuff plc, a company dealing in antiques. She tells you about three sets of
events which recently occurred at Oldstuff.
a) In June 2018, Kong, who was then a director of Oldstuff, secretly decided to
set up a new business in competition with Oldstuff.
In July, he bought premises from which to conduct his new business. In
September 2018, he resigned as a director of Oldstuff.
In October 2018, he negotiated a large and very profitable contract with Janet
for his new business.
Janet had been a client of Oldstuff, and in October 2018 Oldstuff was still
actively trying to get further contracts from Janet.
However, Janet had already decided not to award any new contracts to Oldstuff
because she was unhappy with the service Oldstuff had given her in the past.
b) Vanya has never been appointed a director of Oldstuff, but has regularly
attended its board meetings.
In December 2018, she negotiated for Oldstuff to purchase a Greek statue for £1
million.
It is now clear the statue was only worth £600,000. Vanya is a world-famous
expert on Greek statues.
c) In April 2019, Oldstuff agreed to purchase a set of paintings from George, a
director of Oldstuff, for £300,000. Because of a downturn in Oldstuff’s business,
it no longer wants these paintings.
, Advise Huan whether Oldstuff could take any action in respect of these events.
Introduction
- This is a question on Directors Duties and the key principles are from S170
– S 178 CA 2006
- The company will bring an action towards all the above named persons.
First Issue
A) In June 2018, Kong, who was then a director of Oldstuff, secretly
decided to set up a new business in competition with Oldstuff.
In July, he bought premises from which to conduct his new business. In
September 2018, he resigned as a director of Oldstuff.
In October 2018, he negotiated a large and very profitable contract with
Janet for his new business.
Janet had been a client of Oldstuff, and in October 2018 Oldstuff was still
actively trying to get further contracts from Janet. However, Janet had
already decided not to award any new contracts to Oldstuff because she
was unhappy with the service Oldstuff had given her in the past.
- Kong is the Director of Oldstuff, he had decided to secretly set up a new
business in competition with Oldstuff. In July 2018 he had bought premises
to set up his own business and in September 2018 he resigned as a Director
of Oldstuff.
