logo

Corporation Law : Case of Vrisakis v Australian Securities Commission

   

Added on  2020-05-28

10 Pages2697 Words361 Views
Corporation Law20181Corporation Law Vrisakis v Australian Securities Commission [1993] 9 WAR 395Analysis ofCase

Corporation Law2018Introduction Directors’ duty is a term which is amongst the leading provisions covered under the CorporationsAct, 2001 (Cth). This is the act which has to be followed by all of the companies in Australia asthis legislation is applicable in the Commonwealth of Australia (Latimer, 2012). Through thisact, the directors and the other officers of the company are given certain duties andresponsibilities. As a result of these duties and responsibilities, the directors have to carry ontheir duties and make use of the powers in a manner which highlights care, diligence and is ingood faith of the company. The key director duties are covered under Part 2D.1 of this act, butthere are other duties also, which are covered under other parts of this act; for instance, to notindulge in insolvent trading (Cassidy, 2006). There have been a number of cases were thedirectors and the key officers of the company have been held accountable for breaching theirduties, and this was true even before the Corporations Act came into force. One of such cases isVrisakis v Australian Securities Commission [1993] 9 WAR 395, in which the breach of dutytook place under the Companies (Western Australia) Code (Austlii, 1993). What happened?In this case, Vrisakis was a leading and well known corporate solicitor. As a part of the rescuepackage of Rothwells Limited, he had accepted an appointment to the board of the company. Atthis time, he acted on behalf of both the company, and Laurie Connell who was the principal ofthe company. An agreement had been attained between the parties interested in this transactionin a mutual manner and this was in form of a package, which covered the NCSC and theGovernment of the Western Australia. Along with this was covered the business plan for the2

Corporation Law2018company. A claim was brought by Australian Securities Commission against Vrisakis where itwas alleged that Vrisakis had failed in exercising the requisite degree of diligence and care as hehad failed in taking the require steps for making certain that the proper effect had been given tothe terms covered under the business plan and in the management restructuring. The particulars,i.e., the details of the plan were provided by Australian Securities Commission to show that thesaid business plan had not been implemented by Virsakis. However, the Australian SecuritiesCommission denied providing the details on what should have been done by Vrisakis in thissituation. At the very first instance, Vrisakis had been convicted; however, an appeal was madefrom this decision before the Full Court of the Supreme Court of Western Australia (Gibson,2003). Duties in questionBefore Corporations Act, 2001 came into being, a number of other statutes covered the directorduties and one of these is the Corporations Act, 1989. Section 232 of the Corporations Act, 1989provides the duty and liability for the officers of the company. Subsection 1 of this sectionprovides that directors, executive officers, and secretary of the company are included in thedefinition of officers. Under subsection 2 it is provided that the officers of the company have oact in an honest manner at all times when they discharge their duties and when they make use oftheir powers bestowed upon them through the office which the hold. Further, subsection 4provides that this discharge of duty and use of powers has to be done in a manner of care anddiligence as is done by a prudent person holding a similar position in the company and as theywould exercise in the situations faced by the company (Federal Register of Legislation, 1998). 3

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
Analysis of Duty of Directors under s180(1) of Corporations Act
|9
|3103
|208

(solution) Business Law : Assignment
|9
|2266
|206

Storm Financial Limited Assignment Report
|8
|1744
|24

LAWS19032 - Company & Association Law
|14
|4103
|113

Breach Of Director’s Duties.
|11
|1113
|391

The Corporations Act 2001| Company Law
|7
|1038
|143