Collingwood Football Club recently paid the price for placing a misleading advertisement relating to a membership offer. Fined A$20,400 for its infringements of the Consumer Law, Collingwood had failed to state prominently the total minimum price payable for the offer. In this case and others, the Australian Competition and Consumer Commission has been proactive in enforcing the pricing provisions of the law.
The government has released an exposure draft of the Personal Liability for Corporate Fault Reform Bill 2012, which contains proposed amendments to certain Commonwealth laws governing the derivative liability of directors for offences by their company. The majority of the proposed amendments concern provisions of the Corporations Act 2001, but they also extend to other pieces of federal legislation.
Three recent landmark court decisions on directors' duties have involved consideration of when directors are entitled to rely on the advice of advisers in the context of an allegation of a breach of their duty of care and diligence. Despite their different factual circumstances, these cases demonstrate some common threads that are emerging on the reliance issue, which are worthy of closer scrutiny.
The Australian Securities and Investments Commission (ASIC) has released a long-overdue regulatory guide on the related party provisions. It provides a synthesis of the regulator's views on the few judicial decisions that exist in respect of the provisions and, among other things, sets out new guidance on the criteria that ASIC expects boards to apply in determining whether a related party transaction is on arm's-length terms.
The New South Wales Supreme Court recently considered the consequence of deregistration or dissolution of three companies in an international corporate group, where a former director of the group was looking to reinstate one of the companies in order to bring a shareholder's derivative proceeding against two of his former fellow directors and others.
The government's recent amendments to the Corporations Law take the bite out of the 'business judgment rule'. While trying to protect employees of companies that become insolvent, the amendments unfairly punish directors who make a bad business decision in good faith.
Including: The Corporations Law; Business Names; External Matters
The Corporations Law Economic Reform Programme is part of a government review into the existing law, and is set to revamp corporate governance in this area.