Vol29 No2 June-August 2015

Recent developments in corporations law
Author: Justice Ashley Black
This paper reviews recent developments in the corporations law, some in 2014 and some in the first half of 2015.

I first consider an appellate and a first instance decision dealing with liability for knowing involvement in a breach of fiduciary duty, an important appellate decision dealing with the application of deeds of indemnity in favour of directors and officers in respect of the costs of criminal proceedings, and two cases dealing with termination payments to company officers. I will also note a recent decision dealing with the requisition of shareholder meetings, in the particular context of capital reductions.

I then consider several recent decisions in respect of insolvency, including two first instance decisions concerning the transfer of shares by a deed administrator; appellate decisions relating to verification of and setting aside creditor’s statutory demands; a decision of the High Court concerning the scope of a liquidator’s equitable lien; an appellate decision taking a broad view of the provisions dealing with unreasonable director-related transactions in insolvency; and decisions of the Court of Appeal of the Supreme Court of New South Wales and the High Court dealing with extensions of time for a liquidator to bring proceedings under s588FF of the Corporations Act 2001 (Cth).

I also note two decisions of the High Court dealing with managed investment schemes and further decisions dealing with continuous disclosure, indirect causation in continuous disclosure and misleading disclosure claims, and a decision of the High Court, concerning the complex proportionate liability regime under Pt 7.10 Div 2A of the Corporations Act. I finally note further developments in financial services regulation, including in respect of the Future of Financial Advice regime under Pt 7.7A of the Corporations Act and the possibility of further reforms arising from the 2014 Financial System Inquiry (Murray Inquiry) and the Senate Economics Committee’s inquiry into the performance of the Australian Securities & Investments Commission (‘ASIC’).

Fetters on the exercise of unilateral contractual powers and discretions
Author: Jeffrey Goldberger
Whether the exercise of a unilateral contractual power or discretion is subject to any constraint represents a perennial and practical question in Australian contract law.

In an endeavour to control abuse of a contractual power both the Australian and English courts have developed techniques which in many respects overlap leading, potentially, to a confusing taxonomy. As far back as 1947 Lord Greene MR, in dealing with the abuse of executive power in Associated Provincial Picture Houses Limited v Wednesbury Corporation1 observed:

‘There have been in the cases expressions used relating to the sort of things that authorities must not do, not merely in cases under the Cinematograph Act but, generally speaking, under other cases where the powers of local authorities came to be considered. I am not sure myself whether the permissible grounds of attack cannot be defined under a single head. It has been perhaps a little bit confusing to find a series of grounds set out. Bad faith, dishonesty — those of course, stand by themselves — unreasonableness, attention given to extraneous circumstances, disregard of public policy and things like that have all been referred to, according to the facts of individual cases, as being matters which are relevant to the question. If they cannot all be confined under one head, they at any rate, I think, overlap to a very great extent. For instance, we have heard in this case a great deal about the meaning of the word “unreasonable”.’

It is true the discretion must be exercised reasonably. Now what does that mean? Lawyers familiar with the phraseology commonly used in relation to exercise of statutory discretions often use the word ‘unreasonable’ in a rather comprehensive sense.
The purpose of this paper is to review those techniques in light of the most recent case law.
  • An edited version of the President's address at the CLA's 50th Anniversary dinner
    By Norman Donato
    page 2
  • Recent developments in corporations law
    By Justice Ashley Black
    page 3
  • Fetters on the exercise of unilateral contractual powers and discretions
    By Jeffrey Goldberger
    page 16
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