Legal Analysis: ASIC v Cassimatis under the Corporation Act 2001

This case study analyzes ASIC v Cassimatis, focusing on breaches of duty by the directors of Storm Financial Services under the Corporation Act 2001. The assignment addresses the capacity of the corporation, triggers for litigation, sought remedies, and the court's outcome, including penalties and director suspensions. It explores whether the case could have been avoided, contrasts the legal treatment of corporations versus natural persons, and discusses the medium and long-term consequences. The analysis highlights the importance of directors fulfilling their responsibilities to maximize shareholder benefits and avoid legal repercussions, referencing relevant legal principles and scholarly sources. The study emphasizes the application of the risk-benefit test and the implications of breaching corporate law, providing a comprehensive overview of the case's legal and practical significance.

RUNNING HEAD: CORPORATION ACT
Corporation Act
Name of the student
Name of the university
Author Note

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Response to question (i):
In what capacity was the corporation involved?
In the case of ASIC v Cassimatis was the director of Storm financial services in the country of
Australia accused by the commission breaching the duties. The director of the financial
department of Cassimatis has not performed the responsibilities and the duties of the financial
organisation. Under the provisions of the Corporation Act 2001 the director of the finance
department of the company is found to be guilty or responsible for violation of any duties and
responsibilities for the company. It is a basic duty of the director to observe the consequences
that are catastrophic in the company.
Response to question (ii):
What were the triggers and circumstances that led to the litigation?
Cassimaties has violated to perform the responsibilities and the duties and has performed a
breach of duty towards the financial company Storm for which the company had suffered from a
massive loss in that particular financial year. Cassiamties has not performed any type of decision
making task thinking about the maximising the benefit of the shareholders. As a result the
company was charged under the provisions of the breach of duty.
Response to question (iii):
What remedies were being sought?
Both the directors of the company was held liable and was suspended for managing any of the
corporations and for performing breach of duty under section 180(1) of the Corporation Act

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2001. The court has also imposed a pecuniary penalty for the particular case. These are the actual
remedies sought for the guilt performed by the directors of the Cassimatis.
Response to question no (iv):
What was the outcome?
The Court held that Storm had breached the law by providing inappropriate advice regarding
investment. Justice had said there is a doubt that the corporation’s actual breach is required for
proving the director’s breach of duty. It is important to keep in mind as it is suggested a
company’s contravening intention that serves as a good indicator for the directors breaching their
duty. In this case the Court elaborated the three elements by applying the risk-benefit test
contravening the law of the company.
Response to question (v):
Could the case have been avoided?
The case could not be avoided, as there was a breach of duty by the director of the company
under section 180(1) of the Corporation Act 2001. The directors have avoided performing the
responsibilities and the duties for maximising the profit of the shareholders and for the benefit of
the company.

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Response to question (vi):
Were there any aspects of the case which may have been dealt with differently if, instead of
being a corporation, the party was a natural person? What do you think the medium and long
term consequences of the case may be, either generally or to the individual corporation(s)
specifically involved?
Instead of the corporation if a natural person would have been involved that particular person
would have been held criminally liable and should have been charged according to the Indian
Penal Code. As this is a corporation this has been charged under the provision of the Corporation
Act 2001.
The medium and the long term consequences of this case is that they should not carry a
corporation like neglecting the duties and the responsibilities of the corporation. There should be
directors following the proper rules and responsibilities which will maximize the benefit of the
company as well as the shareholders.

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Reference:
Du Plessis, J.J., Hargovan, A. and Harris, J., 2018. Principles of contemporary corporate
governance. Cambridge University Press.
Bottomley, S., 2016. The constitutional corporation: Rethinking corporate governance.
Routledge.
Ferran, E. and Ho, L.C., 2014. Principles of corporate finance law. Oxford University Press.

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