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Regal (Hastings) Ltd v Gulliver [1942] 1 All ER 378 Royal Brunei Airlines Sdn Bhd v Philip Tan Kok Ming[1995] 2 AC 378 Rubin v Gunner [2004] 2 BCLC 110 Salomon v Salomon & Co [1897] A.C. 22 Secretary of State for Trade and Industry v Becker [2003] 1 BCLC 555 Secretary of State and Industry v Goldberg [2004] 1 BCLC 597 Secretary of State and Industry v Gray[1995] 1 BCLC 276 Secretary of State for Trade and Industry v Taylor [1997] 1 WLR 407 Smith, Stone and Knight Ltd v The City of Birmingham [1939] 4 All ER 116 Specialised Livestock Imports Ltd v Borrie CA 72/01, 28 March 2002 Stonegate Securities Ltd v Gregory [1980] 1 Ch 576 Third Chandris Shipping Corporation v Unimarine S.A [1979] Q.B 645 Transvaal Lands Co v New Belgium (Transvaal) Land and Development Co [1914] 2 Ch 488 Trendtex Trading Corp v Credit Suisse [1982] AC 679 364 Trevor v Whitworth (1887) 12 App Cas Twinsectra Ltd v Yardley and others [2002] 2 AC 164 250 362 201, 203, 204, 220, 329 251 232 4, 11, 12, 73, 76, 77, 79, 80, 88, 89,92, 109, 115 , 145 191 381 381, 382, 384, 391 240, 288 111 218 177, 187 393 329 154, 157, 158, 163 xxiv
Ultraframe (UK) v Fielding & Ors [2005] EWHC 1638 Wah Tat Bank v Chan [1975] AC 507 Waimiha Sawmilling Co Ltd v Waione Timber Co Ltd (1962) AC 101 West Mercia Safety Ltd (in liq) v Dodd(1988) BCLC 250 Williams v Natural Life Health Foods Ltd[1997] 1 BCLC 131 Winkworth v Edward Baron Development Co Ltd[1986] 1 W.L.R. 1512 110 215 298 84, 192, 196 215, 216, 217, 220 84, 87 Woolfson v Strathclyde Regional Council 1978 S.L.T. 159 109 xxv
Page 1 and 2: http://researchcommons.waikato.ac.n
Page 3 and 4: ABSTRACT This study examines the le
Page 5 and 6: TABLE OF CONTENTS ABSTRACT i ACNOWL
Page 7 and 8: CHAPTER 5 THEORY OF THE CORPORATION
Page 9 and 10: 7.3.3.3 Distribute its Capital to M
Page 11 and 12: 10.2.5.1 Meaning of Insolvency 10.2
Page 13 and 14: 10.6.2.2 Carrying on of any Busines
Page 15 and 16: CHAPTER 12 CONCLUSION AND RECOMMEND
Page 17 and 18: CLC Australian Company Law Cases CL
Page 19 and 20: Stanford LR Stanford Law Review Ste
Page 21 and 22: Facia Footwear Ltd (in administrati
Page 23 and 24: Re Avon Chambers Ltd [1978] 2 NZLR
Page 25: Re Produce Marketing Consortium Ltd
Page 29 and 30: Mountford v Tasman Pacific Airlines
Page 31 and 32: Australia 3M Australia Pty Ltd v Ke
Page 33 and 34: Linton v Telnet Pty Ltd (1999) 30 A
Page 35 and 36: Malaysia Abdul Aziz bin Atan v Lada
Page 37 and 38: Perman Sdn Bhd & Ors v European Com
Page 39 and 40: Other Jurisdictions Singapore Rahj
Page 41 and 42: Companies Act 2006 Section 60(3)(c)
Page 43 and 44: Section 993 Section 993(2) Section
Page 45 and 46: Insolvency Act 1985 37, 70 Insolven
Page 47 and 48: Section 251 255 Part II Schedule 6
Page 49 and 50: Section 52(1) Section 52(2) Section
Page 51 and 52: Section 272(2) Section 272(2)(a) Se
Page 53 and 54: Section 385(4)(b) Section 385(4)(b)
Page 55 and 56: AUSTRALIA Absent Debtors Act (NSW)
Page 57 and 58: Section 206D(1)(b)(b)(ii) 374 secti
Page 59 and 60: Section 588FE(2)(a) Section 588FE(2
Page 61 and 62: section 588H (5) 241 Section 588H(6
Page 63 and 64: Section 598(3)(b) Section 598(3)(c)
Page 65 and 66: Bankruptcy Act 1967 MALAYSIA Sectio
Page 67 and 68: Section 130A(6) 391 Section 131 221
Page 69 and 70: Companies Regulation 1966 Regulatio
Page 71 and 72: CHAPTER 1 THE STRUCTURE OF THE THES
Page 73 and 74: A discussion of directors’ duties
Page 75 and 76: The far-reaching implication of cor
Page 77 and 78:
2.2.1 The United Kingdom The common
Page 79 and 80:
2.2.3 Australia Australia has been
Page 81 and 82:
CHAPTER 3 LITERATURE SURVEY - AN OV
Page 83 and 84:
shareholders, had failed to mitigat
Page 85 and 86:
was mainly responsible for the chal
Page 87 and 88:
3.3 Interests in the Company-Shareh
Page 89 and 90:
contributed by the shareholders and
Page 91 and 92:
Statutes have attempted to address
Page 93 and 94:
how the matter should be dealt with
Page 95 and 96:
4.2 Development of Corporate and In
Page 97 and 98:
colonies. 14 The emergence of compa
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originally incorporated in order to
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usiness fraud. 42 In 1825, the Bubb
Page 103 and 104:
Companies Act also reveals providin
Page 105 and 106:
Companies Ordinance 1953 of Sabah a
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In 1977, the Cork Committee was app
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the Committee foresaw difficulty du
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operation and termination of a comp
