mdroth/huggingface-course_section-5_zst huggingface dataset:
Case: Allen v Gold Reefs of West Africa Ltd [1900] 1 Ch 656
Outcome: cited
The very existence of any such duty and -- if any such duty existed -- the content of the duty had thus to be addressed as a matter of general principle. As a matter of general principle it was common ground that: (a) the duty owed by a director to his company is fiduciary in character (eg, Australian Growth Resources Corp Pty Ltd v Van Reesema (1988) 13 ACLR 261 at 268 per King CJ); (b) the duty includes a duty to act bona fide and in the best interests of the company (eg, Darvall v North Sydney Brick &amp; Tile Co Ltd (1989) 16 NSWLR 260 at 270 per Kirby P; Allen v Gold Reefs of West Africa Ltd [1900] 1 Ch 656 at 671); (c) the discharge of that duty may involve a right on the part of a director to inspect those documents relevant to the discharge of the duty (eg, Edman v Ross (1922) 22 SR (NSW) 351 ; Molomby v Whitehead [1985] FCA 421 ; (1985) 7 FCR 541 at 550 per Beaumont J); (d) the discharge of the duty involves a director becoming familiar with how the company conducts its business (eg, Daniels v Anderson (1995) 37 NSWLR 438 at 500 1); and (e) a director who occupies the position of chairman may have additional rights and duties, including a duty of selecting documents to be placed before the board for its consideration and keeping the board fully informed (cf Woolworths Ltd v Kelly (1991) 22 NSWLR 189 at 225 per Mahoney JA). Reference should also be made to ss 180 to 184 of the Corporations Act and to Ford's Principles of Corporations Law at [8-010] and [8-065] [8-090] (13 th ed, 2007). The statutory duties imposed by ss 181 and 182 reflect, and to some extent refine, corresponding obligations on directors under the general law: Australian Securities and Investments Commission v Maxwell [2006] NSWSC 1052 at [99] , [2006] NSWSC 1052 ; 59 ACSR 373 at 397. See also: Austin R, Ford H and Ramsay I, Company Directors: Principles of Law and Corporate Governance (2005) at [7.4]. Beyond recognition of these general principles, the potential existed in the present proceeding for submissions to descend to a level of unnecessary abstraction.
Case: Aussie Home Security Pty Ltd v Sales Systems Australia Pty Ltd [2000] FCA 498 , 172 ALR 141
Outcome: cited
On this approach, the indemnity in respect of legal costs incurred in the present " proceeding " was not denied by s 199A(3)(a) and (2)(a). Emphasis was placed upon an accepted difference between a Statement of Claim as an originating process and a Cross-Claim . Indeed, it could also have been advanced on behalf of Mr Rickus that a Cross-Claim has been accepted as itself constituting a " proceeding " in its own right such that in the present matter before the Court there may have been two " proceedings ": cf Aussie Home Security Pty Ltd v Sales Systems Australia Pty Ltd [2000] FCA 498 at [5] , [2000] FCA 498 ; 172 ALR 141 at 143 per Katz J. On such an approach, the " proceeding " in which the liability of Mr Rickus was established was a different " proceeding " to the one commenced by the Applicants; and, in his own " proceeding ", Mr Rickus was neither " defending " nor " resisting " any liability. 77 Whether there be one " proceeding " before the Court or two " proceedings ", it is not considered that the legislative objective set forth in s 199A(3)(a) is to be resolved by such subtleties. The legislative objective is reasonably clear -- an officer or auditor of a company is not to be indemnified in respect to such legal costs as he incurs in defending or resisting proceedings seeking to establish the existence of the liability in issue. At all material times the Trustee was asserting a right to have a copy of the documents produced. At all materials times Mr Rickus was resisting or denying any such right on the part of the Trustee and any duty on his part to produce a copy. A " proceeding " was instituted seeking to establish the liability denied. A further " proceeding " in the form of the Cross-Claim , it may be accepted, was also instituted. The very forensic purpose of the Cross-Claim was to resist the demand for the production of a copy of the documents. Such conduct, it is considered, falls within s 199A(3)(a). The duty or obligation to produce a copy of the documents can properly be characterised as a " liability " owed to the company. 78 It is also separately considered that the fact that that finding has been made in resolution of the Cross-Claim does not lead to any different conclusion as to the application of s 199A(3)(a). The Cross-Claim was but the vehicle whereby it was found that Mr Rickus was under a " liability owed to the company ". It may be considered to be a curious result if a director of a company could otherwise escape the application of s 199A(3)(a) by simply filing a Cross-Claim in any " proceeding " in which a " liability " is sought to be established and inviting the Court to enter judgment -- either for or against him -- in the Cross-Claim and not the originating application. The object or purpose of s 199A(3) could, by such a means, potentially be thwarted.
