Hydro Fracking Limited (‘HFL’) - Case Study - Law Assignment Help

Assignment Task:

Background

Hydro Fracking Ltd (‘HFL’) is an Australian company incorporated in 2012. The registered office in is Melbourne and has offices in Adelaide and Perth. HFL does not have a written constitution. HFL’s corporate mission is to introduce the “Shale Revolution” to Australia by developing new unconventional gas projects.

Hydraulic fracturing (also known as ‘fracking’) is a process of stimulating oil and gas wells through high pressure, fracturing shale rock formations and unlocking previously trapped oil or gas. Fracking – a type of ‘unconventional gas’ – is controversial and is strongly opposed by environmental activist groups. Generally, gas has a lower emissions profile compared to coal for energy generation. This finding is disputed by some researchers and remains the subject of scientific debate.

The board of Hydro Fracking Ltd consists of five directors:

• Edward is the Chairman of the Board. He does not have any executive role. He is also a director of the South Australian Rural Finance Ltd.
• Louise is the Chief Executive Officer.
• Richard is the Chief Financial Officer and the Company Secretary.
• Philippa is a non-executive director as nominated by Global Fracking Corporation.
• Monique is a non-executive director as nominated by NRG Super.

REQUIRED QUESTIONS

1. Louise is worried about being called a “carbon criminal”. She recently heard a conference presentation where the presenter emphatically claimed, “Directors have a duty under the Corporations Act to ensure their company mitigates against the risks of climate change.” Evaluate the truth of this statement.

2. Advise Louise as to whether there is any merit to ASIC bringing any action against any or all the directors for a breach of their statutory duties as directors of HFL. If ASIC are successful, outline the potential penalties or remedies that a court could impose against the directors. (Note: consider only statutory duties, but you should refer to case law as relevant)

3. Louise wants to remove Edward from the Board of Directors. Consider each of the following possibilities and discuss any procedural requirements.

(a) If Victoria Police charge Edward with “obtaining financial advantage by deception” (an indictable offence under section 82 of the Crimes Act 1958 (Vic) carrying a maximum sentence of 10 years imprisonment), will he automatically cease to be a director of HFL?

(b) Can the Board remove Edward as a director of HFL?
(c) Can GFC remove Edward as a director of HFL?

4. Advise Louise as to whether Monique has validly resigned as a director of the company.

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