ASIC V. Rich 2009: NSWSC 1229
comparative Essay
1000 words
ASIC v. Rich [2009] NSWSC 1229- Case Analysis Background One.Tel was an Australia based GSM service provider meaning it functioned mainly in the telecom sector and eventually grew to become Australia’s fourth largest telecom service provider before being shrouded in controversy which lead to its eventual downfall. Jodee Rich and other executive directors of the company faced accusations of not discharging their duties as directors effectively with respect to the duty of care they had towards the best interests of the company. This duty is mandated by Section 180 of the Corporations Act, 2001 as well as principles of common law. Application Corporations functioning within the jurisdiction of the Australian Commonwealth are governed and regulated by the provisions of the Corporations Act, 2001. Common law principles developed through judicial …show more content…
This decision was made in good faith and cannot be conspicuously construed to have self-interests veiled in them. Further, the executive directors made an informed decision to refrain from passing this information to the board and they did believe that this would be in the best interests of the company as disclosure would have brought an end to the company’s existence much before the actual downfall. Thus this judgment met all the requisites prescribed under the provisions of Section 180 (2) of the Corporations Act, 2001 (Rawhouser, Cummings and Crane 2015). This case was the first to comprehensively lay down the business judgment defense and apply it to the facts and circumstances of a case. This defense would negate the apparent breach of the duties of the directors as prescribed by the statute and under common
In this essay, the author
- Explains that tel was an australia based gsm service provider that grew to become australia’s fourth largest telecom provider before being shrouded in controversy which led to its eventual downfall. rich and other executive directors faced accusations of not discharging their duties effectively.
- Explains that corporations functioning within the jurisdiction of the australian commonwealth are governed and regulated by the corporations act, 2001.
- Explains that a business judgment is an action taken by the administration of the company and applies only in business decisions that are materially relevant to the corporation's operations.
- Explains that tel was an australia based gsm service provider that grew to become australia’s fourth largest telecom provider before being shrouded in controversy which led to its eventual downfall. rich and other executive directors faced accusations of not discharging their duties effectively.
- Explains that corporations functioning within the jurisdiction of the australian commonwealth are governed and regulated by the corporations act, 2001.
- Explains that a business judgment is an action taken by the administration of the company and applies only in business decisions that are materially relevant to the corporation's operations.
- Explains that asic's accusation was that the directors had failed to observe their duties under section 180 (1) of the act by not sufficiently informing the board of one.tel about the accurate financial stand.
- Explains that the executive directors' decision to not inform the board of the company's accurate financial position was a business judgment, which was made in good faith and could not be conspicuously construed as having self-interests.
- Concludes that when directors of a corporation are in breach of their duties under common law and the provisions of section 180 (1) of the corporations act, 2001 the business judgment defense can be cited.
- Describes s' publications on corporate tax law: structure, policy and practice.
- Explains morley, cummings, crane, and peden, e., 2017. civil and criminal liability of directors and officers of sporting clubs.
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