Case: Australian Growth Resources Corp Pty Ltd v Van Reesema (1988) 13 ACLR 261
Outcome: cited
The very existence of any such duty and -- if any such duty existed -- the content of the duty had thus to be addressed as a matter of general principle. As a matter of general principle it was common ground that: (a) the duty owed by a director to his company is fiduciary in character (eg, Australian Growth Resources Corp Pty Ltd v Van Reesema (1988) 13 ACLR 261 at 268 per King CJ); (b) the duty includes a duty to act bona fide and in the best interests of the company (eg, Darvall v North Sydney Brick &amp; Tile Co Ltd (1989) 16 NSWLR 260 at 270 per Kirby P; Allen v Gold Reefs of West Africa Ltd [1900] 1 Ch 656 at 671); (c) the discharge of that duty may involve a right on the part of a director to inspect those documents relevant to the discharge of the duty (eg, Edman v Ross (1922) 22 SR (NSW) 351 ; Molomby v Whitehead [1985] FCA 421 ; (1985) 7 FCR 541 at 550 per Beaumont J); (d) the discharge of the duty involves a director becoming familiar with how the company conducts its business (eg, Daniels v Anderson (1995) 37 NSWLR 438 at 500 1); and (e) a director who occupies the position of chairman may have additional rights and duties, including a duty of selecting documents to be placed before the board for its consideration and keeping the board fully informed (cf Woolworths Ltd v Kelly (1991) 22 NSWLR 189 at 225 per Mahoney JA). Reference should also be made to ss 180 to 184 of the Corporations Act and to Ford's Principles of Corporations Law at [8-010] and [8-065] [8-090] (13 th ed, 2007). The statutory duties imposed by ss 181 and 182 reflect, and to some extent refine, corresponding obligations on directors under the general law: Australian Securities and Investments Commission v Maxwell [2006] NSWSC 1052 at [99] , [2006] NSWSC 1052 ; 59 ACSR 373 at 397. See also: Austin R, Ford H and Ramsay I, Company Directors: Principles of Law and Corporate Governance (2005) at [7.4]. Beyond recognition of these general principles, the potential existed in the present proceeding for submissions to descend to a level of unnecessary abstraction.
Case: Australian Securities and Investments Commission v Citigroup Global Markets Australia Pty Ltd (No 4) [2007] FCA 963 , 160 FCR 35
Outcome: applied
A more generally expressed submission advanced by the Trustee that it was a part of the fiduciary duty owed by a director to make full disclosure is rejected. " The strong weight of judicial authority is that fiduciary duties are proscriptive rather than prescriptive; accordingly, a fiduciary does not have a positive duty to disclose information ": Australian Securities and Investments Commission v Citigroup Global Markets Australia Pty Ltd (No 4) [2007] FCA 963 at [375] , [2007] FCA 963 ; 160 FCR 35 at 88 per Jacobson J. Reference may also be made to one of the authorities there referred to by His Honour, namely Breen v Williams [1995] HCA 63 , 186 CLR 71. Gaudron and McHugh JJ there observed (at 113): In this country, fiduciary obligations arise because a person has come under an obligation to act in another's interests. As a result, equity imposes on the fiduciary proscriptive obligations -- not to obtain any unauthorised benefit from the relationship and not to be in a position of conflict. If these obligations are breached, the fiduciary must account for any profits and make good any losses arising from the breach. But the law of this country does not otherwise impose positive legal duties on the fiduciary to act in the interests of the person to whom the duty is owed. If there was a general fiduciary duty to act in the best interests of the patient, it would necessarily follow that a doctor has a duty to inform the patient that he or she has breached their contract or has been guilty of negligence in dealings with the patient. That is not the law of this country. Gummow J concluded (at 137 8): Fiduciary obligations arise (albeit perhaps not exclusively) in various situations where it may be seen that one person is under an obligation to act in the interests of another. Equitable remedies are available where the fiduciary places interest in conflict with duty or derives an unauthorised profit from abuse of duty. It would be to stand established principle on its head to reason that because equity considers the defendant to be a fiduciary, therefore the defendant has a legal obligation to act in the interests of the plaintiff so that failure to fulfil that positive obligation represents a breach of fiduciary duty. See also: Pilmer v Duke Group Ltd [2001] HCA 31 at [74] (per McHugh, Gummow, Hayne and Callinan JJ) and [127] (per Kirby J), [2001] HCA 31 ; 207 CLR 165 at 197 8 and 214; P &amp; V Industries Pty Ltd v Porto [2006] VSC 131 at [12] [25], 14 VR 1 at 4 6 per Hollingworth J; Dempsey G and Greinke A, ' Proscriptive fiduciary duties in Australia ' (2004) 25 Aust Bar Rev 1.
