Australian Securities and Investments Commission v Vocation Limited (In Liquidation) (No 2) [2019] FCA 1783

Australian Securities and Investments Commission v Vocation Limited (In Liquidation) (No 2) [2019] FCA 1783

The individual defendants breached s 180(1) of the Corporations Act by failing to exercise due care and diligence in relation to continuous disclosure obligations and representations made to the market and an underwriter. Their contraventions, while not dishonest or for personal gain, were serious and warranted significant periods of disqualification and pecuniary penalties, taking account of mitigating factors and principles of parity and totality. Relief under ss 1317S and 1318 for Mr Dawkins was refused as the seriousness of his contravention, among other factors, outweighed mitigating circumstances.

Parties
Plaintiff: Australian Securities and Investments Commission; First Defendant: Vocation Limited (In Liquidation); Second Defendant: Mark Edward Hutchinson; Third Defendant: John Sydney Dawkins; Fourth Defendant: Manvinder Gréwal
Jurisdiction
Australia
Judgment Date
01 November 2019
Procedural Posture
Corporations/regulatory Civil Penalty Proceeding / Penalty and Declaratory Judgment; Orders and Costs
Outcome
Declaratory relief granted; Defendants disqualified from managing corporations and ordered to pay pecuniary penalties and a proportion of ASIC's costs. Relief under s 1317S/1318 declined for Mr Dawkins.
Legal Topics
Directors' Duties, Continuous Disclosure, Misleading or Deceptive Conduct, Disqualification From Managing Corporations, Civil Penalties
Corporations Law Commercial Law Directors' Duties Continuous Disclosure Misleading or Deceptive Conduct Disqualification From Managing Corporations Civil Penalties

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Parties

Australian Securities and Investments Commission

Plaintiff

Vocation Limited (In Liquidation)

First Defendant

Mark Edward Hutchinson

Second Defendant

John Sydney Dawkins

Third Defendant

Manvinder Gréwal

Fourth Defendant

Procedural Posture

Corporations/regulatory Civil Penalty Proceeding / Penalty and Declaratory Judgment; Orders and Costs

Legal Issues

  1. 1 Whether Mr Dawkins should be relieved under s 1317S and s 1318 of the Corporations Act
  2. 2 What disqualification orders and pecuniary penalties should be imposed on Mr Hutchinson, Mr Dawkins, and Mr Gréwal
  3. 3 Whether relief under the 'excuse provisions' should be granted to Mr Dawkins

Ratio Decidendi

The individual defendants breached s 180(1) of the Corporations Act by failing to exercise due care and diligence in relation to continuous disclosure obligations and representations made to the market and an underwriter. Their contraventions, while not dishonest or for personal gain, were serious and warranted significant periods of disqualification and pecuniary penalties, taking account of mitigating factors and principles of parity and totality. Relief under ss 1317S and 1318 for Mr Dawkins was refused as the seriousness of his contravention, among other factors, outweighed mitigating circumstances.

Court Disposition

Declaratory relief granted; Defendants disqualified from managing corporations and ordered to pay pecuniary penalties and a proportion of ASIC's costs. Relief under s 1317S/1318 declined for Mr Dawkins.

Orders

  • Hutchinson disqualified from managing corporations for six years and to pay a pecuniary penalty of $70,000.
  • Dawkins disqualified from managing corporations for two years and to pay a pecuniary penalty of $25,000.