ASIC V. Rich 2009: NSWSC 1229

1000 Words2 Pages
bulb-icon

Recommended: ethical behavior

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

Show More
Related

  • Australian Constitution Research Paper

    246 Words  | 1 Pages

    The Australian constitution is a national legal document, enacted by the British government on the 1st of January 1901 as a part of Australia’s federation, it can be very difficult to change yet it requires constant renewal to keep up to date with today's society. As the Australian states and territories have the ability to create their own laws, the Constitution is employed to regulate them. Any state or territory law that is viewed to be in direct defiance of the constitution can be repealed and then is reviewed and examined via the High Court of Australia. If the High Court rules that the state's law is unconstitutional it will then be voided. Due to the fact, the constitution overlooks all the laws carried out by the Australian states and

    Read More

  • Aboriginal Customary Laws and Australian Contemporary Laws

    595 Words  | 2 Pages

    The roots of Australian laws are similar to traditional Aboriginal laws, dating back to before the Norman Conquest in 1066, where each separate village had their own laws developed to their own customs. This changed however, after a centralized legal system was established after 1066. A common law was formed, that applied to all of England. This was later combined with equity law and mercantile law, which is the basis of Australian law today, known as ‘statute law’.

    Read More

  • Human Rights In Australia Essay

    933 Words  | 2 Pages

    Established by the enactment of the Commonwealth of Australia Constitution Act 1900 on 1 January 1901, the Australian Constitution institutes the key functions of the executive, the legislature and the judiciary. Furthermore, Federation provided state and federal governments with specific powers to enact laws relating to trade, defence and immigration, and to promote nationalism. However, the privileged men responsible for Federation used the process of conventions to promote their biased views towards working class individuals and focused mainly on protecting their own interests; as a result the constitution does not explicitly include human rights protections. During federation, the appointed convention delegates of each British colony displayed

    Read More

  • What Prest v Petrodel Resources Lt Tells About the Separate Legal Entity Doctrine

    1571 Words  | 4 Pages

    ...the corporate veil, which is reflected in the current Australian approach. While it is clear Prest is not binding on Australian courts, this case will be useful in Australia to provide further insight into the many cases in which the piercing principle has been relevant, and may provide a clearer doctrine as to when the corporate veil may be pierced. It has been suggested that if legislation was enacted to pierce the corporate veil this would overcome the current vagueness of the veil piercing doctrine in Australia. However, as cautioned in Prest, the clarity gained may only serve to narrow the courts ability to use the piercing principle to combat abuse of the separate legal entity doctrine, in ways that the law cannot otherwise remedy. As such it appears to be as necessary a part of corporate law, as it goes hand in hand with the separate legal entity doctrine.

    Read More

  • The Albazero Case Study

    892 Words  | 2 Pages

    According to Corporation Act 2001 s124(1), it illustrates that ‘’A company has the legal capacity and powers of an individual both in and outside the jurisdiction” . As it were, company as a legal individual must be freely with all its capital contribution shall embrace liability for its legal actions and obligations of the company’s shareholders is limited to its investment to the company. This ‘separate legal entity’ principle was established in the case of Salomon v Salomon & Co Ltd [1987] as company was held to have conducted the business as a legal person and separate from its members. It demonstrated that the debt of company is belonged to the company but not to the shareholders. Shareholders have only right to participate in managing but not in sharing the company property. Besides ,the Macaura v Northern Assurance Co Ltd [1925] demonstrates that the distinction between the shareholders and company assets. It means that even Mr Macaura owned almost all the shares in the company, he had no insurable interest in the company’s asset. The other recent case is the Lee v Lee’s Air Farming Ltd [1961] which illustrates that the distinct legal entities between employee ad director allows Mr.Lee function in dual capacities. It resulted that the corporation can contract with the controlling member of the corporation.

    Read More

  • Business Law Case Summary

    1571 Words  | 4 Pages

    his decision concerns an application for permission to appeal against a decision 1 of Senior Deputy President Richards handed down on 7 May 2015 (Decision). The Decision concerned an unfair dismissal application made by Ms Elizabeth Atkinson on 12 January 2015 under s.394 of the Fair Work Act 2009 (the Act) in relation to the termination of her employment by L.R.G catering Pty. Ltd T/A Marine Provisioning Australia (Respondent).

