tutorial6.docx - Jiayi zheng 1.issue whether the director...

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Jiayi zheng 1.issue: whether the director have breached the duty in s588G and s588H corporations Act 2001? laws: —s588G applies if    (a) a person is a director of a company at the time when the company incurs a debt: and    (b) the company is insolvent at that time, or becomes insolvent by incurring that debt, or by incur- ring at that time debts including that debt; and    (c) at that time, there are reasonable grounds for suspecting that the company is insolvent, or  would so become insolvent, as the case may be; and    (d) that time is at or after the commencement of this Act —s588G(2) states that by failing to prevent the company from incurring the debt, the person con- travenes this section if:    (a) the person is aware at the time that there are such grounds for so suspecting or    (b) a reasonable person in a like position in a  company in the company’s circumstances would  be so aware. —s588H(2) state that: it is a defence if it is a proved that, at the time when the debt was incurred,  the person had reasonable grounds to expect, and did expect that the company was solvent at the  time and would remain solvent even if it incurred that debt and any other debts that it incurred at  the time —s 588H(3) state that it is a defence if it is proved that, at the time when the debt was incurred, the person:    (a) had reasonable grounds to believe, and did believe:        (1) that a competent and reliable person (the other person) was reasonable for providing to the first-mentioned person adequate information about whether the company was solvent;and        (2) that the other person was fulfilling that responsibility; and    (b) expected, on the basis of the information provided to the first-mentioned person by the other  person, that the company was solvent at that time and would remain solvent even if it incurred that  debt and any other debts that it incurred at the time.
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