Company & Associations Law Assignment
Question
Mason, Jacob William and Heather are directors of Ace Ltd, a company whose core business is fruit juice. Given the downturn in economy and the rising Australian dollar it had become increasingly difficult to meet sales targets. The company is considering various possibilities to improve profitability and decides to diversify. William suggests that the company diversify into canning mackerel fish as there seems to be in increased demand for this is Asia. This would be the first in Australia and all are most excited to be pioneers in this area and anticipate big profits. The company decides to invest $10 million into this project without further research into this matter. One year into the new venture the company is not successful and suffers big loss. It is later discovered that there was a significant report about high mercury content in mackerel fish found in Australian waters published by CSIRO (Commonwealth Scientific and Industrial Research Organization) which ACE was unaware of. It was also discovered that William is part owner of Spades Pty Ltd, the company Ace Ltd awarded the fishing contract to, which was unknown to the board. Advise the directors of Ace Ltd if they are in breach of any of the director's duties.