On 1 May 2015 a unanimous judgement was handed down by the Full Court of the Federal Court, stating that in deciding the outcome of a case, the court would no longer receive or act upon any agreement as to penalties previously agreed to between parties.

This followed a recent High Court judgement, which held that the regular practice in Victoria of permitting the prosecution to make submissions on the available sentence range or outcome in criminal cases should cease. The High Court held that such submissions by a prosecutor were inadmissible on the basis that they were a statement of opinion not a submission of law.

Overview

In the recent case of Featherstone v D J Hambleton as liquidator of Ashala Pty Ltd (Featherstone Case), the Queensland Court of Appeal considered the circumstances in which a shadow/de facto director may be caught under the insolvent trading provisions of the Corporations Act 2001. Section 588G of the Act deals with the liability of directors for insolvent trading by their company, which not only applies to directors, but also to any employee determined to be a ‘director’ of a company when the company incurs the debt.

Directors are required to act in the best interests of the company, and to fulfil this duty they must avoid conflicts between their own interests and the interests of the company. As a recent case illustrates, a failure to avoid perceived conflicts can lead to disputes with shareholders.

In the case of Hart Security Australia Pty Ltd v Boucousis & Ors, Hart Security Australia Pty Ltd’s (HSA) majority shareholders, the Hart Group, alleged that HSA’s sole director, Christian Boucousis breached his duty to avoid conflicts of interest.

Sladen Legal is delighted to announce the appointments of Leneen Forde and Louise Houlihan (formerly partners of Cornwall Stodart Lawyers) as principals of the firm.

Louise is joined by senior associate, Jane O’Brien, and associate, Joanna Shields (also formerly of Cornwall Stodart Lawyers) and together they will strengthen Sladen Legal’s existing Employment, Industrial Relations and Occupational Health and Safety team.

Leneen has joined the existing litigation group and new recruit, Lawyer, Andrew Blyth, forming Sladen Legal’s new Commercial Disputes team.

People are generally aware of the risk of personal liability as a director. For example, directors can find themselves personally liable for debts to employees, for tax debts and penalties owed to the Australian Tax Office or for breaches of The Corporations Act 2001 ("the Act").

However, the Act itself provides little guidance or limitation in defining who is a director. A director may be anyone who acts in a position of a director, or someone who gives instructions or expresses wishes and the directors of the company are accustomed to act in accordance with those instructions or wishes. The result is that a trusted company advisor can, unwittingly, become liable as if they were a formally-appointed director.

Discretionary trusts are commonly understood to be efficient structures for asset protection and tax minimisation, and are widely used in modern-day business.  What isn’t so well understood are the obligations of trustees in administering trusts, particularly with regard to providing reasons for their decisions to beneficiaries.

On 27 October 2014 the Coroner’s Court of Victoria delivered its finding into the inquest on the death of Kyle Vassil.  The deceased was a 12 year old student who, on day one of a school camp, drowned in a dam a few meters from shore. Kyle was a competent swimmer who was swimming with other class members in the presence of supervising teachers and young camp leaders when he drowned.  The circumstances surrounding the death were tragic and no doubt traumatic for all persons involved.  The purpose of the Coronial investigation was to ascertain, if possible, the cause of death and the circumstances in which the death occurred.

Many small to medium sized businesses face disputes between shareholders, who can often be family members.  These shareholder disputes can be very expensive to resolve and typically take the form of “oppression” claims commenced in the Supreme Court of Victoria, under the provisions of s 233 of the Corporations Act 2001 (Cth). Although individual disputes differ, they all have in common allegations that the affairs of a company have been conducted in an oppressive manner.

The Supreme Court of Western Australia recently found a director personally liable for misleading and deceptive conduct by reason of the director signing a Letter of Offer on behalf of the company, which contained certain representations. While the case dealt with provisions of the Fair Trading Act 1987 (WA), both the Fair Trading Act 1999 (Vic) and the Australian Consumer Law have equivalent provisions.

On September 5 2014, the Victorian Supreme Court ordered the State of Victoria to pay damages in excess of $1.2 million to a former teacher at Werribee Secondary College, after he sued in negligence for the school’s failure to prevent what became a debilitating psychiatric injury.