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summed up the conflict between an individual‘s personal liberty and the right of the
public to be protected from unscrupulous directors, and held that the individual right
should prevail. 310
From the discussions above, it seems that the personal liberty of the defendant is the
first concern of the UK courts, notwithstanding that the aim of the legislation is to
protect the public interest. In Australia, on the other hand, the court‘s focus seems to
be on the protection of the public interest and in preventing the corporate structures
from being used by individuals in a manner contrary to a proper commercial
standard. 311 Protection of the public is also one of the factors that the courts will
consider in order to determine the length of a disqualification order.
In Australian Securities and Investments Commission v Vines, 312 the making of a
disqualification order would have to reflect the seriousness of the contraventions and
considerations of the public, retribution and deterrence. In protecting the public from
errant directors through disqualification orders, it also has the effect of deterring
directors from abusing the privilege of limited liability, although it is not punitive. 313
This decision signifies that the purpose of disqualification is protection against
present and future misuse of corporate structures, but it is important to note that it is
not punitive in nature.
Therefore, the power is not fundamentally penal. But if the power to disqualify is exercised,
disqualification does involve a substantial interference with the freedom of the individual. It
follows that the rights of the individual must be fully protected.‖
310 This decision is also consistent with Re Barings plc (No 5), Secretary of State and Industry v
Baker [1999]1 BCLC 433 which stated although the proceedings are civil, the burden is a ‗heavy
one.‘ The reason for that is that disqualification proceedings are serious in being, as is often said,
of a penal or quasi-penal nature.
311 Australian Securities and Investments Commission v Donovan (1998) 28 ACSR 583 at [125-127].
312 (2006) 58 ACSR 298.
313 Adler v Australian Securities and Investments Commission (2003) 46 ACSR 504.
386