Case: Australian Securities and Investments Commission v Maxwell [2006] NSWSC 1052 , 59 ACSR 373
Outcome: followed
The very existence of any such duty and -- if any such duty existed -- the content of the duty had thus to be addressed as a matter of general principle. As a matter of general principle it was common ground that: (a) the duty owed by a director to his company is fiduciary in character (eg, Australian Growth Resources Corp Pty Ltd v Van Reesema (1988) 13 ACLR 261 at 268 per King CJ); (b) the duty includes a duty to act bona fide and in the best interests of the company (eg, Darvall v North Sydney Brick &amp; Tile Co Ltd (1989) 16 NSWLR 260 at 270 per Kirby P; Allen v Gold Reefs of West Africa Ltd [1900] 1 Ch 656 at 671); (c) the discharge of that duty may involve a right on the part of a director to inspect those documents relevant to the discharge of the duty (eg, Edman v Ross (1922) 22 SR (NSW) 351 ; Molomby v Whitehead [1985] FCA 421 ; (1985) 7 FCR 541 at 550 per Beaumont J); (d) the discharge of the duty involves a director becoming familiar with how the company conducts its business (eg, Daniels v Anderson (1995) 37 NSWLR 438 at 500 1); and (e) a director who occupies the position of chairman may have additional rights and duties, including a duty of selecting documents to be placed before the board for its consideration and keeping the board fully informed (cf Woolworths Ltd v Kelly (1991) 22 NSWLR 189 at 225 per Mahoney JA). Reference should also be made to ss 180 to 184 of the Corporations Act and to Ford's Principles of Corporations Law at [8-010] and [8-065] [8-090] (13 th ed, 2007). The statutory duties imposed by ss 181 and 182 reflect, and to some extent refine, corresponding obligations on directors under the general law: Australian Securities and Investments Commission v Maxwell [2006] NSWSC 1052 at [99] , [2006] NSWSC 1052 ; 59 ACSR 373 at 397. See also: Austin R, Ford H and Ramsay I, Company Directors: Principles of Law and Corporate Governance (2005) at [7.4]. Beyond recognition of these general principles, the potential existed in the present proceeding for submissions to descend to a level of unnecessary abstraction.
