Causing detriment to company under s 1843

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causing detriment to Company Under {s 184(3) Corporations Act} a person who obtains information because they are a director or other officer or employee of a corporation commits an offence is they use information dishonestly o (a) with intention of directly or indirectly gaining an advantage for themselves or someone else, or causing detriment to corporation or o (b) recklessly as to whether the use may result in themselves or someone else directly or indirectly gaining an advantage or causing detriment to Company
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Note that both of these provisions apply to directors, officers AND employees B.2 Criminal Consequences for Breaching Duty to Prevent Insolvent Trading Under { s 588K Corporations Act} a criminal court may make an order for compensation equal to the amount of that loss or damage if: o (a) the person is guilty under s 588G(3) o (b) court is satisfied that: (i) debt is wholly or partly unsecured and (ii) person to whom the debt is owed has suffered loss or damage in relation to the debt because of the company’s insolvency B.3 Criminal Consequences for Related Party Transactions If a person “ involved” in the contravention they contravene the subsection {s 209(2) Corporations Act} o Under {s 79 Corporations Act } ‘involved’ is defined: Aided, abetted, counselled or procured Induced, by threats or promises or otherwise the contravention In any way knowingly concerned in or partly to the contravention Conspired with others Then under {s 209(3) Corporations Act} a person commits an offence if they are involved in the contravention o The maximum punishment is fine of $200,000 or up to 5 years imprisonment C. Injunctive Relief Under {s 1324 Corporations Act} an injunction may be sought to restrain a threatened contravention of the Act This would include: o A threatened breach of civil penalty provisions An application may be made by ASIC OR a person whose interests have been or would be affected by conduct There have been inconsistent decisions regarding whether this remedy is only available to ASIC or whether interested persons such as shareholders may also bring an action in respect of breach of civil penalty provisions RELIEF FROM LIABILITY It may be possible for the director to obtain relief from liability through many ways listed below. A. Relief by Court Under both {ss 1317S and 1318 Corporations Act} the Act gives the court power to excuse a director from liability Where: o They have acted honestly o And in all circumstances the court thinks they ought to be fairly excused The operation of the two sections are similar however s 1318 predates s 1317S and applies in relation to civil proceedings against a person for negligence, fault, breach of trust or breach of duty o Can excuse the person from liability wholly or in part on such terms as the court sees fit S 1317S is substantially similar in terms but applies to breaches of civil penalty provisions – USE THIS ONE!
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