1).
Issue:
The main issue of the case is to decide whether Mike would be protected by the clauses in the invoice if John were to take action against Mike’s Auto or not.
Rules:
The subject matter of the case is based on the theory of exclusion clause. According to this theory, the liability of the contracted parties could be limited or restricted to certain extend. However, there are certain exceptions to this rule. It has been pointed out in Curtis v Chemical Cleaning that in case of any facts related to the subject matter of the contract should be mentioned to the contracted parties and in case the party has failed to see the same, the other party should have to mention the facts to him. in this case, certain exclusion clauses had been mentioned at the backside of the bill, which the party could not observed. It has been held by the court that the cleaning authority had misrepresented the effect of the clause and therefore, exclusion clause will not be applied in this case. In another case named Hollier v Rambler Motors, it has been observed that signed documents were provided to the claimant regarding the liability of the garage regarding any damage. However, the garage authority had failed to provide slip for one day and the car of the claimant is damaged. On claiming compensation, the authority mentioned about the exclusion clause. According to the court, the garage authority could not take the plea, as there was lack of regularity on their part and they are required to compensate the claimant. On the other hand, certain rules have been mentioned by the court regarding the applicability of the invoice sheet. In L’Estrange v Graucob, it has been held by the court that where an invoice has been signed by the parties, the terms of the invoice will be applied on the parties and in that situation, it is not necessary that whether the parties had read over the terms mentioned in the invoice. It has been held in Balmain new ferry co ltd v Robertson that no person will able to file a case against other if there was a pre-existing contract.
Application:
In the current case, it has been observed that John had parked his car in Mike’s garage and there was a notice hanged in the wall along with other notice where it has been mentioned that the garage will not be responsible for any damage caused to the car. The provision of exception clause can be applied in this case, as the notice was hanged along with other notices and it is reasonable that John might not observe the same. However, it has been mentioned in the case that John had to sign an invoice every time while parking his car. Therefore, it can be stated that John is bound by the terms mentioned in the invoice. It can further be stated that a contract is already been made between John and Mike and therefore, no further claim regarding the same could take by John.
Conclusion:
Therefore, Mike can take the plea under exclusion clause.
2).
Issue:
The main issue of this case is to determine whether the directors of the company could defend their position under section 180 (2) of the Corporation Act 2001 or not.
Rules:
The subject matter of the case is based on the provision on business judgment rule that has been mentioned under section 180 (2) of the Corporation Act 2001. The Corporation Act 2001 is regulating the acts of the director of a company and there are certain provisions that help the director to keep discipline in their daily activities. According to section 180(1) of the Act, every director of the company is required to take maximum care and diligence while performing their job. Further, they should have to take all the decisions prudently, as the directors are treated as the mind of the company. Every director is required to act for securing the interest of the company and the shareholders and the scope of their acts are quite wide and vast. Certain defenses have been provided to the directors so that they can defend their post against any complaint made for breaching the provision of the duty of the directors. One of the main defense is business judgment rule that has been mentioned under section 180(2) of the Act. To attract this provision, directors are required to show that they had done all the acts for the best interest of the company. They have to prove that they had taken all the decisions in good faith. The business judgment rule has been established in the case of ASIC v Rich. Further, in Daneils vs Anderson, it has been held that all the directors should have to maintain standard duty of care and should not make any unrealistic approach. On the other hand, according to section 189 (a) (i), it has been mentioned that the directors could depend on the advise provided by the employees or experts.
Application:
In the present case, it has been observed that the alleged directors of the company had made certain financial disclosure without verifying the financial statement of the company and made certain assessments and resolutions to that effect. This act had made a false framework regarding the solvency of the company and allegation has been made by ASIC against the directors of the company to this effect. However, it has been mentioned in the case that the directors were relied on the advice of the financial experts of the company. According to the provision of section 189 (a) (i) of the Corporation Act, the directors are allowed to make such attempt and this act could be termed as good faith.
Conclusion:
Therefore, it can be started that the directors are allowed to defend their position under section 180 (2) of the Act.
3).
Issue:
The main issue of the case is to identify whether Paul has breached the provision of section 181 of the Corporation Act or not.
Rules:
There are certain provisions mentioned under the Corporation Act 2001 that defines the duties of the directors. Considering the importance of their position, it has been mentioned under section 181 of the Corporation Act 2001 that the directors should act in good faith and always try to act for the benefit of the company. It has further been stated in ASIC v Adler that no directors are allowed to act for securing their personal interest. Further, the directors are required to disclose their material personal interest. Further, it has been mentioned in section 182 of the Act, no directors are permitted to use their post inappropriately. It has been mentioned in Mills vs. Mills that any act of the director that are not according to the proper use of director’s power will be treated as against the provision of the section 182 of the Act. In this case, the director will be held liable for breaching the provision of section 181 of the Act 2001. Similar principle has been observed in Permanent Building Society(in liq) vs. Wheeler, where the court has held that the directors should not use their fiduciary duties for improper purpose. Therefore, it can be stated that every director should have to think about the interest and benefit of the company. Otherwise, the director will be held liable for non-performance of duties mentioned in the Corporation Act 2001.
Application:
In the present case, it has been observed that Paul was the director of the company and had some shares in it. According to the constitution of the company, Paul had all the powers and it has been observed that he had secured certain special share for his wife. The main intention for allocating the special share is to confer all the power to his wife after his death. Further, he wanted to dilute the power of Peter, Clive and Don. This acts proved that he wanted to secure his personal interest and as a director, he is supposed to act for the best interest of the company and the other shareholders. However, he had failed to do the same. He had deprived other shareholders of the company and denied the interest of Peter, Clive and Don who are engaged with the company’s affairs on full time basis. It has been observed that he had done all the company related things for his wife who are quite novice for the business. According to the judgment mentioned in Mill’s case, Paul had failed to use his position appropriately and violated the provision of section `182 of the Corporation Act 2001. Further, according to the thesis of Permanent Building’s case, it can be stated that Paul had used all his fiduciary duties for his personal purpose and he did not think about the betterment of the company.
Conclusion:
Therefore, it can be stated that Paul had made a breach regarding his duties and failed to act in good faith as mentioned in section 181 of the Corporation act 2001.
Reference:
ASIC v Rich (2005) 23 ACLC 430
Balmain new ferry co ltd v Robertson (1906) 4 CLR 379
Corporation Act 2001 (Cth)
Curtis v Chemical Cleaning [1951] 1 KB 805
Daneils vs Anderson (1995) 13 ACLC 614
Hollier v Rambler Motors [1972] 2 WLR 401
L’Estrange v Graucob [1934] 2 KB 394
Mills vs. Mills(1983) 60 CLR 150
Permanent Building Society(in liq) vs. Wheeler (1994) 12 ACLC 674
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