Case: Australian Securities and Investments Commission v Rich [2003] NSWSC 85 , 174 FLR 128
Outcome: cited
In some circumstances, for example, it has been said that it is " the duty of the general manager and (possibly) of the chairman to go carefully through the returns from the branches, and to bring before the board any matter requiring their consideration ": Dover v Cory [1901] AC 477. There being addressed was the responsibility of a director to inform himself as to the records of the company as opposed to the reliance he could place upon a chairman or a general manager in identifying those matters requiring his consideration. Lord Davey concluded as follows (at 492 3): In this state of the evidence, my Lords, I ask whether the course of business at the board meetings, as described by the respondent, was a reasonable course to be pursued by the respondent, and other directors, or whether the knowledge which might have been derived from a careful and comparative examination of the weekly states and quarterly returns from the different branches of the bank ought to be imputed to the respondent, or (alternatively) whether he was guilty of such neglect of his duty as a director as would render him liable to damages. I do not think that it is made out that either of the two latter questions should be answered in the affirmative. I think the respondent was bound to give his attention to and exercise his judgment as a man of business on the matters which were brought before the board at the meetings which he attended, and it is not proved that he did not do so. But I think he was entitled to rely upon the judgment, information, and advice of the chairman and general manager, as to whose integrity, skill, and competence he had no reason for suspicion. I agree with what was said by Sir George Jessel in Hallmark's Case [(1878) 9 Ch D 329] , and by Chitty J. in In re Denham &amp; Co. [(1883) 25 Ch D 752] , that directors are not bound to examine entries in the company's books. It was the duty of the general manager and (possibly) of the chairman to go carefully through the returns from the branches, and to bring before the board any matter requiring their consideration; but the respondent was not, in my opinion, guilty of negligence in not examining them for himself, notwithstanding that they were laid on the table of the board for reference. ... In other circumstances it has been said that a " chairman has the primary responsibility of selecting matters and documents to be brought to the board's attention ": AWA Ltd v Daniels (1992) 7 ACSR 759 at 867. More recently, in Australian Securities and Investments Commission v Rich [2003] NSWSC 85 at [51] [72], 174 FLR 128 at 141 7, Austin J has reviewed the authorities and considered the duties owed by a chairman of a listed company. See also: Australian Securities and Investments Commission v Vines [2003] NSWSC 1116 , 182 FLR 405.
Case: Australian Securities and Investments Commission v Vines [2003] NSWSC 1116 , 182 FLR 405
Outcome: cited
In some circumstances, for example, it has been said that it is " the duty of the general manager and (possibly) of the chairman to go carefully through the returns from the branches, and to bring before the board any matter requiring their consideration ": Dover v Cory [1901] AC 477. There being addressed was the responsibility of a director to inform himself as to the records of the company as opposed to the reliance he could place upon a chairman or a general manager in identifying those matters requiring his consideration. Lord Davey concluded as follows (at 492 3): In this state of the evidence, my Lords, I ask whether the course of business at the board meetings, as described by the respondent, was a reasonable course to be pursued by the respondent, and other directors, or whether the knowledge which might have been derived from a careful and comparative examination of the weekly states and quarterly returns from the different branches of the bank ought to be imputed to the respondent, or (alternatively) whether he was guilty of such neglect of his duty as a director as would render him liable to damages. I do not think that it is made out that either of the two latter questions should be answered in the affirmative. I think the respondent was bound to give his attention to and exercise his judgment as a man of business on the matters which were brought before the board at the meetings which he attended, and it is not proved that he did not do so. But I think he was entitled to rely upon the judgment, information, and advice of the chairman and general manager, as to whose integrity, skill, and competence he had no reason for suspicion. I agree with what was said by Sir George Jessel in Hallmark's Case [(1878) 9 Ch D 329] , and by Chitty J. in In re Denham &amp; Co. [(1883) 25 Ch D 752] , that directors are not bound to examine entries in the company's books. It was the duty of the general manager and (possibly) of the chairman to go carefully through the returns from the branches, and to bring before the board any matter requiring their consideration; but the respondent was not, in my opinion, guilty of negligence in not examining them for himself, notwithstanding that they were laid on the table of the board for reference. ... In other circumstances it has been said that a " chairman has the primary responsibility of selecting matters and documents to be brought to the board's attention ": AWA Ltd v Daniels (1992) 7 ACSR 759 at 867. More recently, in Australian Securities and Investments Commission v Rich [2003] NSWSC 85 at [51] [72], 174 FLR 128 at 141 7, Austin J has reviewed the authorities and considered the duties owed by a chairman of a listed company. See also: Australian Securities and Investments Commission v Vines [2003] NSWSC 1116 , 182 FLR 405.
