ASIC v Edwards [2004] NSWSC 1044

ASIC v Edwards [2004] NSWSC 1044

The court refused to accept the proffered undertaking because an undertaking to the court operates in lieu of an injunction and should not be accepted unless the court could make an order to the same effect. The court had no power under the Corporations Act 2001 (Cth) or any established equitable jurisdiction to order the first defendant generally not to be a director or secretary or not to participate in corporate management; a disqualification order would only bring the person within the statutory offence regime in s.206A rather than itself restrain conduct.

Jurisdiction
Australia
Judgment Date
09 November 2004
Procedural Posture
Corporations Proceeding by ASIC Seeking a Declaration of Contravention and Disqualification Order / Compromise Proposed by Undertaking to the Court and Consent Costs Order
Outcome
Undertaking proffered to the court not accepted.
Legal Topics
['director Disqualification' 'insolvent Trading' 'declarations of Contravention' 'undertakings to the Court' 'asic Enforcement Proceedings']
['corporations Law' 'equity'] ['director Disqualification' 'insolvent Trading' 'declarations of Contravention' 'undertakings to the Court' 'asic Enforcement Proceedings']

Case Brief

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Procedural Posture

Corporations Proceeding by ASIC Seeking a Declaration of Contravention and Disqualification Order / Compromise Proposed by Undertaking to the Court and Consent Costs Order

Legal Issues

  1. 1 ['Whether the court should accept an undertaking by the first defendant not to be a director or secretary of any corporation or participate in management of corporations for a stated period where the court has no power to make an order in like terms.' 'Whether principles applicable to consent declarations of contravention under s.1317E directly apply to a compromise involving an undertaking to the court rather than the exercise of statutory jurisdiction.']

Ratio Decidendi

The court refused to accept the proffered undertaking because an undertaking to the court operates in lieu of an injunction and should not be accepted unless the court could make an order to the same effect. The court had no power under the Corporations Act 2001 (Cth) or any established equitable jurisdiction to order the first defendant generally not to be a director or secretary or not to participate in corporate management; a disqualification order would only bring the person within the statutory offence regime in s.206A rather than itself restrain conduct.

Court Disposition

Undertaking proffered to the court not accepted.

Orders

  • ['Proceedings to stand over for further mention at an appropriate time.']