Property Solutions is a property development company. It has three directors: Abe, Bob and Connie. Several months ago, there was an opportunity to acquire a vacant site from Lew Developments. Abe told the board that, in his opinion, the site was suitable for a multi-storey apartment development. The Board also relied on information provided by Bob in a presentation outlining how the acquisition could be funded and offering an opinion that the project would be highly profitable.
Bob did not do any detailed research and was not aware that the Local Council had forbidden an apartment development on the site. This would have been easy for him to find out if he had made some basic inquiries. Further, Abe did not inform the Board that Abe and his family have a significant stake in Lew Developments.
The project was a financial disaster. Property Solutions paid too much for the site, was not able to construct an apartment building on it and the costs of borrowing increased dramatically after the date of purchase.
Advise whether Abe and Bob have breached any of their director’s duties under the Corporations Act 2001 (Cth). Cite sections of the legislation and case law to support your answer.