Case: AWA Ltd v Daniels (1992) 7 ACSR 759
Outcome: cited
In some circumstances, for example, it has been said that it is " the duty of the general manager and (possibly) of the chairman to go carefully through the returns from the branches, and to bring before the board any matter requiring their consideration ": Dover v Cory [1901] AC 477. There being addressed was the responsibility of a director to inform himself as to the records of the company as opposed to the reliance he could place upon a chairman or a general manager in identifying those matters requiring his consideration. Lord Davey concluded as follows (at 492 3): In this state of the evidence, my Lords, I ask whether the course of business at the board meetings, as described by the respondent, was a reasonable course to be pursued by the respondent, and other directors, or whether the knowledge which might have been derived from a careful and comparative examination of the weekly states and quarterly returns from the different branches of the bank ought to be imputed to the respondent, or (alternatively) whether he was guilty of such neglect of his duty as a director as would render him liable to damages. I do not think that it is made out that either of the two latter questions should be answered in the affirmative. I think the respondent was bound to give his attention to and exercise his judgment as a man of business on the matters which were brought before the board at the meetings which he attended, and it is not proved that he did not do so. But I think he was entitled to rely upon the judgment, information, and advice of the chairman and general manager, as to whose integrity, skill, and competence he had no reason for suspicion. I agree with what was said by Sir George Jessel in Hallmark's Case [(1878) 9 Ch D 329] , and by Chitty J. in In re Denham &amp; Co. [(1883) 25 Ch D 752] , that directors are not bound to examine entries in the company's books. It was the duty of the general manager and (possibly) of the chairman to go carefully through the returns from the branches, and to bring before the board any matter requiring their consideration; but the respondent was not, in my opinion, guilty of negligence in not examining them for himself, notwithstanding that they were laid on the table of the board for reference. ... In other circumstances it has been said that a " chairman has the primary responsibility of selecting matters and documents to be brought to the board's attention ": AWA Ltd v Daniels (1992) 7 ACSR 759 at 867. More recently, in Australian Securities and Investments Commission v Rich [2003] NSWSC 85 at [51] [72], 174 FLR 128 at 141 7, Austin J has reviewed the authorities and considered the duties owed by a chairman of a listed company. See also: Australian Securities and Investments Commission v Vines [2003] NSWSC 1116 , 182 FLR 405.
Case: Breen v Williams [1995] HCA 63 , 186 CLR 71
Outcome: followed
A more generally expressed submission advanced by the Trustee that it was a part of the fiduciary duty owed by a director to make full disclosure is rejected. " The strong weight of judicial authority is that fiduciary duties are proscriptive rather than prescriptive; accordingly, a fiduciary does not have a positive duty to disclose information ": Australian Securities and Investments Commission v Citigroup Global Markets Australia Pty Ltd (No 4) [2007] FCA 963 at [375] , [2007] FCA 963 ; 160 FCR 35 at 88 per Jacobson J. Reference may also be made to one of the authorities there referred to by His Honour, namely Breen v Williams [1995] HCA 63 , 186 CLR 71. Gaudron and McHugh JJ there observed (at 113): In this country, fiduciary obligations arise because a person has come under an obligation to act in another's interests. As a result, equity imposes on the fiduciary proscriptive obligations -- not to obtain any unauthorised benefit from the relationship and not to be in a position of conflict. If these obligations are breached, the fiduciary must account for any profits and make good any losses arising from the breach. But the law of this country does not otherwise impose positive legal duties on the fiduciary to act in the interests of the person to whom the duty is owed. If there was a general fiduciary duty to act in the best interests of the patient, it would necessarily follow that a doctor has a duty to inform the patient that he or she has breached their contract or has been guilty of negligence in dealings with the patient. That is not the law of this country. Gummow J concluded (at 137 8): Fiduciary obligations arise (albeit perhaps not exclusively) in various situations where it may be seen that one person is under an obligation to act in the interests of another. Equitable remedies are available where the fiduciary places interest in conflict with duty or derives an unauthorised profit from abuse of duty. It would be to stand established principle on its head to reason that because equity considers the defendant to be a fiduciary, therefore the defendant has a legal obligation to act in the interests of the plaintiff so that failure to fulfil that positive obligation represents a breach of fiduciary duty. See also: Pilmer v Duke Group Ltd [2001] HCA 31 at [74] (per McHugh, Gummow, Hayne and Callinan JJ) and [127] (per Kirby J), [2001] HCA 31 ; 207 CLR 165 at 197 8 and 214; P &amp; V Industries Pty Ltd v Porto [2006] VSC 131 at [12] [25], 14 VR 1 at 4 6 per Hollingworth J; Dempsey G and Greinke A, ' Proscriptive fiduciary duties in Australia ' (2004) 25 Aust Bar Rev 1.