Page 113 and 114:
enforceability of security interest
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procedure, and dispensed with the o
Page 117 and 118:
The creditors‟ protection princip
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shareholders and on personal bankru
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directors as trustees. 162 Members
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4.3.3 Development of Insolvency Leg
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In Australia, the government respon
Page 127 and 128:
appointment of an administrative re
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the current statutes were not effic
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insist on protection to directors i
Page 133 and 134:
and judgment to run the company. 21
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due to the difficulty in obtaining
Page 137 and 138:
The Australian Law Commission in 19
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instead, enacted section 135 253 in
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4.5 Conclusion Malaysia, New Zealan
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CHAPTER 5: THE THEORY OF THE CORPOR
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needs someone to run it on its beha
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The implication of the decision is
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English decisions as guidance and t
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Shareholders who have to incur high
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interests of shareholders by maximi
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situation, directors have a duty to
Page 157 and 158:
concluded purchasing goods from thi
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stipulates directors “may conside
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subsidiary and may continue to pros
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A holding company may use a subsidi
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section 187 of the Australian Corpo
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its holding company), act in a mann
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is just and equitable, to make an o
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Syndicates (NZ) Limited (in liq) 13
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a) Extent to which the Related Comp
Page 175 and 176:
That the management did not differe
Page 177 and 178:
equirement of insolvency and it doe
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The House of Lords in Woolfson v St
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subsidiary. Abdul Malik J held that
Page 183 and 184:
defendant company. During a meeting
Page 185 and 186:
Uniphoenix Corporation Bhd v Raymon
Page 187 and 188:
justice alone is not sufficient; th
Page 189 and 190:
lenders, employees, suppliers and c
Page 191 and 192:
company and as the residual claiman
Page 193 and 194:
The claim that shareholders‟ righ
Page 195 and 196:
particularly lack of effective mana
Page 197 and 198:
management of the companies. Credit
Page 199 and 200:
players‟ interests intertwine wit
Page 201 and 202:
important for directors to build lo
Page 203 and 204:
Despite having included favourable
Page 205 and 206:
at the intersection of a number of
Page 207 and 208:
Directors must weigh any particular
Page 209 and 210:
Directors will also enlist the serv
Page 211 and 212:
Contractarians regard employees in
Page 213 and 214:
terms to their liking, they either
Page 215 and 216:
to boycott the company. 134 The com
Page 217 and 218:
On the other hand, the duty owed to
Page 219 and 220:
and experiences in order to dischar
Page 221 and 222:
CHAPTER 7: A CONCEPTUAL ANALYSIS OF
Page 223 and 224:
Economists divided real capital whi
Page 225 and 226:
the transformation of shares as rea
Page 227 and 228:
the company‟s ability to pay its
Page 229 and 230:
purchase or will not become insolve
Page 231 and 232:
available where special resolution
Page 233 and 234:
The idea that maintaining share cap
Page 235 and 236:
must be satisfied by the company in
Page 237 and 238:
7.4 Conclusion The doctrine of capi
Page 239 and 240:
and once a resolution is passed, to
Page 241 and 242:
The term 'insolvency' has also long
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equivalent to medical negligence ca
Page 245 and 246:
meaning of inability to pay debts.
