Asic may apply for a declaration of contravention the

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ASIC may apply for a declaration of contravention The court must make the declaration if it is satisfied that a person has contravened the civil penalty provision (listed above) {s 1317E(2) Corporations Act} A declaration of contravention is also a prerequisite to making a pecuniary penalty order or disqualification order {s 1317G(1)(a) Corporations Act} Additionally it should be noted that Declarations of Contravention may be sought for: o Share Capital Transactions {ss 245L(2), 256D(3), 259F(2) and 260D(2) Corporations Act} A.2 Pecuniary Penalty Order
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ASIC may apply to the court (if there is a declaration of contravention) for an order that a person who has contravened the civil penalty provision (listed above) to pay (ASIC on behalf of) the Cth a pecuniary penalty Under { s 1317G Corporations Act } a court may order a person to pay the Commonwealth a pecuniary penalty of up to $200,000 if: o (a) a declaration of contravention has been made o (aa) the contravention is of the corporation/scheme civil penalty provision and o (b) the contravention (i) materially prejudices the interests of the corporation or scheme or its members or (ii) materially prejudices the corporations ability to pay its creditors (iii) is serious There is no obligation for ASIC to seek a pecuniary penalty order and in some cases the defendant may negotiate a penalty with ASIC In {ASIC v Vizard} the court adopted the penalty agreed by the parties and suggested to the court, notwithstanding that Finklestein J said he would have imposed a higher penalty if left uninstructed – this was on the basis that the court should not depart from an amount agreed by the parties unless it is clearly out of bounds A.3 Disqualification Order If a declaration is made that a person has contravened a civil penalty provision under {s 1317E Corporations Act} then ASIC may apply to the court under {s 206C Corporations Act} for an order disqualifying the person from managing corporations for a period that the court considers appropriate For this to be so the court must be satisfied that the disqualification is justified {s 206C(1)(b) Corporations Act} In determining the order, the court will have regard to the person’s conduct in relation to management, business or property of any corporation {s 206C(2) Corporations Act} Additionally note that under {s 206D(1) Corporations Act} on application of ASIC, the Court may disqualify a person from managing a corporation for up to 20 years if: o (a) within the last 7 years, the person has been an officer of 2 or more corporations that have failed and o (b) the court is satisfied that: (i) the manner in which the corporation was managed was wholly or partly responsible for the corporation failing (ii) disqualification is justified A.4 Compensation Order Under {s 1317H Corporations Act } there can be an order of the court that a person who has contravened a civil penalty provision, compensate the company for damage resulting from the contravention o For insolvent trading the order of compensation is made under
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