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Homer is an accountant and a non-executive director of Simpson Homes Pty Ltd, a home...

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Accounting

Homer is an accountant and a non-executive director of Simpson Homes Pty Ltd, a home renovation company. The executive director is Bart, a qualified builder. Marge is the other non-executive director. Homer has a busy accounting business and is, therefore, unable to attend all the directors meetings. When Homer does attend meetings, he asks very few questions and generally agrees with whatever Bart proposes. The company was awarded a large contract to renovate several government-owned houses. Soon after the work started, it becomes obvious that the company would lose considerable money on the contract. The extent of the required work had been grossly under-estimated. Marge had queried the contract price before the contract was entered into but was assured by Bart that the contract would be profitable. It was also learnt that one of the main sub-contractors engaged by Simpson Homes to work on the government contract was a plumbing and electrical company owned by Barts son, Millhouse.

Discuss whether any of the directors have breached any of their duties, including any actions that may be taken by ASIC.

Your answer must include case law (where relevant) and the provisions of the Corporations Act 2001.

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