Corporations Law for Case in IRAC Format- MyAssignmenthelp.com

Question: Discuss about theCorporations Law for Case in IRAC Format. Answer: Introduction Each and every corporation in the nation is required to adhere to the provisions contained in the Corporations Act, 2001 (Cth) (Cassidy, 2006). Through this act, the directors and the other officers have been given certain responsibilities, which are considered as crucial in discharging their duties and while exercising their powers. The reason why the responsibility is given to the directors is because of the requirement contained in section 198(1) (Australasian Legal Information Institute, 2017a). As per this section, the business of the company is to be conducted by the directors of the company or as per the directions given by them. Hence, the directors have a major obligation for running the completed business of a particular company, in which they hold the position of director (Latimer, 2012). Gore v Australian Securities and Investments Commission [2017] FCAFC 13, or in short just Gore v ASIC is a case which acts as a timely reminder for the officers, corporate advisers and the directors of a company, with regards to the possible exposure which they have regarding their private liability in cases where they are held as an accessory to the contraventions of the provisions contained in the governing act. This is with a particular reference to the issue of securities which require disclosure as per this acts Part 6D.2 (Australasian Legal Information Institute, 2017b). The following part contains a detailed analysis of this case based on the IRAC format. Factual Background In this particular case, Ms Marina Gore made an appeal against the order of the court as per which an injunction for a period of 7.5 years had been imposed pursuant to Corporation Acts section 1324, as a result of which, she was prohibited from carrying on business in the industry of financial services in essence. It was held that Gore had knowingly contravened provisions of Corporations Act, 2001, with a special regard to section 727(1) and 727(2) as she offered securities without the proper disclosure documents, along with section 1041 H of this very act. It was also held that the Australian Securities and Investments Commission Act 2001 (Cth) contained section 12 DA was also contravened by Gore and all these breaches were related to the misleading and deceptive conduct in which Gore was engaged. ASIC made a cross appeal against the term so injunction which was made for Gore, stating that the same was not adequate (Macredie, 2017). Issue The key issue in this case was whether or not Gore had been an accessorial liability with regards to section 727 of the Corporations Act, or not. Rule Section 79 contains the provisions regarding accessorial liability. As per this section, an individual would be personal liable for breaching the provisions of this act, as an accessory, by another individual, if it can be established to the satisfaction of the court that the first individual had been involved in breach of the second individual (Australian Government, 2017). For being involved in a breach, an individual needs to have conspired with others and to have induced, counseled, abetted, aided or procured, in a direct or an indirect manner which was known to the concerned party (WIPO, 2015). As per section 727 of this act, when the securities are offered, the same has to be lodged in the disclosure document. Subsection 1 of this section restricts the individuals from offering securities, and even from distributing the application form for offering securities, which requires the disclosure to be made to the investors as contained in Part 6D.2, till the time such disclosure document pertaining to the offer has been filed with the ASIC. Subsection 2 of this section contains the requirement of the offer form to be accompanied by or to be included in the disclosure document (Federal Register of Legislation, 2017). As per this section, an individual is prohibited from offering securities, and even from distributing the application form for offering securities, and even from distributing the application form for offering securities, which requires the disclosure to be made to the investors as contained in Part 6D.2, till: In case for the offer, a prospectus is used then the form or offer contains the prospectus or the same is accompanied by the prospectus copy. In case for the offer, profile statement and prospectus are used then the form or offer contains the profile statement and prospectus or the same is accompanied by the prospectus copy. In case for the offer, an offer information statement is used then the form or offer contains the prospectus or the same is accompanied by the offer information statements copy (ICNL, 2017). It was held in the case of Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661 that in civil proceedings, for establishing that an individual has contravened the statute and to hold him liable as an accessory, all the requisite elements of the particular breach has to be proved, along with proving that the person who has been alleged as the accessory had the knowledge of required facts which constitute