Australian Securities and Investments Commission v Cassimatis (No 8) [2016] FCA 1023

Australian Securities and Investments Commission v Cassimatis (No 8) [2016] FCA 1023

Directors who had extensive control and knowledge over their company (Storm) contravened s 180(1) of the Corporations Act by exercising their powers so as to cause or permit the company to provide inappropriate financial advice to vulnerable clients, when a reasonable director with their knowledge and...

Source-derived case information.

Parties
Applicant: Australian Securities and Investments Commission; First Respondent: Emmanuel George Cassimatis; Second Respondent: Julie Gladys Cassimatis
Jurisdiction
Australia
Judgment Date
26 August 2016
Procedural Posture
Civil Penalty Proceeding / Liability Trial (remedies Deferred)
Outcome
Liability established in part for ASIC (civil contravention); respondents' defence under s 1317S dismissed; remedies to be addressed in a separate hearing.
Legal Topics
Directors' Duties (s 180), Personal Advice and Appropriate Advice (s 945 A), Liability of Directors for Company Contraventions, Retail Client Protections, Relief From Liability (s 1317 S)
Corporations Law Financial Services and Securities Regulation Directors' Duties (s 180) Personal Advice and Appropriate Advice (s 945 A) Liability of Directors for Company Contraventions Retail Client Protections Relief From Liability (s 1317 S)

Source-derived case record

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 5 Authorities cited 12 Party arguments 2 Amounts and remedies 5
Sign in to unlock

Parties

Australian Securities and Investments Commission

Applicant

Emmanuel George Cassimatis

First Respondent

Julie Gladys Cassimatis

Second Respondent

Procedural Posture

Civil Penalty Proceeding / Liability Trial (remedies Deferred)

Legal Issues

  1. 1 Whether directors (as sole shareholders) can contravene s 180(1) of the Corporations Act 2001 (Cth) by causing or permitting a solvent company to give inappropriate financial advice to vulnerable clients
  2. 2 Whether Storm contravened s 945A(1)(b) and s 945A(1)(c) of the Corporations Act and whether such breaches were reasonably foreseeable to its directors
  3. 3 Whether advice given was appropriate to certain retail clients and whether sufficient consideration/investigation was undertaken

Ratio Decidendi

Directors who had extensive control and knowledge over their company (Storm) contravened s 180(1) of the Corporations Act by exercising their powers so as to cause or permit the company to provide inappropriate financial advice to vulnerable clients, when a reasonable director with their knowledge and responsibilities would have foreseen the likelihood of such contraventions and would have taken reasonable steps to prevent them. The breaches were serious and significant enough, in the context of the directors' roles and the catastrophic consequences for the company, that relief from liability under s 1317S was denied, notwithstanding honesty and absence of concealment.

Court Disposition

Liability established in part for ASIC (civil contravention); respondents' defence under s 1317S dismissed; remedies to be addressed in a separate hearing.

Orders

  • The matter be listed for directions for a hearing on penalties and other relief.