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1317H(2) and (3) must be taken into consideration; namely the profits, 128 or
diminution of the property value. 129 The court may make this compensation order
even though a pecuniary penalty order has been made under section 1317G.
Apart from the compensation order under section 1317H, the court has the option to
make the same order under section 588J. It would seem that there is an overlapping
of compensation orders for civil penalties against directors who contravene section
588G(2), although under section 588J there are no guidelines as to how damages
should be assessed. Since there are two sections providing the same remedies, the
applicant has the option to choose which provisions to use. 130 To avoid double
recovery, due to numbers of compensation orders available against directors for
contravening the same section, the courts when considering the appropriate amounts,
must take into consideration the compensation made under section 588M. 131
11.3.6 Criminal Liability for Insolvent Trading
Only Australia and Malaysia provide for criminal penalties for insolvent trading.
ASIC may institute criminal proceedings against directors for insolvent trading under
section 1317P of the Corporations Act 2001. Directors can still be found responsible
for criminal liability even though a compensation order or a declaration of
128 Section 1317H(2): ―In determining the damage suffered by the corporation or scheme for the
purposes of making compensation order, include profits made by any person resulting from the
contravention or the offence.‖
129 Section 1317H(3): ―In determining the damage suffered by the scheme for the purposes of making
compensation order, include any diminution of the value of the property of the scheme.‖
130 See section 588P of the Australian Corporations Act 2001. See also John Farrar Corporate
Governance Theories, Principles and Practice (3rd ed., Oxford University Press, South
Melbourne, 2008) at 167.
131 Section 588N: ―An amount recovered in proceedings under section 588M in relation to the
incurring of a debt by a company is to be taken into account in working out the amount (if any)
recoverable in:
(a) any other proceedings under that section in relation to the incurring of the debt; and
(b) proceedings under section 596AC in relation to a contravention of section 596AB that is
linked to the incurring of the debt.‖
338