Case Study Analysis: Business and Company Law - Babybelle Pty Ltd

This document presents a case study analysis of Babybelle Pty Ltd, focusing on business and company law. The case revolves around Mr. Schwartz, a director of the company, and his alleged breaches of director's duties under the Corporations Act. The analysis examines the legal issues arising from the appointment of a new director and the registration of the company's office address. The Federal Court of Australia found Mr. Schwartz guilty of breaching his duties, resulting in a fine. The judgment relied on relevant sections of the Corporations Act and referenced previous cases. The document outlines the relevant facts, legal issues, the laws applied by the judge, the court's decision, and the penalties imposed. It also includes references to supporting legal literature and cases. This analysis provides a comprehensive overview of the case, highlighting key aspects of business and company law, specifically director's responsibilities and compliance with the Corporations Act.

Running head: BUSINESS AND COMPANY LAW
Business and Company Law
Name of the Student
Name of the University
Author Note

1BUSINESS AND COMPANY LAW
Schwartz: In the matter of Babybelle Pty Ltd (ACN 116 052 683) [2007] FCA 1469
(September 2007)
a. The relevant facts of the case:
The fact of the mentioned case is the plaintiff Mr. Schwartz is owned the company Babybelle Pty
Ltd and he is the part of the board of directors and also holds the share in the company. He had
also appointed another director for the company1. It was found that he has been sought for a
leave for appointing that new director for the company. However, the Australian Securities and
Investments Commission (“ASIC”) claimed that Mr. Schwartz has not maintained his duty as a
director of Babybelle Pty Ltd and alleged him.2
b. The major legal issues
According to the case study, it has been found that Mr. Schwartz has been made several mistakes
as the director of the company. The legal issues has been arises when he has appointed the new
director for the company which is not appointed according to the terms of the company3.
Therefore it has been found that he has been breach the duty of the directors according to the
Corporation Act4. He appointed Mr. Goodman as the new director of the company who also hold
the share of the company. A legal issue has been arises when the court has been found that the
office address has been registered at O’Loughlin Street, Ormond until 1 March 2007 but later it
was discovered that the address has been moved or transferred at the home address of Mr.
1 du Plessis, Jean Jacques, and Jeanne Nel De Koker, eds. Disqualification of Company Directors: A Comparative
Analysis of the Law in the UK, Australia, South Africa, the Us and Germany. Taylor & Francis, 2017.
2 Coffee Jr, John C., Hillary Sale, and M. Todd Henderson. "Securities regulation: Cases and materials." (2015).
3 du Plessis, Jean Jacques, and Jeanne Nel De Koker, eds. Disqualification of Company Directors: A Comparative
Analysis of the Law in the UK, Australia, South Africa, the Us and Germany. Taylor & Francis, 2017.
4 Hiller, Janine S. "The benefit corporation and corporate social responsibility." Journal of Business Ethics 118.2
(2013): 287-301.

2BUSINESS AND COMPANY LAW
Schwartz5. He is one of the director and as a director of the duty and services toward the office
administration and contract services like heated towel rails, spa pools and various sports
equipments. However the Australian Securities and Investments Commissions define that he has
committed the offence contravened of under sec- 206A of Corporation Act. Here the offence has
been occurring under Sec- 206G of Corporation Act 2001(Cth)6.
c. The relevant law relied on by the judge(s) in making their decision
The Federal Court of Australia has mentioned that Mr. Schwartz has been breach the duty of the
director by disqualified the acts of hypothesis for dishonesty offences towards the company7.
According to sec- 206A (1) Corporation Act the court has been taken the supportive judgments
from Adams v Australian Securities and Investments Commission (2003)8 where a person
who also holds the position of the director has been disqualified for the breach of the duty toward
the company9.
In this case, the new director of the company has failed to control the business and dissatisfy
the terms of the 206A (1) and 206G of Corporation Act. Mr. Schwartz was also appealed to the
court but it not allowed him due the finding of the case10. In the hearing of the case
5 Coffee Jr, John C., Hillary Sale, and M. Todd Henderson. "Securities regulation: Cases and materials." (2015).
6 Hiller, Janine S. "The benefit corporation and corporate social responsibility." Journal of Business Ethics 118.2
(2013): 287-301.
7 Coffee Jr, John C., Hillary Sale, and M. Todd Henderson. "Securities regulation: Cases and materials." (2015).
8 Adams v Australian Securities and Investments Commission (2003) 46 ACSR 68
9 du Plessis, Jean Jacques, and Jeanne Nel De Koker, eds. Disqualification of Company Directors: A Comparative
Analysis of the Law in the UK, Australia, South Africa, the Us and Germany. Taylor & Francis, 2017.
10 Coffee Jr, John C., Hillary Sale, and M. Todd Henderson. "Securities regulation: Cases and materials." (2015).

3BUSINESS AND COMPANY LAW
d. The actual decision of the case
According to the case study of it can be concluded that the application which has been Mr.
Schwartz appealed for defense has rejected by the court due to the invalid application.
However he was charged by the Federal Court and found guilty under the Sec- 206A (1) and
Sec- 206G of Corporation Act Cth)11. The Honourable court has been fined him with the
$13,578.94. He also charged with namely contravention of s 1350 of the Social Security Act
1991 (Cth), two contraventions of s 215 of the Social Security (Administration) Act 1999
(Cth) and two contraventions of s 135.2 of the Criminal Code Act 1995 (Cth)12.
11 Hiller, Janine S. "The benefit corporation and corporate social responsibility." Journal of Business Ethics 118.2
(2013): 287-301.
12 du Plessis, Jean Jacques, and Jeanne Nel De Koker, eds. Disqualification of Company Directors: A Comparative
Analysis of the Law in the UK, Australia, South Africa, the Us and Germany. Taylor & Francis, 2017.

4BUSINESS AND COMPANY LAW
Reference
Adams v Australian Securities and Investments Commission (2003) 46 ACSR 68
Coffee Jr, John C., Hillary Sale, and M. Todd Henderson. "Securities regulation: Cases and
materials." (2015).
du Plessis, Jean Jacques, and Jeanne Nel De Koker, eds. Disqualification of Company Directors:
A Comparative Analysis of the Law in the UK, Australia, South Africa, the Us and Germany.
Taylor & Francis, 2017.
Hiller, Janine S. "The benefit corporation and corporate social responsibility." Journal of
Business Ethics 118.2 (2013): 287-301.
Schwartz: In the matter of Babybelle Pty Ltd (ACN 116 052 683) [2007] FCA 1469
(September 2007)