Law Of Trump Developments Ltd Samples †MyAssignmenthelp.com

Question: Discuss about the Law Of Trump Developments Ltd. Answer: Issue Do the directors of the company, Trump Developments Ltd, have any defences against an action by the Australian Securities and Investment (ASIC) or the Australian securities Exchange (ASX)? Rule The facts of the case make it clear that the directors of the company, Trump Developments Ltd, have breached the provisions of the Corporations Act, 2001. Section 180 of the Corporations Act, 2001 stipulates that a director or other officer of a company must act and use his powers in respect of his position with reasonable diligence and care.[1] The directors of the company failed to do so and ran into massive overruns and exhausted all of the companys resources. They also failed to ensure that the developmental works in USA and the Carribean were conducted under a safe environment. Their failure led to the casualty of 3 workmen. Section 181 of the Corporations Act, 2001 lays down that a director of a company should discharge their duties and use their powers in respect of the company for a purpose laid down by the constitution of the company and in good faith keeping the best interests of the company.[2] The facts of the present case make it clear that the directors of Trump Developments Ltd contravened the provisions of this section by investing in development of Casinos in a substantial manner when the companys constitution clearly stated that their primary function would be development of residential apartments. In addition to this, they also amassed foreign investment for their developmental projects, which is in contravention of the constitution of the company. Section 182 of the Corporations Act, 2001 establishes that a director of a company should not use his position to the disadvantage of the company.[3] Big Donald used his position as the Chief Executive Director of the company to invest in Casino Development even though Hillary opposed the idea. Bernie and Little Marco decided to side with Big Donald to prevent another unpleasant confrontation. These events establish that Big Donald used his position to the loss of the company. Section 184 of the Corporations Act, 2001 stipulates that an officer or director of a companys acts shall be treated as an offence if those actions are within the scope of his powers and position in relation to the company and those acts are: Reckless; or Not honest by intention; or Not in good faith and in the corporations best interests; For a purpose that is proper[4] The facts of the case establish that the directors of Trump Developments are in contravention of the above-mentioned provisions. Application In the landmark case of ASIC vs Rich, 2009, the ASIC brought charges of breaching his duty of care that led to the collapse of the One Tel. telecommunications company. The proceedings of this case ran for almost nine years and it was held that the ASIC had failed to prove any of its charges against Mr. Rich and thereby dismissed the case.[5] The only defence that the companys directors have is to plead that their conducts were intended towards the best interests of the corporation (in respect of the companys bankruptcy) as the constitution of the company did not expressly prevent them to enter into developmental works other than residential apartments. In respect of the workmen casualties, the directors may plead that they exercised duty of care to the best of their abilities. Conclusion The only defence left to the directors of Trump Development Ltd., is to plead that their actions were intended keeping the best interests of the company in mind. References ASIC v Rich 635 [7288] Austlii (2017). Retrieved 1 September 2017, from https://www.austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/consol_act/ca2001172/s180.html Austlii (2017). Retrieved 1 September 2017, from https://www.austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/consol_act/ca2001172/s181.html Austlii (2017). Retrieved 1 September 2017, from https://www.austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/consol_act/ca2001172/s182.html Austlii (2017). Retrieved 1 September 2017, from https://www.austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/consol_act/ca2001172/s184.html