ASIC v. Rich [2009] NSWSC 1229- Case Analysis

Running head: COMPANY LAW
COMPANY LAW
Name of the Student
Name of the University
Author Note

1COMPANY LAW
ASIC v. Rich [2009] NSWSC 1229- Case Analysis
Background
One.Tel was an Australia based GSM service provider meaning it functioned mainly in
the telecom sector and eventually grew to become Australia’s fourth largest telecom service
provider before being shrouded in controversy which lead to its eventual downfall. Jodee Rich
and other executive directors of the company faced accusations of not discharging their duties as
directors effectively with respect to the duty of care they had towards the best interests of the
company. This duty is mandated by Section 180 of the Corporations Act, 2001 as well as
principles of common law.
Application
Corporations functioning within the jurisdiction of the Australian Commonwealth are
governed and regulated by the provisions of the Corporations Act, 2001. Common law principles
developed through judicial pronouncements are also applicable (Stout and Blair 2017).
Section 180 (1) of the Corporations Act, 2001 lays down the statutory duty of care and
diligence (Peden 2017). This provision states that when discharging one’s duties as the director
of a corporate entity one must observe a certain degree of care and diligence to ensure that they
are acting in the best interests of the company. Section 180 (2) of the act lays down the business
judgment rule which states that the provisions of Section 180 (1) would be deemed to have been
met when acting on behalf of the company if (Bottomley 2016):
 The judgment is made in good faith;
 If the business judgment is free from any personal self interest;