disqualification Flashcards
2 types of DQ
discretionary & mandatory
DQ order
s 1(1) CDDA
Re Cannonquest
cannot participate in the promotion of a new company during DQ period
Rv Campbell
cannot be concerned/take part in co’s management via acting in some other capacity
discretionary
ss 2-4
mandatory
s 6: insolvency & unfitness
Re Grayan
once unfitness established, mandatory DQ kicks in. Doesnt matter how contrite D is, court shall have no regard to D’s reform
Re Lo-Line
ordinary commercial misjudgment insufficient eg lack of commercial probity, gross negli, total incompetence
Re Dawson
courts take a subjective view, on a case-by-case basis
otf, D used crown debts to finance co operations
Sullman
breach of duty not required, broad-conduct based approach. unfitness can be demonstrated by conduct w/o breach
TC Stephenson
merely being signatory to co’s cheques doesnt make D liable. DQ order dismissed.
difference between WT & FT
WT = recklessness, FT = intention to defraud
Welham v DPP
actual dishonesty
Re Patrick
real dishonesty
Re Augustus Barnett
comfort letters from parent co to sub = sign of honesty rather than fraud. claim failed.
FT hard to prove
Re William C Leitch
if co cont trading & incurring debts at a time where D know there is no reasonable prospect of repaying creditors = intent to defraud
standard of skill expected for WT
Re Continental Assurance
intelligent layman
lack of basic financial & accounting knowledge = no defence
ASIC v Healey, RE DKG
not playing an active part in management = no defence
RE Brian Pierson
no such thing as sleeping Ds
defence
s 214(3)
Robin v Gunner
increasing company’s indebtedness; courts take a dim view on this
Absence of professional advice no defence
Re Brian D Pierson
Re Purpoint
resigning from board & seeking opportunities elsewhere is not acceptable course of action
