ASIC v Rich & Ors [2004] NSWSC 836

ASIC v Rich & Ors [2004] NSWSC 836

The third defendant contravened s 180(1) of the Corporations Law by failing, as non-executive chairman, to take reasonable steps to ensure material financial information was provided to the Board, monitor management, and recommend appropriate action. The evidence and the defendant's admissions established breaches, justifying declarations under s 1317E, a compensation order of $20 million, and a disqualification for four years.

Jurisdiction
Australia
Judgment Date
09 September 2004
Procedural Posture
Civil / Judgment on Application for Declarations, Disqualification, Compensation and Costs (consent Orders)
Outcome
Declarations of contravention made; compensation and disqualification orders granted by consent; costs ordered; terms of some declarations stood over for possible revision.
Legal Topics
["director's Duties" 'duty of Care and Diligence' 'disqualification of Directors' 'compensation Orders' 'declarations of Contravention']
['corporations Law'] ["director's Duties" 'duty of Care and Diligence' 'disqualification of Directors' 'compensation Orders' 'declarations of Contravention']

Case Brief

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Procedural Posture

Civil / Judgment on Application for Declarations, Disqualification, Compensation and Costs (consent Orders)

Legal Issues

  1. 1 ['Whether the third defendant, as non-executive chairman, contravened s 180(1) of the Corporations Law by failing to exercise reasonable care and diligence.' 'Appropriate specificity of declarations under s 1317E and the operation of s 1317F of the Corporations Act.' 'Whether the orders for disqualification and compensation by consent are appropriate in the circumstances.']

Ratio Decidendi

The third defendant contravened s 180(1) of the Corporations Law by failing, as non-executive chairman, to take reasonable steps to ensure material financial information was provided to the Board, monitor management, and recommend appropriate action. The evidence and the defendant's admissions established breaches, justifying declarations under s 1317E, a compensation order of $20 million, and a disqualification for four years.

Court Disposition

Declarations of contravention made; compensation and disqualification orders granted by consent; costs ordered; terms of some declarations stood over for possible revision.

Orders

  • ['Declarations made in accordance with paragraphs 1(d), 2, 3 and 4 and orders in paragraphs 5, 6, and 7 of Schedule B to the Enforceable Undertaking.' 'Disqualification of the third defendant from managing corporations for four years.' 'Compensation order that the third defendant pay $20 million to One.Tel Limited...