Part A:
1. Jenny, Carla and David were the members of the Board of Glamour Ltd. The Chief Executive Officer of the company, Brian, is known as a "bit of a ladies' man. Despite receiving 8 complaints from company staff alleging Brian has made improper advances towards them, nothing is done by the Board to address Brian's behavior. The complainants are told to 'just tell Brian to go away. He means no harm'. The Board throws a number of parties in which a great deal of alcohol is consumed and Jenny, Carla and David witness conduct by Brian that could be characterized as sexual harassment. Reportedly, the 3 directors just laugh on each occasion and remark it was just a case of 'Brian being Brian'. However, a woman present at the most recent party has brought an action for assault against Brian and the company. Can the company be liable for Brian's conduct?
2. Would the case law on piercing the corporate veil have helped the victims of asbestos related diseases recover from James Hardie Ltd (NL)? In your response indicate what cases would provide useful precedents. Also consider what law reform might resolve such situations.
3. A football club incorporated as a company has been fined, had premierships cancelled, premiership payments deducted and has been excluded from premiership points for the rest of the season. Assume this was an unfair punishment for the wrong the club committed and that the company has a good case against the company that runs the Premiership. Four of the ten directors of the football club decide to sue. The other six directors do not want the club to sue. What legal action can the four directors take and what would they have to demonstrate in order to take legal action?
Part B:
1. Millie bought two shares in Ruff Pty Ltd for $100,000. Millie, now a non-executive director of Ruff Pty Ltd, is unhappy with the state of affairs of the company. The following events have occurred:
- Ruff Pty Ltd's revenue has increased 200%
- Millie has received no dividends to date and James and John, the two executive directors of Ruff Pty Ltd, have decided to pay no dividends this year
- James and John have voted themselves a large pay rise and bonus
- James and John have arranged for Ruff Pty Ltd to lease two expensive cars for their exclusive use.
Millie attends her first directors' meeting and questions the dividend policy and asks that her objection to the lease of the cars be recorded.
James and John decide to remove Millie from the board. They hold a members' meeting and remove Millie from the board. They then send Millie a letter offering to buy her shares for $ 100,000. Millie is happy to sell her shares but thinks that the price offered is too low. Advise Millie.
2. Marcus was a director of a small proprietary company. The company had given Marcus several low interest loans to buy a house and land for private purposes. In late 2004, the company began experiencing financial difficulties but continued to trade. At a meeting in December 2004, Marcus and a newly-appointed director, Barton, resolved to release Marcus from all his debts to the company. Subsequently, a deed of release was properly executed by the company. Barton had been appointed in haste, was unfamiliar with the company's affairs and was prepared to follow Marcus' advice as to his duties.
In March 2005 the company went into liquidation and a liquidator was appointed. The liquidator discovered that two years before, Marcus had given a personal guarantee to the ANZ Bank for a loan of $50,000 to the company. In both January and February 2005, a sum of $25,000 had been paid to the ANZ Bank in satisfaction of the loan. The liquidator also discovered that the company had probably been insolvent for at least six months.
In view of these facts discuss the actions that could be brought by the liquidator.