HA3021 Corporations Law Assignment: ASIC v Vines Case Analysis Report

This assignment analyzes the Australian case of ASIC v Vines, a significant legal precedent concerning breaches of director duties under the Corporations Act 2001 (Cth). The report begins with an introduction to the case, outlining the facts, including Mr. Vines' actions during a takeover bid for GIO Australia, and the subsequent breach of duties. It then delves into the specific sections of the Corporations Act that were breached, particularly section 180(1) (formerly section 232(4)), which addresses the duty of care and diligence. The analysis further examines the Court of Appeal's decision, including the penalties imposed and the court's reasoning. The report concludes by discussing the impact of the decision on Australian companies, highlighting the changes in corporate governance policies and the increased emphasis on ethical programs and training to prevent similar breaches in the future. The case underscores the importance of director responsibilities and the consequences of failing to meet legal obligations.

VIDEO TRANSCRIPT
Hello, the case of ASIC v Vines was the leading case of Australia. In this case I will discuss
that how the duties and responsibilities of an officer had been breached. Firstly, I will give
the introduction of the case that how this breach had taken place by analysing the facts of the
case. Secondly, I will discuss the laws that had been breached of the Corporation Act.
Thirdly, I will discuss the Court decision and analysing the points on which the court had
decided their case. Lastly, I will discuss the impact of the decision of the Court of Appeal on
the Australian Companies working. In this case, majorly the laws of the corporations Act had
been breached. There is a need that the companies must ensure that they had explained all the
laws of the Corporations Act that has breached by them.
Here the analyse of the case by introducing the case facts
 Mr Vines at many times not worked his duty with due care and diligence during the
course of takeover bid for GIO Australia
 The profits that was forecasted but due to the catastrophe in America the margin had
been declined
 Mr Vines knows that the situation was miserable then also he took the bid by making
an expectation that it will go beyond from $60-65 million.
 Bid closed with the reach of $74 million and on the closing of offer, 57% of the
shareholders had accepted the bid.
 However Mr Vines unknown that the amount was increased but it was known by the
some of the people of AMP
 The ASIC had found that MR Vines had breached the certain laws of the
Corporations Act.
 The Lower Court had found Mr Vines to be guilty for breaching the certain laws that
was appealed by Mr Vines in the Court of Appeal.
 The Court had penalized Mr Vines for the breach
 The Court had made him also liable to pay him the ASIC’s Costs.
The duties of the director had been breached in this case as majorly the section 232(4) of the
Corporation Act. Now at present it is included in the section 180(1) of the Corporations Act

had been breached that states the director or the officer had not done his duties with proper
care and diligence.
 Mr Vines had been found to be in the Contravention of his duties to work with due
care and diligence while signing the management sign off had failed to take some of
the positive steps in advising the Due Diligence Committee based on assumptions that
are underlying the profit forecast
 Mr Vines had contravened his duties to work with care and diligence while supporting
the integrity of the forecast of the profit of the GIO profit to the committee of Due
Diligence
 Mr Vines had contravened his duties to work with proper care and diligence as it was
failed in giving the attention to the estimate of the GIO Re profit would be achieved
after Part B had been issued.
Now I will discuss the decision that had been given by the Court of Appeal in this case.
The Court had found Mr Vines for the breach of his duties and was penalized with
$100,000 and had ordered to pay the 22% of the ASIC’s Costs. The Court had rejected
the maximum of contention of Mr Vines. Mr Vines had contended that the duty of care
and diligence had not been breached that is required in establishing the statutory duties as
it was not higher than what was required in relation to the Common Law or Tort. It is said
by the Court that the amount of breached of the statutory duties was enough to be
breached. The negligence cannot be justified that it was high and the court had found Mr
Vines to be guilty for the negligence. The decision of the court was an eye opening for all
those who are involved in the negligent activities. The Court of Appeal had held the
orders of the lower court in this case. However, the Court had provided some relaxation
to Mr Vines on some contention on which the lower court had held guilty.
Now lastly I will discuss about the effects of the decision on the companies of Australia.
The Australian Companies got an alert from this decision and therefore the huge change
has come in the working culture of the company. The Companies had started training
programs and implemented the ethical programs or thee governance policies. It becomes
necessary for the companies to involve in the activities that cannot create these
circumstances such as breach of the laws of the Corporations Act. The Australian
Companies had implemented many policies to improve the working culture in the
company so that they must work with care and diligence. The companies had made their

minimum standard policies in which directors of the companies will not limited to their
strengths but they should had to do more than merely to their expertise. The other policies
that the directors must time to time check he daily affairs of the company. The
environment between the directors and the management must be familiar. The policies
suggest that the lack of ability cannot be the excuse of the directors. The Companies must
ensure that they can get the regular attendance in the Board Meetings. The directors must
be familiarizing with the company’s financial position that will make it easy for them to
review. The Decision impact can be said to be successful as it can be concluded that
sometimes it becomes necessary to penalize someone so that the activities cannot been
repeated and others can also take lesson and make an improvement in their policies. Due
to this case in Australia, there had been rise in the standards of the company’s governance
policies. The government had also put the heavy penalties if the directors of the
companies found to be in any breach of these policies. this case had its own importance in
the development of the Corporations law.
I can end this video by concluding from the case that the Director duties had been
breached and it can be said from the decision of the Court of Appeal that the Mr Vines
had breached his duties. The decision of the Case was the leading judgement of the
breach of the Section 180(1) of the Corporations Act. It can be concluded from the
different policies of the companies the major changes had been came in the governance
policies in the companies to improve their working culture in the company. This case put
an example that the laws have their own importance, it had made to secure the companies
from doing wrongful acts, and if someone found in the breach of these laws will be
punished.