Corporate & Commercial Fortnightly Update – 11 September 2013

September, 2013

In the media

ASIC surveillance targets illegal phoenix activity

ASIC are targeting company directors with a history of failed companies as part of a surveillance program to combat illegal phoenix activity. ASIC action to combat phoenix activities includes removing directors who have been involved in two or more failed companies from the industry (10 September 2013)

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Trade deal branded ‘rule for the corporation by the corporation’

Companies could gain the right to challenge laws that threaten their ability to make future profits under a planned giant trade agreement spanning the Pacific and taking in Australia, according to a leading scholar (03 September 2013)

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Global Network of Director Institutes issues perspective on Integrated Reporting

A global network of director institutes has today released a paper supporting improvements to the way organisations report to their shareholders and other stakeholders, including in ways guided by the International Integrated Reporting Framework (29 August 2013)

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Published – articles, papers, reports

ASIC Market supervision update, Issue 37, August 2013

Author: ASIC – The update includes: Suspicious activity reporting – ASIC Update; Updates to market supervision cost recovery arrangements, New rules on dark liquidity and high-frequency trading. Report into hybrid securities, Markets Disciplinary Panel (28 August 2013)

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High Court rules on mistakes in corporate governance

Author: Matt Couper and Michael Elliott, KGC, 02 September 2013 – Appointment of director had taken place in contravention of company’s articles of association Director’s appointment can be validated despite the fact that the director who appointed her had not been properly appointed as a director himself at the time. The Court takes approach to not punish inadvertent mistakes that don’t have significant consequences

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Bodycorp Repairers Pty Ltd v Maisano (No 8) [2013] VSC 472

CONTRACT – breach – repudiation – franchise agreement – whether termination unlawful – whether breach by franchisor of essential term – willingness to perform only in manner substantially inconsistent with obligations

CONTRACT – breach – unreasonable restraint of trade

RESTITUTION – claim for work and labour done – flawed method of proving any loss suffered

TORT – inducement of breach of contract – attempt to establish case by inference

PRACTICE AND PROCEDURE – application to amend pleadings during trial – leave granted – date from which amendment to take effect – whether new and distinct cause of action – relation back effect of order.

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George Christopher Harris v Sophia Rothery (as co-executor of the Estate of the Late Christopher George Harris) [2013] NSWSC 1275

TRUSTS AND TRUSTEES – Principles of construction of trust deed and notices under deed – Whether father’s appointment of adult son as appointer and protector effective TRUSTS AND TRUSTEES – Office of appointer and protector – Whether power to appoint successor fiduciary or personal EQUITY – General principles – Undue influence – Whether applicable to appointment to an office under a trust deed

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BigTinCan Pty Ltd v Ramsay [2013] NSWSC 1248

EQUITY – breach of fiduciary duties owed to a company by a director – knowing assistance in a dishonest and fraudulent breach of fiduciary duty – test of causation for breach of fiduciary duty – equitable compensation for a lost opportunity – CORPORATE LAW – breach of Corporations Act 2001 (Cth) s 181

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Re Krypton Nominees Pty Ltd [2013] VSC 446

CORPORATIONS – Sale of shares – Misleading and deceptive conduct – Whether plaintiff relied on misrepresentations – Judgment for plaintiff – Corporations Act 2001 ss 1041E, 1041H and 1345.

CORPORATIONS – Sale of shares – Failure to provide Product Disclosure Statement – Whether plaintiff a “sophisticated investor – Sale of shares on terms – Whether total amounts payable satisfied exemption in s 708(8)(a) – Corporations Act 2001 ss 50AA, 707 and 708(8)(a).

CORPORATIONS – Whether the defendants conduct was unconscionable within the meaning of the unwritten law – Whether the plaintiff was at a special disadvantage – Claim rejected –ASIC Act 2001 s 12CA.

AGENCY – Contract for purchase of shares made by a company in a group of companies pending nomination of a member of that group by group’s accountant as the appropriate purchasing company – Contract negotiated by director who controlled group of companies – Whether company nominated by the accountant entitled to ratify contract of sale and become the purchaser – Whether nominated company entitled to rely on representations made to the director who negotiated the contract in seeking to have contract of purchase set aside for misleading and deceptive conduct and failure to provide a Product Disclosure Statement – Nominated company entitled to ratify contract and exercises remedies available to initial contracting company.

EQUITY – Whether the defendants owed a fiduciary duty to the plaintiff – Relevant applicable principles – Whether inequality of bargaining power – Claim rejected.

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