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The court has to deduce evidence of unfitness in relation to the relevant company
only and not to look at his conduct in any other companies. 298 In Re Barings plc (No
5), Secretary of State and Industry v Baker, 299 the court stated that it is not the test of
‗unfitness‘ for the purpose of section 6 to take into account whether the director
could have performed a management role elsewhere. The court, however, accepted
that this could be a relevant factor in the context of application for leave in section
17 of the CDDA 1986.
In order to be disqualified under section 206C of the Australian Corporations Act
2001, after a declaration for contravention of section 1317E has been made, the court
has to be satisfied that the order is justified. In determining whether disqualification
is appropriate, the court will look at the person‘s conduct in relation to the
management, business or any property of the corporation, or any other factors which
the court considers appropriate. 300 Therefore, matters which the court can take into
consideration in its decision are non-exhaustive and not limited to the person‘s
conduct. Cases have indicated factors that the court can consider in deciding whether
it is justified to make an order under sections 206C and 206D, including the nature of
the breaches, interests of the creditors, shareholders and employees, the person‘s
intention or state of mind, the person‘s appreciation of future breach, magnitude of
loss, the period of continuation of series of breach, the deterrence factor and many
others. 301 These considerations are also taken into account by the court to calculate
the period of disqualification.
298 Secretary of State for Trade and Industry v Gray [1995] 1 BCLC 276.
299 [1999] 1 BCLC 433 at 485.
300 See section 206C(2) and section 206D(3) Australian Corporations Act 2001.
301 Australian Securities and Investments Commission v Maxwell (2006) 59 ACSR 373;
Commissioner for Corporate Affairs v Ekamper (1987) ACLR 519; Australian Securities and
Investments Commission v Edwards (No 3) (2006) 75 ACSR 209; Australian Securities and
Investments Commission v Rich (2004) 50 ACSR 693.
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