Carr v Resource Equities Limited [2010] NSWCA 286

Carr v Resource Equities Limited [2010] NSWCA 286

The appeal was dismissed because the appellants (Carr and Purves) breached statutory and fiduciary duties as directors of Resource Equities Limited in four transactions: overpayment of directors' fees, the Fox Technology investment, unlawful distribution of Asia Iron sale proceeds, and funding of litigation/administration costs to maintain board control. The finding of breach was supported by adverse credit findings, lack of good faith and proper purpose, and improper use of position for self-interest and against the interests of the company. The business judgment rule and exoneration under s 1318 were unavailable due to a lack of honesty and conspicuous dishonesty. No order for...

Parties
First Appellant: Leon Phillip Carr; Second Appellant: Nigel Charles Purves; First Respondent: Resource Equities Limited; Second Respondent: Richard John Thomas
Jurisdiction
Australia
Judgment Date
02 November 2010
Procedural Posture
Civil / Court of Appeal (appeal From Supreme Court of New South Wales)
Outcome
Appeal dismissed with costs.
Legal Topics
Directors’ Duties, Breach of Fiduciary Duty, Business Judgment Rule, Conflict of Interest, Equitable Contribution, Exoneration Under S 1318, Causation of Loss, Improper Share Issue, Clean Hands Doctrine
Corporations Law Equity Directors’ Duties Breach of Fiduciary Duty Business Judgment Rule Conflict of Interest Equitable Contribution Exoneration Under S 1318 +3 more

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Parties

Leon Phillip Carr

First Appellant

Nigel Charles Purves

Second Appellant

Resource Equities Limited

First Respondent

Richard John Thomas

Second Respondent

Procedural Posture

Civil / Court of Appeal (appeal From Supreme Court of New South Wales)

Legal Issues

  1. 1 Whether directors breached statutory and fiduciary duties under Corporations Act 2001 (Cth) ss 180, 181, 182 in relation to four transactions.
  2. 2 Whether directors were entitled to additional fees for extra work.
  3. 3 Whether the business judgment rule under s 180(2) applied.

Ratio Decidendi

The appeal was dismissed because the appellants (Carr and Purves) breached statutory and fiduciary duties as directors of Resource Equities Limited in four transactions: overpayment of directors' fees, the Fox Technology investment, unlawful distribution of Asia Iron sale proceeds, and funding of litigation/administration costs to maintain board control. The finding of breach was supported by adverse credit findings, lack of good faith and proper purpose, and improper use of position for self-interest and against the interests of the company. The business judgment rule and exoneration under s 1318 were unavailable due to a lack of honesty and conspicuous dishonesty. No order for...

Court Disposition

Appeal dismissed with costs.

Orders

  • Appeal dismissed with costs.