CORPORATIONS – directors’ duties – duty of care and diligence – s 180(1) of the Corporations Act 2001 (Cth) – alleged failure by managing director to tell board of termination of material agreements – consideration of hypothetical reasonable director – finding that managing director knew of possibility of termination – finding that hypothetical reasonable director would not have informed board of impending termination – factual foundation of case that managing director knew of actual termination not made out – no breaches of duty of care and diligence established
CORPORATIONS – continuous disclosure obligations – s 180(1) and s 674 of the Corporations Act – exposure of company by managing director to risk of adverse consequences – consideration of breach of director’s duty of care and diligence in said exposure – no allegation that company did breach s 674 of the Corporations Act – board lost opportunity to make disclosures about termination of material agreements – hypothetical reasonable director would have brought termination of material agreements to board’s attention, if known – no such knowledge held by managing director – factual foundation of managing director receiving copy of termination agreement not made out – no breaches of duty of care and diligence established
CORPORATIONS – misleading and deceptive conduct in relation to a financial product – s 180(1) and s 1041H of the Corporations Act – alleged failure by managing director to ensure company did not mislead market – announcement ‘potentially’ misled market as to ongoing supply to former customer – risk of exposure of company to breach of continuous disclosure obligations – hypothetical reasonable director would have prevented issue of misleading announcement – allegation that managing director knew of termination of ongoing supply agreement not made out – no breaches of duty of care and diligence established
CORPORATIONS – alternative plea – s 180(1) of the Corporations Act – whether managing director should have enquired as to status of material agreements before approving market announcement – hypothetical reasonable director would not have made such enquiries
EVIDENCE – standard of proof – where main witness called by each party unsatisfactory – use of objective factual surrounding material, inherent commercial probabilities and documentary evidence – drawing of inferences from available evidence
EVIDENCE – expert evidence – objections to admissibility of expert report – whether witness has necessary specialised knowledge – whether opinion based on specialised knowledge – objections overruled
Original article available at: https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2023/2023fca1009
For more information, see the original judgement.
