Wikiversity Law Reports/Grove v Flavel
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Full Court of the Supreme Court of South Australia
TL;DR: director who made use of information obtained as director to take steps to protect the director's own interests, to the detriment of other creditors of the company, acted improperly.
Facts
[edit | edit source]- Director and entities associated with the director were owed money by the company.
- The company had other creditors.
- The director foresaw insolvency for the company, and so took steps to obtain payment of debts to the director and associated entities in preference to other creditors.
- The director was charged with and convicted of breaching the duties of a director.
Held
[edit | edit source]- A director of an insolvent company (or a company at risk of insolvency) has a duty to consider the interests of creditors of the company.
- But the existence of duty to creditors independent of the duty to the company was rejected by High Court in Spies v The Queen (2000) 201 CLR 603, 635-637 [93]-[96].
- The director acted improperly.
Other publishers' references
[edit | edit source]- (1986) 43 SASR 410
- (1986) 11 ACLR 161
- (1986) 4 ACLC 654