QUESTION $1($problem question: consider using the IRAC method$)$:

DOCO Ltd is a listed Australian company which sells and installs surgical

equipment to Australian hospitals. The composition of the Board of Directors

of DOCO Ltd is as follows:

Mitchel Healey, Chair

Kelly Dillon, Managing Director

Kara Farrell, Chief Financial Officer

Amanda Edwards, Non$-$Executive Director

Noar Elms, Non$-$Executive Director

At a recent board meeting attended by all the directors the following matters

were discussed:

A long$-$term multi$-$million$-$dollar contract with HE Pty Ltd for HE Pty Ltd to

supply respite hospital equipment to DOCO Ltd$.$ The following information

subsequently became known in relation to this contract. The prices of the

equipment supplied by HE Pty Ltd were well above market price. Dillon's

family company owns $35\%$ of HE Pty Ltd$\text{'}$s shares. No declaration was made

of an interest by Dillon. Elms suspected $($but was not certain$)$ that Dillon had a

financial interest in HE Pty Ltd but did not mention his suspicions to the other

directors.

Consider the potential liability for breach of director's duties under the

Corporations Act $2001($Cth$)$ I Refer toTappropriate sections of the

Corporations Act $2001($Cth$)$ and to case law.

To what extent could any directors rely on defences contained in $s$

$180(2)$ of the Corporations Act $2001($Cth$).$