Company directors – improper conduct

Phoenix Constructions Queensland Pty Ltd v Coastline Constructions Pty Ltd and Michelle McCracken and Jarrod McCracken [2011] QSC 167

The Supreme Court of Queensland has made an award of damages under the Corporations Act 2001 (Cth) for the ‘improper’ conduct of a company director. On the facts, the director had caused the company to enter into a joint venture agreement principally for the benefit of someone other than the company; indeed, it was a positive detriment to the company. The case highlights the importance of company directors understanding and distinguishing the interests of the company from their own personal commercial interests and the commercial interests of others. The Court affirmed that it is sufficient for the purposes of a claim for damages that the Court has jurisdiction to grant an injunction restraining the director.

Reproduced with permission of Allens and in accordance with their terms of use.

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