Business Law Assignment: Breach of Duties

Added on - 28 May 2020

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Running head: BUSINESS LAWBusiness LawName of the StudentName of the UniversityAuthor Note
1BUSINESS LAWTable of ContentsIntroduction......................................................................................................................................2The duties or responsibilities breached............................................................................................3Analysis of the case.........................................................................................................................5The relevance of the decision to the development of Australian Corporation Law........................7Reference.........................................................................................................................................9
2BUSINESS LAWASIC v Australian Property Custodian Holdings Limited (NO 3)[2013]FCA 1342IntroductionASIC v Australian Property Custodian Holdings Limited (NO 3)[2013]is one of the mostfamous case of Australian Federal Court where the organization has been found to breach theCorporation Act 2001(Cth). In this case, the plaintiff isAustralian Securities and InvestmentsCommission (ASIC)and defendants areAustralian Property Custodian Holdings Limited (ACN095 474 436),Mr. Mark Frederick Butler,Mr. William Lionel Lewski, Mr. Kim Jaques,Mr.Peter ClarkeandDr. Michael Richard Lewis WooldridgeASIC has alleged against the six defendants that they have contravened the CA. ASIChas been stated that the defendant has own responsibility entity towards the managed investmentscheme underPart 5Cof the act according to the section601FC. The directors of the companyalso own the duty of the offices of the responsible entity according to the section601FBof thisact. The rule has prohibited the related party transaction for the responsible entity withoutapproval of the members which is against of section208of this act. The prohibition upon thedirector’s of responsible entity being has been involved has created the contravention accordingto the section209 of the CA. Therefore ASIC has been alleged the contraventions of the sectionsand claimed for penalties as the punishment and orders prohibiting five former directors ofManaging corporations of APCHL.
3BUSINESS LAWThe duties or responsibilities breachedAccording to the fact of the case the first defendant isAustralian property custodianHoldings Limited (Receivers and Managers Appointed in Liquidation ControllersAppointed APCHAL)has been found with the responsible entity under the managed investmentscheme of the Aged Care Property Trust and Prime Retirement or Prime Trust or the Trust. Fromthe second to sixth defendants are the directors of this company who have been alleged for thecontraventions due to the relation with the company which inclusive in its capacity ofresponsible entity of the prime trust.However in this case APCHAL has not actively join in the preceding and effectivelysubmitted to the judgment. However the court has been seeking damages against the organizationand other five defendants who have been found to be related in the conduct of the breach of theduties. ASIC has been pleaded three groups of contravention in this case.The first group ofcontraventionhas been alleged about the meeting which has been held on 22nd August 2006where the board has been resolved to lodge with ASIC which include:A consolidate constitution which is incorporating with the amendments so that it will beeffective according to the section601GC (2)The lodgment resolution it has been mentioned that while passing the lodgmentresolution the company has been prevented the section601FC (5) which breached theirdiligence and duty of care under section601FC (I) (b).The company has failed to act with the best interest of the members of the trustaccording to the section601FC (I) (c).They have also mentioned that according to the section of601FC (I)(m)it is the duty ofthe organization that they must comply with the duty which has been imposed on it by
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