Page 247 and 248:
It is important to distinguish as t
Page 249 and 250:
long as the accounts give true and
Page 251 and 252:
current assets must be taken stock
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cases the presumption of insolvency
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It is interesting to note in reachi
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CHAPTER 9 THE COMMON LAW DUTIES OF
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Voluntary creditors can be divided
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are not personally liable for any l
Page 263 and 264:
confidence, a trustee who has been
Page 265 and 266:
interests of various parties in the
Page 267 and 268:
overriding duty is to the sharehold
Page 269 and 270:
to look at the directors‟ purpose
Page 271 and 272:
9.3.3 Duty not to Fetter Discretion
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The decisions of the Federal Court
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case, directors should disclose the
Page 277 and 278:
misconception that the case law and
Page 279 and 280:
other reference as to the developme
Page 281 and 282:
Australia and Malaysia have express
Page 283 and 284:
out “ ...the judgment is in the b
Page 285 and 286:
the prospect of success as well as
Page 287 and 288:
judge adopted the principle of iden
Page 289 and 290:
individual trading through a compan
Page 291 and 292:
liability can be imposed on them wh
Page 293 and 294:
liquidators when it is insolvent. C
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CHAPTER 10 DIRECTORS’ DUTY TO PRE
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Malaysia did not make any changes o
Page 299 and 300:
interpretation of these provisions.
Page 301 and 302:
sum of money that is owed or due.
Page 303 and 304:
Hence, action can be brought agains
Page 305 and 306:
Directors in Australia can be held
Page 307 and 308:
to the director to prove that he or
Page 309 and 310:
expect that the company was solvent
Page 311 and 312:
In the case of Secretary of State f
Page 313 and 314:
trading at a deficit. 64 In other w
Page 315 and 316:
maintained in section 213 of the In
Page 317 and 318:
not „a party‟ if he knew that m
Page 319 and 320:
econcile the two judgments with one
Page 321 and 322:
carrying it on (whether because of
Page 323 and 324:
10.3.1.3 For any other Fraudulent P
Page 325 and 326:
company. In this aspect, section 21
Page 327 and 328:
to Australia and New Zealand which
Page 329 and 330:
even though it was evident from the
Page 331 and 332:
the steps taken were with the aim o
Page 333 and 334:
decisions. 150 Therefore, directors
Page 335 and 336:
The Law Commission proposed that th
Page 337 and 338:
to reform the law, namely to reduce
Page 339 and 340:
A similar issue was raised in the E
Page 341 and 342:
The decision was later upheld by th
Page 343 and 344:
10.4.3 Duty in relation Obligation
Page 345 and 346:
fraudulent purpose.” 201 Although
Page 347 and 348:
from the carrying on of the busines
Page 349 and 350:
The first civil version of the inso
Page 351 and 352:
amounts. 223 In Hussein v Good, 224
Page 353 and 354:
of law of contract. The court must
Page 355 and 356:
defendant. 244 Therefore, a directo
Page 357 and 358:
additional capital, as well as a re
Page 359 and 360:
trading without any other action ta
Page 361 and 362:
Another defect of the section is in
Page 363 and 364:
argue that there are reasonable gro
Page 365 and 366:
10.6.2 Responsibility for Fraudulen
Page 367 and 368:
Siow Yoon Keong v H Rosen Engineeri
Page 369 and 370:
The courts have acknowledged that t
Page 371 and 372:
The defendant in the case relying o
Page 373 and 374:
To date, there have been few cases
Page 375 and 376:
ability of the company to pay off i
Page 377 and 378:
can be disqualified from taking par
Page 379 and 380:
