Corporations Law - Case Study

Running head: CORPORATIONS LAW
CORPORATIONS LAW
Name of the Student:
Name of the University:
Author Note:

CORPORATIONS LAW1
Issue:
The issue to be discussed in the instant case study is regarding the remedies if any
available to Peter Jones in relation to the three complaints made by him to the secretary.
Law:
The person holding the position of an officer or director of a company needs to be
diligent and careful while he is exercising his duties given to him. This has been found in section
180(1) of the Corporations Act 2001 (Cth), hereinafter referred to as CA. In respect of this
section the standard of diligence and care to be exercised by such officer or director is to be of
the same extent as exercised by any reasonable person holding such position of that officer or
director. It was entrenched in the Australian Securities and Investment Commission (ASIC) v
Cassimatis (No. 8) [2016] FCA 1023 case that any director who is found not exercising his
duties with due care and diligence will be made liable for breaching the said section 180 of CA.
Further, it is the duty of the director or an officer of any company that while he is
performing his duties and exercising the powers entrusted to him, such director or officer must
carry out these functions in good faith for an appropriate purpose and for incurring the best
possible result of the company (Ramsay, 2015). This is provided under section 181(1) of the
CA. This is also discussed in the case of Duncan v Independent Commission Against Corruption
[2015] HCA 32 where it is held that the directors of the company are expected and also work in
the best interest of the company.
Further any director or employee belonging to a company has a duty to prevent himself from
mis-utilizing his position or designation for any purpose which will be detrimental and improper

CORPORATIONS LAW2
to the interest of the company which is enshrined under section 182 of the CA. Such person is
prohibited to use his position in a way that will be against the interest of the company to which
he belonged. This was construed in the case of MG Corrosion Consultants Pty Ltd v Gilmour
[2014] FCA 990 where it was held that the directors are prevented from taking any measures or
steps that will cause detriment to the company and its shareholders. This case acts as a warning
to the directors that they must adhere to their duties laid down in CA.
Section 232 of CA again empowers the court to give an order u/s 233 of `CA when it
appears to the court that the company’s conduct while operating its affairs or any act committed
or omitted or a resolution passed or to be passed by such company will be contradicting to the
interest of the company. The court can even make an order if it finds that such act is either
oppressive, prejudicial in an unfair manner or making discrimination against any member of such
company. Section 233 further empowers the court to make an appropriate order if it is satisfied
that the conditions given under section 232 are satisfied and such order includes winding up of
the company, modification or repeal of the current constitution of the company, regulation of the
company affairs for future, purchasing shares by a member or person to whom share has been
allocated by operation of law or by will or even appoint a receiver as and when required.
Section 234 of CA further provides that an application for an order made under section
233 related to the company can be made by any member before the court of law. Such member
shall not be affected or influenced by any policy that is oppressing. Further he may also make an
application for another member who can be an existing member or even a past member or even a
member to whom share is being transferred by means of will or law. Moreover, it can be made
by any other person who may be asked by ASIC to make such application.