Mei-Ling, Belinda, Chan and Tran all run a family owned company called Be Mine Pte Ltd. The company is a small florist business which has two stores.
The company has 9 shareholders consisting of close friends, family members and the four directors.
Recently the directors have been offered the opportunity to purchase both premises in which the stores are run, as the current owners are now selling. Tran is asked by the board to arrange financing from the local bank.
At the next meeting Tran informs the board of the loan terms and at this meeting the following takes place;
Mei-Ling spends the entire meeting playing candy crush on her mobile phone and when asked to vote just nods.
Belinda doesn’t ask any questions and just agrees to pass the resolution allowing the loan.
Chan who understands floristry well as she has a degree in design, but struggles to understand finances in general, doesn’t object, but instead agrees to the proposal although she has some hesitation due to recent downturn in orders being placed.
Although the resolution is passed Tran comes to you with hesitations of his own in regards to the director’s behaviour at this meeting.
Required:
Advise all four directors as to whether their behaviour has breached any common law or legislation in regards to their responsibilities as directors. If they have breached their duties what defences if any do they have at both common law and statutory law?