BUSINESS LAWS

Added on - 08 Nov 2019

  • 9

    pages

  • 2025

    words

  • 48

    views

  • 0

    downloads

Showing pages 3 of 9
Running head: BUSINESS LAWSBusiness LawsName of the studentName of the universityAuthor note
1BUSINESS LAWSCase introductionThe case of ASIC v Lindberg [2012] VSC 332; 91 ACSR 640 is related to the breach ofdirectors duties and the defendant director being negligent towards the operations of theorganization. In this case the plaintiff was the Australian Securities and Investment Commissionwas the plaintiff and Mr Lindberg the Managing director of AWB LIMITED was the defendant.Civil penalty proceedings have been instituted by the ASIC against the defendant Mr Lindbergfor the contraventions of the Corporation Act 2001 (Cth) (CA). The breach was related to theinvolvement of the director in wheat trade with Iraq for his organization through misusing OilFor food Program which was administrated by United Nations.The defendant director had beennegligent over providing bribes to the government officials in Iraq in order to secure businessdeals. The director was found in this case to not apply diligence and care in relation to theoperations of the company in Iraq and thus leading to loss for the company.The proceedings were commenced in late 2009 against the defendant; however theproceedings had been adjourned to ensure that AISC can amend its claim against the defendants1.There was a lengthy negotiation between the parties to the case as the hearing did not resume forthe purpose of settling the proceedings. The defendant through the process of negotiation agreedformally that he had made four contraventions in relation to section 180(1) of the CA. The mainadmission was that with respect to the provisions of the section the defendant director was notable to deploy reasonable skill and care with respect to his obligations towards the organizationand all other allegations against him had been dismissed2.1ASIC v Lindberg [2012] VSC 332; 91 ACSR 640 at [1]2ASIC v Lindberg [2012] VSC 332; 91 ACSR 640 at [2]
2BUSINESS LAWSThe parties to the case have provided a statement related to the contraventions which have beenadmitted, the statement is in relation to the facts which have been agreed and submission whichhave been agreed on the relevant legal principles. The appropriate penalties in relation to thecontraventions which have been agreed have also been submitted by the parties, which are adisqualification period of two years and a pecuniary penalty of $1000003.As a declaration of contravention cannot be made by consent of ASIC and the alleged directorunless a basis is found by the court in relation to the facts that evidence satisfy the statutoryrequirements which signifies that the contraventions have been made. The burden of in this caseis on the ASIC to prove the contraventions in relation to the balance of probabilities.The duties breached by the directorsIn the case of ASIC v Cassimaties the director have allegedly violated the provisions of theCA related to section 180(1). The section states that the directors and officers of an organizationhave the responsibility of implementing the best possible skills they have towards the companyand continue the operations of the company with care and diligence. The actions of the directorsand the other officers have to be in good faith and in best interest of the company.The section is said to be violated when a reasonable director placed in the same position andcircumstances of the alleged violator of the duty would have not indulge in actions which hadbeen done by the violator. To make it simple the actions of the alleged contravener of the sectionare compared to those of a reasonable person to analyze the actions were in the best interest ofthe company or not.3ASIC v Lindberg [2012] VSC 332; 91 ACSR 640 at [3]