DIRECTORS' DUTIES: statutory duties
1. The disqualification powers under ss206C and E should not be read as permitting a qualified order, restricting the disqualification to involvement in public companies - the provisions are meant to protect consumers and creditors as well as shareholders and investors.
2. s 180(1) does not mention 'skill'. However, the court noted that directors are expected to be familiar with the fundamentals of business and to keep themselves informed with the company's doings.
3. In regard to s 180(3), 'business judgment' would not extend to not thinking about it at all.
4. The burden of proof with regard to 'business judgement' is on the defendant
5. In regard to delegation under s 190, assimilated the statutory test for 'reasonable grounds' with the test applied at general law. Following factors relevant:
(a) The function that has been delegated is such that 'it may properly be left to such officers': Re City Fire Equitable Insurance, per Romer J
(b) The extent to which the director is put on inquiry or should have been put on inquiry: Re Property Force Consultants, per Derrington J
(c) The relationship between the director and delegate must be such that the director honestly holds the belief that the delegate is trustworthy, competent, and reliable - knowledge that the delegate is otherwise makes reliance unreasonable: Dempster & Biala Pty Ltd v Mallina Holdings Ltd
(d) The risk involved in the transaction and the nature of the transaction: Permanent Building Society v Wheeler
(e) The extent of steps taken by the director to establish trust.
(f) Whether the director is executive or non-executive: Permanent Building Society v Wheeler, per Ipp J. (Note: move away from this distinction in Daniels v Anderson.)
FINANCIAL ASSISTANCE: post-1998
6. Financial assistance under s260A interpreted to require impoverishment, rather than mere purpose.
Re HIH Insurance (in prov liq); ASIC v Adler
ASIC seeks disqualification of Adler; Adler argues that the disqualification order should relate only to public companies, allowing him to remain involved in his private interests.