Under statutory duties section 180 of the corporation Act, the director should exercise care and diligence in his business decision making such that an objective standard-of-care exists. The section 181 states that director must act in good faith and must act with a proper purpose and intention. Section 182 specifies that the director must not abuse their position advantage within the company and in a similar note, section 183 states that they should not make use of information they receive in an improper manner. Criminal offenses are also laid out under section 184.
Under the common-law duties of acting in good faith, it could be said one of the director was not exercising good faith. A director has to be honest and open in any situation. In the case of Bill, it could be said he was not being honest and upfront. Bill was a majority shareholder in a resort in Broome where the new AGM meeting was being planned. Furthermore, it is identified that the vast majority of them were situated elsewhere and only two of the directors were actually situated in Broome. In the advice to Lucy, a breach of common law according as per duty to act bona fide for the interests of the company is recommended to be raised in the court. As cases like Whitehouse v Carlton Hotel Pty Ltd (1987) 162 CLR 285.
Walker v Wimborne (1976) 137 CLR 1 show this could be held as a breach in the court, because the director Bill did not exercise the rational judgment that anybody else would have exercised in the same situation. He was not honest and did not act in good faith as it appears he seemed to have acted with his own profit agenda in mind. This was not coherent with the maximization of benefits for the company or the best interests of the company. This is evident in the monetary loss the company would have to suffer when the AGM was shifted to Broome. The costs of taking the flight and accommodation put the amount to the AGM being held in Broome around $20,000 more, compared to holding it in Canberra. Section 180 of the objective standard of care and section 181 requiring action in good faith, under statutory duties has hence been breached in the same principle.