Case Study: Breach of Director's Duties
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Added on 2020-10-22
Case Study: Breach of Director's Duties
Added on 2020-10-22
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Case Study: Breach ofdirector's duties
Table of ContentsINTRODUCTION...........................................................................................................................1ASIC v Vizard, 2005........................................................................................................................1Background of the case...............................................................................................................1Duties and responsibilities of a director......................................................................................2Breach of duty under section 181................................................................................................3Criminal breach of liability under section 184............................................................................3Breach of Duty under section 599G............................................................................................4Contrast of the decided case with Rodney Adler........................................................................4Insider trading.............................................................................................................................4Judgement...................................................................................................................................4ASIC v Cassimatis [No.8] [2016] FCA 1023..................................................................................5Background.................................................................................................................................5Duty under section 180...............................................................................................................5Argument presented by the accused............................................................................................6Reasonable basis of the advice under section 945......................................................................6Relief from Civil penalty............................................................................................................6Judgement...................................................................................................................................6CONCLUSION................................................................................................................................7REFERENCES ...............................................................................................................................8
INTRODUCTIONAustralian corporation laws are the essence of UK company law. There exist only asingle statute that regulates the corporation area in Australia that is Corporation Act 2001. theAustralian Securities and Investment Commission is the only organisation that withhold theadministration and regulate the provisions of the statute. The history of corporation laws issomewhat related to the Constitution of Australia, according to which Australian parliament hasbeen provided limited power to control the corporation laws. As per the Article 51(1), power tomakes laws related to the betterment of the corporation has been given to the parliament. Alsoforeign corporations, and financial or trading corporations are formed within the limits ofCommonwealth. (Newburn, T. ed., 2012)The corporation are established by charters, legislations or prescription, is entirely aseparate legal organisation. The recognised corporation are known as corporation sole, similar toUK laws. But it is also separated from Australian statutory meaning of corporation, in somescenario. Mainly, corporation limited by shares are functioning in Australia. The directorsappointed to an organisation has certain liabilities and he has to comply with those duties, suchas reasonable care and diligence (section 180) and good faith and proper purpose (section 181).The directors are personally responsible for the breach of such liabilities under section 588G.Also, directors are obliged with some fiduciary liabilities such as mentioned under section 182and 183, duty on conflict of interest and the utilisation of confidential information, respectively.The directors are also liable for criminal obligations as per section 184.In this assignment ASIC v Vizard 2005 case has been taken to explain the fiduciary andstatutory duties of a director.ASIC v Vizard, 2005Background of the caseMr Stephen Vizard, was designated as non-executive director of Telstra Corporation(herein after TC) in 1996. Market related information was provided to him before disclosingsuch in to the market by Telstra. Mr. Vizard acted on information wrongly for the three timeswhich was gained by him during the course of directorship in the company.1
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