Corporations Act - Assignment Sample
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Added on 2021-06-17
Corporations Act - Assignment Sample
Added on 2021-06-17
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1ContentsASIC v Mariner Corporation Limited [2015] FCA 589...............................................................................2Case introduction.........................................................................................................................................2The duties/responsibilities breached (ex. CA sections 181 or 588G) and explain why the duties were breached......................................................................................................................................................2Duties that were breached........................................................................................................................2Why the duties were breached.................................................................................................................2Discuss and critically ANALYSE the court/tribunal decision and the reason for the decision in view of the Corporations Act....................................................................................................................................3Where possible and applicable, the relevance of the decision to the development of Australian corporations law or the impact of the decision on the operation of companies in Australia........................5Reference List..............................................................................................................................................7
2ASIC v Mariner Corporation Limited [2015] FCA 589 Case introductionIn the given case the lawfulness of the acts of the defendant conduct was analyses which isrelating to the announcement that was made on 25th une 2012 regarding the off market takeoverbid by the Mariner Corporation Limited for all of the issued capital of Austock Group Limited at10.5 cents per share. On 2nd April an originating application is filed by ASIC and an action is bought against Marinerand 3 of its directors, Mr Darren Olney-Fraser (Mr Olney-Fraser), Mr Donald Christie (MrChristie) and Mr Matthew Fletcher (Mr Fletcher). It was contended by ASIC that there areviolations of section 180, section 631 (2) (b) and section 1041H of the corporation Act 2001regarding the takeover announcement made by Mariner for Austock. The duties/responsibilities breached (ex. CA sections 181 or 588G) and explain why theduties were breachedDuties that were breachedThere were several duties that were considered by ASIC violated by Mariner. i.ASIC claimed that Mariner does not have the adequate financial resources to fund thebid and thus there is violation of section 631 (2) (b) of the corporation Act 2001;ii.ASIC claimed that that the acts of Mariner were deceptive and misleading and thusthere is violation of section 1041H of the Corporation Act 2001;iii.ASIC claimed that that the acts of Mariner were such that were not carried out in acareful and diligent manner and thus there is violation of section 180 (1) of theCorporation Act 2001. Why the duties were breachedASIC brought proceedings against Mariner by claiming violation of duties on the part ofMariner. ASIC claimed that there was violation of section 631, 180 and 1041H of theCorporation Act 2001.Reasons why section 631 (2) was breachedOn 25th June 2012 mariner made an off market takeover bid for all of the issued capital ofAustock Group Limited at 10.5 cents per share. However, when the bid was made at that timeMariner does not have enough monetary support to fund the bid. No outsider, third party or anypersonnel was willing to fund the bid as the no name of any person was provided by Marinerwhich was found on the addendum spreadsheets or in the Austock takeover paper. No attempt ismade by Mariner to develop any kind of relationship with any person which assures to financethe takeover bid. Considering that there was no finance in hand nor any arrangement was made to support the bid,there is clear violation of section 631 on the part of Mariner.
3Reasons why section 1041H was breachedA representation was made by Mariner on 25th August 2012 that it would make a proposal to theAustock shareholders under Chapter 6 to buy the fully paid up shares at $10.5 per share. Thus aprice representation was made which in reality was nothing but an act of deception as Mariner isnot permitted to make any takeover bid for value less than 11 per share. A funding representationwas also made that Mariner has the ability to pay $10.5 whenever requires which was also nottrue. Thus, there is deception and misleading acts on the part of Mariner which is nothing but anact pff violation of section 1041H of the Corporation Act 2001.Reasons why section 180 (1) was breachedMr Olney-Fraser was the director of the company and as per ASIC he was in violation of section180 (1) as he did not acted in careful and diligent manner and relied on ASIC v WarrenmangLtd(2007) and (ASIC v Rich (2009). He made a takeover decision and an announcement wasmade which was breach of section 631 which eventually resulted in breach of section 180 (1) Discuss and critically ANALYSE the court/tribunal decision and the reason for thedecision in view of the Corporations ActDecisions of the court i. The originating application of the plaintiff was dismissed.ii.Within 14 days of the date of the decisions, the parties must file and serve the writtensubmissions on the question of costs;iii.Within 14 days of serve of written submission, the parties must serve the response.Reasons for the decision of the court There are various reasons that are lead by the court while dismissing the application of ASIC.The reasons include:No Violation of section 631 (2) (1)Section 632 imposes penalties for reckless acts by the director and the same is subjective innature. The court analyzed that there was no recklessness on the part of the directors of Mariner.There is no violation of section 631 (2) 1) by application of objective test as well. The acts of the directors are found to be in violation of section 631 only when a takeover bidmust be proposed publically. The announcement that was made by the directors of Mariner was apublic proposed announcement herein Mariner bid for all of the issued capital of Austock GroupLimited at 10.5 cents per share. Now, if the offer made by Mariner is confirmed then Marinerhas to pay $7 million by October 2012. It was also confirmed that at that time Mariner was not inthe position to pay its dues and the financial resources were also not enough to support theliability. Only $500,000 was agreed by Mr Neil to pay to Mariner to support the bid.
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