### (a) Controlling Act
***Corporations Act 2001* (Cth)**
* **Key Concept:** This is the primary legislation regulating companies, financial markets, and the duties and liquidation processes of corporate officers in Australia.

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### (b) Directors' Duties Provisions Engaged
The following statutory duties under the *Corporations Act 2001* (Cth) are engaged by the director's conduct:

1. **Section 180 (Care and diligence—civil obligation)**
   * **Key Concept:** A director must exercise their powers and discharge their duties with the degree of care and diligence that a reasonable person would exercise in the corporation's circumstances. 
   * **Application:** Engaged by continuing to trade, order stock on credit, and ignore explicit warnings from the bookkeeper regarding insolvency, falling short of the standard of a reasonable director.

2. **Section 181 (Good faith—civil obligations)**
   * **Key Concept:** A director must act in good faith in the best interests of the corporation and for a proper purpose.
   * **Application:** Engaged by diverting a profitable customer contract to a separate company owned by the director, actively placing personal financial interests above the interests of the struggling company.

3. **Section 182 (Use of position—civil obligations)**
   * **Key Concept:** A director must not improperly use their position to gain an advantage for themselves (or someone else) or to cause detriment to the corporation.
   * **Application:** Engaged by exploiting their position as sole director to siphon a corporate opportunity (the profitable customer contract) to their personal entity, causing financial detriment to the company and its creditors.

*Note: If the diversion of the contract or insolvent trading was done dishonestly or recklessly, criminal liability under **Section 184** (Good faith, use of position, or use of information) may also be engaged.*

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### (c) Insolvent Trading Provision Engaged
**Section 588G (Director's duty to prevent insolvent trading)**
* **Key Concept:** A director has a duty to prevent the company from incurring a debt if the company is already insolvent, or becomes insolvent by incurring that debt, and there are reasonable grounds for suspecting such insolvency. 
* **Application:** This provision is directly engaged because the director continued to order stock on credit (incurring new debts) at a time when the company had stopped paying existing debts as they fell due, had no prospect of funding, and the director had been subjectively warned of insolvency. The director may face personal liability for the unpaid debts incurred during this period.