Problem
I. John and Peter run a retail business NSW. The business is conducted in form of a company namely North Sydney Pty Ltd (the "Company"). John and Peter are shareholders and directors of the Company.
On 1 Sep 2022, John negotiated with ABC Bank (the "Bank") for a loan of $100,000 and told the Bank that the loan would be used for opening a new retail store in North Sydney. John did not inform Peter about the loan application and Peter was not aware of it at all.
On 1 Nov 2022, the Bank approved the loan application of the Company. John told the Bank that Peter was very busy and could not go the Bank at that moment. Nevertheless, he could arrange Peter to sign the loan contract at the Company's office and then returned it to the Bank shortly.
On 2 Nov 2022, John signed the loan contract as a director and forged Peter's signature as a director and then affixed the common seal of the Company. Afterwards, John returned the loan contract to the Bank. On 8 Nov 2022, the Bank transferred the loan amount of $100,000 to the bank account of the Company. John withdrew all monies and absconded.
Task:
Discuss whether the Company would be bound by the loan contract to pay the loan amount and interest under the Corporations Act 2001 (Cth).
II. From 1 Nov 2011 to 31 Oct 2022, Sarah was a director of Sydney Pty Ltd (the "Company"). The major business of the Company is to publish a free lifestyle magazine widely distributed in NSW and the major source of income is advertising revenue. She had become dissatisfied with her job with the Company and planned to leave the Company. As such, Sarah formed her own company with the major business in publication of a free lifestyle magazine. Afterwards, she resigned from the position of director of the Company with effect from 1 Nov 2022.
Before her resignation, Sarah sent emails to all clients of the Company to invite them to place advertisements in her newly established company from Nov 2022 onwards. In addition, she compiled a list of the clients of the Company with all contact details including but not limited to email addresses and phone numbers. Many of the clients of the Company has placed advertisements with her newly established company from Nov 2022.
Task:
Advise Sarah of any breach of directors' duties to the Company with reference to case law and the relevant sections of the Corporations Act 2001 (Cth). If so, what remedies might be available to the Company?