Page 393 - Week 02 - Wednesday, 13 May 1992
Next page . . . . Previous page . . . . Contents . . . . Debates(HTML) . . . . PDF . . . .
The problem was that the company owed money to a number of creditors and once the director had cleaned out the accounts the creditors were left with nothing to pursue. Roffel was charged with theft under the Victorian Crimes Act and was convicted by a jury, but on appeal it was held that this was not theft because he had not dishonestly appropriated material; he had taken what he was entitled to take, so there was no dishonest appropriation there. The problem, of course, was that the creditors were left without the money that they were entitled to.
I have substantial doubts as to whether Mr Humphries's express provision which deals with dishonestly appropriating property of a corporation would solve the Roffel problem, although, as he says in his presentation speech, that is his goal, because, again, what must happen is that an officer must dishonestly appropriate property of the corporation for his own use or benefit or for any other use or purpose other than the purpose of the corporation.
I would have thought we have a better protection for that Roffel-type situation in the Australian corporations legislation, the Corporations Act, which is an Act of the Commonwealth which applies a single set of corporations laws to all parts of the Commonwealth. This is one of the most substantial pieces of law reform achieved in Australia in the last 20 or 30 years. It is, without any question, the largest piece of legislation in the Commonwealth. Members can see the hefty tome that I am currently holding. That is simply the Act, not a commentary on the Act. That is simply the Corporations Act.
It is an Act of some 1,369 sections. One tremors at the thought of the last Assembly debating such an Act. We would have been here for 20 years. It contains a general provision - - -
Mr Kaine: Especially if we had a division on every clause.
MR CONNOLLY: Yes, indeed, Mr Kaine; it is too frightening to contemplate. It contains a catch-all clause at section 232(2), which provides:
An officer of a relevant body corporate shall at all times act honestly in the exercise of his or her powers and the discharge of the duties of his or her office.
Mr Humphries: I referred to that in my speech.
MR CONNOLLY: You did indeed. That contains quite substantial penalties. What is significant is that the penalty provision specifically makes clear that there is a higher penalty if the dishonest intention was with the intention to deceive or defraud either the body corporate or creditors of the body corporate. That penalty provision really locks into the Roffel problem, where the money was taken out quite lawfully. It was not dishonestly appropriated from the company because Roffel had the ability to do that; but it was, or potentially could have been seen to have been, a fraud on the creditors because the creditors missed out because the person with authority to take the money did so, leaving no ability of recompense for those creditors.
There has been, I am advised, a fairly robust approach to this catch-all provision in recent years in relation to the conduct of the National Companies and Securities Commission, as it was, now the Australian Securities Commission. In the South Australian Supreme Court, in Grove v. Flavel in 1986, reported in
Next page . . . . Previous page . . . . Contents . . . . Debates(HTML) . . . . PDF . . . .