    Read More

  • The Concept of the Corporate Veil

    1974 Words  | 4 Pages

    The ‘unyielding rock’ of corporation law, as established and relied upon in Salomon v A Salomon & Co Ltd, is the concept of the separate juristic personality of a corporation. Out of this century-old principle, the legal structure of modern business was born. The foundation of corporation law thus rests on the concept that a company has a separate legal personality which is recognised in the Companies Act 71 of 2008 (“the Act’).

    Read More

  • Onetel Case Study

    1655 Words  | 4 Pages

    One.Tel was launched by Jodee Rich and Brad Keeling in 1995 (Cook, 2001). At first, it looked to get the advantages from deregulation of telecommunication industry by reselling other network’s capacity and making money through stock market speculation. Rich and Keeling tried to increase the company’s shares rather than to profit the company (Cook, 2001). Initially, One.Tel used to develop the culture of strong teamwork and togetherness. There was no hierarchy in the structure of the company. However, the dissonance of its culture and system is the main factor that led to One Tel decline.

    Read More

  • Canadian Legal System Analysis

    1265 Words  | 3 Pages

    This will be the judgment against interference of the cases which are before the court. The information leaked to the public by the media could be a vital information that would endanger jury or may not limit the fair judgment.

    Read More

  • The Distinction Between an Unfair Prejudice Petition and a Statutory Derivative Action

    1316 Words  | 3 Pages

    This essay will examine the main cause of the demise of the derivative claim which is the possibility of pursuing a corporate relief and even costs via an unfair prejudice petition, a relief and order that was initially only available via derivative action. Further this essay will discuss as to how the boundaries between the statutory derivative action and the unfair prejudice should be drawn and what restrictions should be added to the unfair prejudice remedy under section 994 of the Companies Act 2006 so that the significance of the statutory derivative action can be reinstated.

    Read More

  • Fraud In The Case Of Foss V. Harbottle

    965 Words  | 2 Pages

    In the case of Foss v Harbottle (1843) contains of two members from the company named Victoria Park Co and they brought up an action against the five director from the company and also the shareholders by pointing out several action that they took to defraud the company such as selling land at a higher price. According to the case, instead of the claimant, it is the board of director’s responsibility to held a general meeting to make claim in this instance. Jenkins LJ from the case of

    Read More

  • XYZ Construction, Inc. and Asian Business Expansion

    994 Words  | 2 Pages

    Australia, Singapore, and India all have corporate governance regulatory systems that are based on corporation legislation that presents for mandatory minimum standards dealing with matters such as directors' duties, members' remedies, and shareholder rights at meetings, and default rules for company foundations. These obligatory rules may be compulsory by civil actions brought by injured parties and criminal proceedings brought by the respective regulators. These minimum obligatory requirements cannot successfully deal with issues relating to matters such as board role, structure, and make up. These purposeful matters are dealt with by codes of globally documented corporate governance best practice sanctioned by a variety of stock exchanges and directed at listed companies. This comprises an appearance of self-regulation because it is not compulsory for companies to follow the best practice principles. The universal approach is to necessitate listed companies to reveal in their annual reports the corporate governance practices they have agreed to throughout the relevant year. The listing rules set out comprehensive endorsed practices, and companies are required to state the degree to which they have taken on these practices. Those companies that go away from the suggested practices are required to make clear why they have done so (Kimber & Lipton, 2005).

    Read More

  • The Australian Constitution And The Use Of Convention

    1408 Words  | 3 Pages

    The Constitution of Australia is a written document, which came into effect when the six colonies federated to form the Commonwealth of Australia in 1901. It consists of eight chapters and 128 sections and lays down a set of laws or restraints by which the Federal Government must operate. It establishes the composition, procedures, functions, and powers of government, government authorities, such as the Governor General and other essential institutions. The Constitution is the basic framework for a civilised and well-governed Australia. However in the recent past, reason for parliamentary and federal concern has been thrust into the limelight. In addition, there has been a growing need for judicial interpretation and the ever-present reliance on convention.

    Read More

  • MANDATORY ROTATION OF AUDITORS

    2297 Words  | 5 Pages

    Professor Ian Ramsay, ‘Independence of Australian Company Auditors, Review of the Current Australian Requirements and Proposals for Reform – Report to the Minister for Financial Services and Regulation’, Canberra, October 2001.

    Read More

  • The Australian Constitution

    1657 Words  | 4 Pages

    Robert, Sir G 2000, Commentaries on the constitution of the commonwealth of australia, Angus and Robertson, Sydney; Melbourne; London, pp. 1-1,137

    Read More

More about ASIC V. Rich 2009: NSWSC 1229

Open Document