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  3. 5 michelle whilst a director of just cosmetics ltd was...

Question: 5 michelle whilst a director of just cosmetics ltd was...

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5) Michelle, whilst a director of Just Cosmetics Ltd, was approached by its competitor, New Creations Ltd, to provide the latter with Just Cosmetic’s list of clients together with information on a range of new products about to be launched by Just Cosmetics Ltd on the market. 


Michelle agreed to this approach in exchange for the offer to become Managing Director of New Creations Ltd. and in cash payment of $100,000.


The other directors of Just Cosmetics Ltd have now discovered that Michelle since Michelle left the company to join New Creations Ltd, the latter had brought out a range of products almost identical to the ones to be launched by Just Cosmetics Ltd. 


The new products have proved to be popular and New Creations Ltd has made a large profit. Consequently, when Just Cosmetics Ltd launched their product, they suffered a huge loss as their clients had already bought the product from New Creations Ltd. 


Michele has now come to see you for advice.

With appropriate statutory references, explain to Michelle why she has breached each of these duties. 


a)      Michelle responds to your advice by claiming that from her knowledge of business and corporations’ law, she is entitled to use the “Business Judgement Rule” to defend these allegations. 


In defining this expression with reference to relevant statutory provisions, advise Michelle whether she is correct.

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