the breach (Haarsma Lawyers, 2009). Further, the breach has to be an intentional participant and the intent has to be based on the knowledge of these elements (Jade, 2017a). In the matter of Giorgianni v The Queen [1985] HCA 29; (1985) 156 CLR 473, it was held that the participation of an accessory, for the purpose of criminal law has to be intentional and has to be aimed at the commission of the constituting acts. This particular case was related to the offence pertaining to culpable driving, which is an offence attracting strict liability. In this matter the conduct was related to the motor vehicle driving which had defective brakes (Jade, 2017b). As per the applicable statute, an individual had to counsel, procure, aid, and abate in another individual driving in a dangerous manner, which resulted in grievous bodily harm or death, and in such cases, the first individual could be convicted of a particular offence pertaining to culpable driving. In this matter, the appellant was convicted even though it could not be shown that he was aware of the defective brakes (High Court of Australia, 2017). This was based on the verdict of Johnson v Youden [1950] 1 KB 544. In this case if was held that for holding a person as an accessory, for an offence, the individual must have known about the crucially essential elements which form that offence. So, an individual does not have to be aware about the offence being committed, as he may not have been aware about the facts which formed such an offence. Further, a defense cannot be cited in the ignorance of law (Davies, 2015). The knowledge needs to be actual and could not be constructive. This was established in the matter brought before the court in Australian Securities and Investments Commission v Adler [2002] NSWSC 171, (2002) 168 FLR 253. In this case, both Adler Corporation and Rodney Adler were claimed to have been liable under section 79 of the Corporations Act, 2001, as being accessories in the contraventions of section 181 and 182 of the Corporations Act, 2001 by Raymond Williams (Justis, 2017). It was stated by the court that the transaction had been carried on the initiative of Adler, in which Williams had given his directions and even agreement. Hence, it was held by the court that Adler and Williams had knowingly contravened these sections. And they could not deny that they had the knowledge regarding the factual elements which formed the breach, even when both of them considered that the transaction had taken place at arms length (Australasian Legal Information Institute, 2017c). Application In order to prove the accessorial liability in this case, it has to be shown that the alleged contravened had made an offer of securities, or she had distributed an application with regards to securities offer. Further, it had to be shown that the offer required the disclosures to investors as per Part 6D.2. And lastly, it was required to be shown that no profile statement, prospectus or any other information statement was filed with the ASIC. After taking into consideration, all the relevant aspects of this case, it can be concluded that indeed the securities had been offered and/or there had been applications distribution pertaining to the offer. And as per the situation which was present, a disclosure document was required to be lodged and the situation had to be the contents of this offer. In this case, Gores had knowledge of these matters and no disclosure document had been filed with the ASIC (Jade, 2017c). In this case, extensive consideration has to be given to the fact that Gore had the knowledge when she took part in the breach. The approach which had been taken in the previous case, from which the appeal has been made in the present case, the judges failed to analyze the elements contained in section 727(1). It was earlier stated that ASIC was only required to show that the defendants had knowledge regarding only two elements and were not required to show that they knew that a disclosure was required as per the provisions of Corporations Act, as highlighted above. This was done by making a reference to the cases of Yorke v Lucas and Giorgianni v The Queen. As per these cases, it was not required to be shown that the alleged accessory had the knowledge about legal provisions which could have rendered the conduct of the principal contravener as unlawful and it only had to be shown that the accessory was aware about the pertinent matter regarding illegality. The pertinent information in this particular case relates to the knowledge of facts which required disclosure, and not that this disclosure was required through the governing act or that it even exists (Jade, 2017c). Even though this case contained elements which attracted the Criminal Code, the same could not be applied as this matter was not raised when the matter was initially brought before the court for consideration. The option before the court is to uphold the finding of the first instance, irrespective of the failure with regards to the application of Criminal Code, or for determination of matter as per the law, to remit the matter. In case this matter had been related to the criminal offence, the matter would have been sent back for