Understanding Director Duties: ASIC v Healey Case and Breach of Responsibilities

AUSTRALIAN SECURITIES AND
INVESTMENTS COMMISSION V
HEALEY [2011] FCA 717
(Student Details: )
Business and Corporation Law

Introduction
 Directors and officers in the companies of
Australia have responsibilities under Part
2D.1 of the Corporations Act, 2001.
 Purpose for imposing the duties on the
directors stems from the fact that the
business of the company is run on behalf of
the shareholders by them.
 ASIC v Healey [2011] FCA 717- seven
directors of the company, along with its
Chief Financial Officer held to have
breached the duties imposed through the
governing act (Walmsley and Puri, 2011).

ASIC v Healey
 ASIC v Healey, civil proceedings were launched
by ASIC back in Oct 2009 against the present
and ex non-executive director, the former CFO,
and the former CEO of different entities, in the
Federal Court of Australia, within the Centro
Retail Group and the Centro Properties Group,
collectively referred herewith as Centro
(Australian Institute of Company Directors,
2011).
 Declaration was sought out by the ASIC
regarding the relevant officers and directors
breaching the duties which they had under this
act, towards the entities within Centro, for the

ASIC v Healey
 The case which was brought by the ASIC revolved around
the central proposition regarding the director duties to read
and understand the financial statements in a proper
manner; following by the application of knowledge for
having or for the need of having attained for performing the
particular task.
 ASIC claimed that the financial reports created of the
Centro group for the year which ended on June 30th, 2007
were not complying with the standards of accounting, and
also did not provide the requisite true and fair view of the
performance of the entities and of the financial position of
them, due to the failure in classification of a major value of
the interest bearing liabilities as being the current liabilities.
 The crucial matters were not disclosed in the reports,
including the non-disclosure of the major amount of short-
term debt, along with the guarantees for the short-term