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of trust or breach of duty in relation to a corporation instead of referring to
misfeasance like in the UK and Malaysia. The application for negligence under
section 598 can be extended to common law negligence where the person concerned
has not breach any fiduciary duty. 360
Consequent to the application, the court may examine the conduct of the director,
liquidator or officer and compel him or her to restore the money or property as the
court thinks just, or to contribute such sums to the assets of the company by way of
compensation. 361
11.6 Conclusion
Cases have indicated that what constitutes unfitness depends on the circumstances
and facts of each case. Directors who are in breach of their duty or commit actions
resulting in loss to creditors are guilty of misconduct. The court can find ‗unfitness‘
without the need to establish dishonesty or fraud because it is sufficient if a director
is negligent or ignorant when committing the act. Despite the different wording of
the statutes, cases in Australia have also pointed in the same direction, namely
whether the person in question has committed a breach under the Act which causes
losses to creditors. Due to similarities in their statutes as well as the motives
underlying the passing of the provisions, it submitted that parallel decisions will be
made by the Malaysian as well as the New Zealand courts.
Moreover, in the UK, disqualification orders set standards for directors‘ conduct, and
any person who falls below such standards will be punished. It will compel directors
or in relation to a person even though the person may have committed an offence in respect of the
matter to which the order relates."
360 See Property Force Consultants Pty Ltd (1995) 13 ACLC 1051; Daniels v Anderson (1995) ACSR
607.
361 See section 212 of the UK Insolvency Act 1986; section 305(1) Malaysian Companies Act 1965;
section 598 (4) Australian Corporations Act 2001. Section 598 (3) (a)- (d) of the Australian Act
states that "no order should be given unless the person has been given opportunity to give evidence
and call witnesses."
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