Summer 2018

Question 4
Parts (a) and (b) carry equal marks
Joe and Jack are setting up BlackJack Trading Ltd. to operate a restaurant in Cork. They have heard that the
Companies Act 2014 has made some changes regarding directors’ duties.
a) Advise them on the codification of directors’ duties under s. 228 of the Companies
Act 2014 and how this relates to the existing case law.
b) In addition advise them on the enforcement of directors’ duties under company law and how their duties
which they owe to BlackJack Trading Ltd can be enforced. Please refer to relevant case law and statutory
material.

Autumn 2017
Question 4
Mick is a Director and shareholder of Lennox Ltd. which manufactures and sells widgets. Recently the entire
Board of Directors has decided to expand their market into southern Europe, mainly Italy and Spain and with a
view to achieving that goal they have appointed Mick as Director of Marketing for that region, given his
linguistic abilities etc.

He was given a ‘marketing budget’ of €100,000.

At a recent Board meeting, Mick indicated that he has ‘spent’ over €300,000 on various trips to Spain, Italy and
Portugal with a view to identifying sales opportunities but to date no significant achievements have been made.
Joe and Sean, the two other executive directors, who are also hold 60% as shareholders, are very worried about
the levels of Mick’s spending.

On further investigation, conducted without Mick’s knowledge, they have discovered that Mick has set up his
own company, Chennox Ltd. which is manufacturing and selling a similar widget-type product in these three
European countries. This interest of Mick’s has not been disclosed to the Board or to the shareholders at general
meeting.

Advise Joe and Sean as to the relevant law on directors’ duties including the codification of these duties under
the Companies Act 2014; as to whether the company has any cause of action in relation to the activities of
Chennox Ltd. and the likely outcome of this action.

Winter 2017
Question 4.
Sara, Jack and Sinead are siblings and all of them are directors of Xtra Sports Ltd. which has operated a number
of sports clothing and equipment retail outlets throughout Ireland since 2010. This business is extremely
successful. However, Sara, who is the youngest, got a bit tired of the emphasis on sports and having expressed
the wish to get involved in the fashion retail business reduced her involvement with Xtra Sports Ltd. and set up
her own company– Sara Ltd.- with the full knowledge and blessing of Jack and Sinead. Sara remains a director
of Xtra Sports Ltd.
Sara Ltd. started to operate in 2015 and has been doing very well in the fashion retail business.
During a recent board meeting of Xtra Sports Ltd. the issue of a possible expansion of the business was
discussed, in particular the board had been offered the opportunity to acquire a premises in the centre of Cork
city at a good price. The board (all three directors) decided that further enquiries should be made with a view to
Xtra Sports Ltd. acquiring this premises. Following the board meeting Sara immediately approached the owners
of this premises and the following day entered into a contract for the purchase of the premises on
behalf of Sara Ltd. Sara Ltd. got the premises at an even better price than was offered to Xtra Sports Ltd. as Sara
had been in school with the owner’s aunt. Jack and Sinead have just discovered this turn of events. They are
extremely upset and feel very betrayed by Sara.

Advise them as to what action Xtra Sports Ltd. can take against Sara and what remedies they can seek from the
court under the Companies Act 2014.

Autumn 2016
Question 4 Answer (a) and (b):
Alexandra joined the Board of Directors of HealthPro Ltd. which is a small 'spin off' company founded by
scientists at the local university. Alexandra has extensive experience in the medical device sector having worked
for a US multinational for many years. She was invited onto the Board of HealthPro Ltd. as a non-executive
director with a view to advising HealthPro Ltd. on the development of further patented products for the
company. She is one of two non- executive directors, the other being a local businessman of some standing.
Recently, Oscar and Shay, two of the founding scientists and executive directors (there are three executive
directors) have identified some 'interesting' projects in India. Alexandra is concerned about the legal issues
involved in identifying projects from such a different part of the world. She is concerned particularly about
product quality, health and safety issues and of course her ignorance of relevant patent laws.
She seeks your advice on the following matters:

1. (a) The duties of skill and care which she owes to the company under modern Irish
company law. (30 marks) and
2. (b) Whether she is entitled to rely on the assurances of Oscar and Shay that all is above board legally?
(20 marks)

Winter 2016
Question 3
Parts (a) and (b) carry equal marks
Joe and Jack who are setting up Bullseye Trading LTD to operate a restaurant have heard that the Companies
Act 2014 has made some changes regarding directors’ duties.
1. a) Advise them on the codification of directors’ duties under s. 228 of the Companies Act 2014 and
how this relates to the existing case law.
 2. b) In addition advise them on the enforcement of directors’ duties under company law and how their
duties which they owe to Bullseye Trading LTD can be enforced. Please refer to relevant case law and
statutory material.
Winter 2015
Question 4
Mick is a Director and shareholder of Lennox Ltd. which manufactures and sells widgets. Recently the entire
Board of Directors has decided to expand their market into southern Europe, mainly Italy and Spain, and with a
view to achieving that goal, they have appointed Mick as Director of Marketing for that region, given his
linguistic abilities etc.

He was given a ‘marketing budget’ of €100,000.

At a recent Board meeting, Mick indicated that he has ‘spent’ over €300,000 on various trips to Spain, Italy and
Portugal with a view to identifying sales opportunities but to date no significant achievements have been made.
Joe and Sean, the two other executive directors, who also hold 60% as shareholders, are very worried about the
levels of Mick’s spending.

On further investigation, conducted without Mick’s knowledge, they have discovered that Mick has set up his
own company, Chennox Ltd. which is manufacturing and selling a similar widget-type product in these three
European countries. This interest of Mick’s has not been disclosed to the Board or to the shareholders at general
meeting.

Advise Joe and Sean as to the relevant law on directors’ duties including the codification of these duties under
the Companies Act 2014 and as to whether the company has any cause of action in relation to the activities of
Chennox Ltd. and the likely outcome of this action.