power to do so is an archaic equita
Page 381 and 382:
is for a short period of time. This
Page 383 and 384:
ights against the company are froze
Page 385 and 386:
involves a situation where the comp
Page 387 and 388:
11.2.3 Winding-up Liquidation is a
Page 389 and 390:
11.2.3.1 Effects of Successful Avoi
Page 391 and 392:
transactions, 59 the provisions cle
Page 393 and 394:
11.2.3.1.2 Recovery from Third Part
Page 395 and 396:
ecover the proceeds of sale or to p
Page 397 and 398:
order. 83 If the value of the asset
Page 399 and 400:
Without this class action, the unse
Page 401 and 402:
the power to apply for a compensati
Page 403 and 404:
defraud, which implies their culpab
Page 405 and 406:
also be enforced by the company. 11
Page 407 and 408:
The court has the power if it think
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contravention or pecuniary penalty
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discretion to order the director‘
Page 413 and 414:
Marketing Consortium (No 2) 147 cle
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discovered that the director had en
Page 417 and 418:
compensatory. 163 Damages are asses
Page 419 and 420:
of causation similar to torts in as
Page 421 and 422:
ecause the court considered that it
Page 423 and 424:
It should be noted that Re Cyona Di
Page 425 and 426:
11.3.7.2.3 Duration The court also
Page 427 and 428:
contribution order is made to the
Page 429 and 430:
This is similar to the case of frau
Page 431 and 432:
company is using funds belonging to
Page 433 and 434:
Since section 304(1) originates fro
Page 435 and 436:
11.3.8.2 Problems of Enforcement/Pr
Page 437 and 438:
However, extracting promise of inde
Page 439 and 440:
In relation to an action against a
Page 441 and 442:
Investments Commission is entitled
Page 443 and 444:
The position in Australia has clear
Page 445 and 446:
Disqualification on the grounds of
Page 447 and 448:
As a result of the recommendations
Page 449 and 450:
exercised by the Registrar or the O
Page 451 and 452:
actions which are committed with a
Page 453 and 454:
The court has to deduce evidence of
Page 455 and 456:
11.4.2.1 Standard of Proof Disquali
Page 457 and 458:
11.4.2.2 Court’s Order Section 6
Page 459 and 460:
of disqualification. 322 However, t
Page 461 and 462:
mitigating factors considered by th
Page 463 and 464:
11.5 Other Remedies 11.5.1 Mareva I
Page 465 and 466:
for under the Act. 348 The action p
Page 467 and 468:
of trust or breach of duty in relat
Page 469 and 470:
CHAPTER 12 CONCLUSION AND RECOMMEND
Page 471 and 472:
The separate legal personality conc
Page 473 and 474:
deemed to be an alien concept to Br
Page 475 and 476:
positive action to minimize losses
Page 477 and 478:
insolvent. In Malaysia, there is no
Page 479 and 480:
BIBLIOGRAPHY BOOKS and ARTICLES AHM
Page 481 and 482:
BENNETT, Howard, 'Late Floating Cha
Page 483 and 484:
COBURN, Niall F, 'Insolvent Trading
Page 485 and 486:
http://ssrn.com/abstract=988944 at
Page 487 and 488:
FISHER, Gregory, LEE , Janet and JO
Page 489 and 490:
GUNASEKARA, Gehan and TOY, Alan, 'L
Page 491 and 492:
HOPT, Klaus J., 'Comparative Compan
Page 493 and 494:
KEAY, Andrew and Murray, Michael, '
Page 495 and 496:
McCHESNEY, Fred S., 'Economics, Law
Page 497 and 498:
OTTOLENGHI, S, 'From Peeping Behind
Page 499 and 500:
ROSS, Mike, Corporate Reconstructio
Page 501 and 502:
SCHWARTZ, Alan, ‗A Normative Theo
Page 503 and 504:
WALTERS, Adrian, 'Void Dispositions
Page 505 and 506:
WORTHINGTON, Sarah, 'Subrogation Cl
Page 507 and 508:
REPLIES TO EXAMINERS APPENDIX 1 Pag
Page 509 and 510:
Page 220-it is asserted that direct
Page 511 and 512:
What are the criteria for determini
Page 513 and 514:
addition it provides incentive for
Page 515 and 516:
See also Secretary of State for Tra
Page 517 and 518:
Most jurisdictions in Australia hav
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