Reference no: EM133256931

Question: Matthew has been a non-executive director of Property Plus Ltd (PP) for the last 4 years. Matthew completed his university studies in 2019 and has been working as an accountant since that time. PP decided to purchase a block of land from Golden Deals Pty Ltd (GD) for development near Tamworth in NSW. Matthew considered this to be a great opportunity for PP. He based this view on a long and detailed report prepared by the Chief Financial Officer of PP. Matthew read the first page of the report, which stated the purchase of the property could be a great commercial opportunity for PP, and did not read any further as he was busy studying for his Certified Practicing Accountant exams. If Matthew had read the remainder of the report, he would have noticed that GD has been in significant financial decline in the last 2 years and that the report specifically stated that prior to purchasing the land PP should have it independently valued.

Matthew did not seek an independent valuation of the property and the price paid by PP was significantly above market value. As a result, PP becomes insolvent. Advise Matthew whether he has breached his duty under s 180 of the Corporations Act 2001 (Cth). Do not discuss defences.