Coope v LCM Litigation Fund Pty Ltd

(2016) 333 ALR 524; [2016] NSWCA 37

NSW Court of Appeal

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Interrogate

Catchwords

1. Corporations
2. › Directors
3. › Fiduciary duties
4. › Conflict of interest and duty
5. › Obligation to seek fully informed consent of the board
6. › Whether failure to disclose personal interest in transaction constituted breach of fiduciary duty
7. › Whether expectation or hope of future advantage sufficient to constitute relevant interest
1. Corporations
2. › Directors
3. › Employment as managing director
4. › Serious misconduct
5. › Whether breach of employment contract and fiduciary duties warranted description of serious misconduct
6. › Whether conduct antithetical to mutual trust and confidence
1. Contract
2. › Employment contract
3. › Construction of contractual terms
4. › Obligation to disclose significant matters of detriment to company
5. › Whether obligation arises where there is real likelihood of future detriment
6. › Whether obligation is continuing
1. Corporations
2. › Termination payments
3. › Construction of s 200F of the Corporations Act 2001 (Cth)
4. › Whether payment of damages for breach of contract pursuant to court order falls within exemption in s 200F(1)(aa)
5. › Whether s 200F(2) cap applies to court-ordered damages
6. › Corporations Act 2001 (Cth), ss 200AB, 200B, 200D, 200F

Quick Take

A director designated to negotiate on behalf of a company who receives a personal offer from the counterparty must disclose that interest to the board before presenting the transaction for consideration, even at a conceptual stage. An intention to disclose at a later stage if the proposal progresses is insufficient. The exemption in s 200F(1)(aa) of the Corporations Act for benefits given under a court order is not qualified by the cap in s 200F(2), so court-ordered damages for wrongful termination of a managing director are not subject to the termination payment cap.