considering it again. But the same could not be done. With regards to the accessorial liability, the same is clearly present in this case. This stems from the knowledge of the contents of the particular offer which acted as the proof for the requirement of disclosures. Here the provisions of Part 6D.2 were clearly present as the ignorance of law could not be used as an excuse. And the failure of lodging the disclosure document attracted the criminal code (Jad e, 2017c). Conclusion and Decision of the Court In this case, it was considered by the Court that ASIC was required to establish the fault elements of Criminal Code in order to get attain the civil remedies with regards to the contraventions of Corporations Act, 2001, by securities being offered in absence of a prospectus. The same was done as an appeal had been filed by Gore and a cross appeal had been filed by ASIC (Mondo Visione, 2017). The court did not consider the criminal code as the same was not applied in the first instance, even when they could identify the physical, as well as, fault elements regarding the pertinent offences. And after considering these issues, he court concluded that the decision given by the primary judge had given the correct ruling with regards to breach of section 727 by Gore. So the grounds stated in the amended notice of appeal were dismissed by the court. Hence, the appeal of Gore was rejected. Along with this, the cross appeal of ASIC was also rejected by the court. The court stated that the decision of the primary judge had reflected properly over the overall culpability of the matter and the contravention of section 727 by Gore was merely a part of a grand scheme. Though, Gore was ordered to pay the cost of appeal to ASIC and the ASIC was ordered to pay the costs of cross appeal to Gore. References Australasian Legal Information Institute. (2017a) Corporations Act 2001. [Online] Australasian Legal Information Institute. Available from: https://www.companydirectors.com.au/director-resource-centre/organisation-type/organisation-definitions [Accessed on: 28/05/17] Australasian Legal Information Institute. (2017b) Gore v Australian Securities and Investments Commission [2017] FCAFC 13 (13 February 2017). [Online] Australasian Legal Information Institute. Available from: https://www.austlii.edu.au/au/cases/cth/FCAFC/2017/13.html [Accessed on: 28/05/17] Australasian Legal Information Institute. (2017c) ASIC v Adler and 4 Ors [2002] NSWSC 483 (30 May 2002). [Online] Australasian Legal Information Institute. Available from: https://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/nsw/NSWSC/2002/483.html?stem=0synonyms=0query=asic%20v%20adler [Accessed on: 28/05/17] Australian Government. (2017) Corporations Act 2001. [Online] Australasian Legal Information Institute. Available from: https://www.legislation.gov.au/Details/C2013C00605 [Accessed on: 28/05/17] Cassidy, J. (2006) Concise Corporations Law. 5th ed. NSW: The Federation Press. Davies, P.S. (2015) Accessory Liability. Oxford: Hart Publishing. Federal Register of Legislation. (2017) Corporations Act 2001. [Online] Australasian Legal Information Institute. Available from: https://www.legislation.gov.au/Details/C2013C00605 [Accessed on: 28/05/17] Haarsma Lawyers. (2009) Case Study - Misleading and Deceptive Conduct - Yorke v Lucas - Oct 6, 2009. [Online] Haarsma Lawyers. Available from: https://www.haarsma.com.au/news/1359 [Accessed on: 28/05/17] High Court of Australia. (2017) Giorgianni v The Queen. [Online] High Court of Australia. Available from: https://eresources.hcourt.gov.au/showbyHandle/1/233522 [Accessed on: 28/05/17] ICNL. (2017) Corporations Act 2001. [Online] Australasian Legal Information Institute. Available from: https://www.icnl.org/research/library/files/Australia/Corps2001Vol4WD02.pdf [Accessed on: 28/05/17] Jade. (2017a) Yorke v Lucas. [Online] Jade. Available from: https://jade.io/article/67232 [Accessed on: 28/05/17] Jade. (2017b) Giorgianni v R. [Online] Jade. Available from: https://jade.io/article/67192 [Accessed on: 28/05/17] Jade. (2017c) Gore v Australian Securities and Investments Commission [2017] FCAFC 13. [Online] Jade. Available from: https://jade.io/article/520906 [Accessed on: 28/05/17] Justis. (2017) ASIC v Adler 4 Ors 2002. [Online] Justis. Available from: https://app.justis.com/case/asic-v-adler-4-ors/overview/c5CJn0CdnXWca [Accessed on: 28/05/17] Latimer, P. (2012) Australian Business Law 2012. 31st ed. Sydney, NSW: CCH Australia Limited. Macredie, R. (2017) Gore v Australian Securities and Investments Commission [2017] FCAFC 13. [Online] Thomson Reuters. Available from: https://www.linkedin.com/pulse/gore-v-australian-securities-investments-commission-2017-macredie [Accessed on: 28/05/17] Mondo Visione. (2017) ASIC: Application Of Criminal Code In Civil Proceedings Under Corporations. [Online] Mondo Visione. Available from: https://www.mondovisione.com/media-and-resources/news/asic-application-of-criminal-code-in-civil-proceedings-under-corporations-act/ [Accessed on: 28/05/17] WIPO. (2015) Corporations Act 2001. [Online] Australasian Legal Information Institute. Available from: https://www.wipo.int/wipolex/en/text.jsp?file_id=370817 [Accessed on: 28/05/17]