Re Etick Limited - [2006] WASC 111

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: RE ETICK LIMITED; EX PARTE MANSELL [2006] WASC 111

CORAM: MASTER NEWNES

HEARD: 30 MAY & 15 JUNE 2006

DELIVERED : 19 JUNE 2006

FILE NO/S: COR 70 of 2006

MATTER :Section 206G of the Corporations Act 2001 (Cth)

EX PARTE
MURRAY WILLIAM MANSELL
Plaintiff
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
Intervener

Catchwords:

Corporations - Application for leave to manage a corporation - Corporations Act 2001 - Section 206G - Relevant principles - Applicant convicted of offence of dishonesty - Whether inability of applicant to participate in management of the corporation will jeopardise interests of shareholders and employees - Turns on own facts

Legislation:

Corporations Act 2001 (Cth), s 206B(1)(a), s 206G

Result:

Application granted subject to conditions

Category: B

Representation:

Counsel:

Plaintiff: Mr N W McKerracher QC
Intervener: Mr J McGrath

Solicitors:

Plaintiff: Brennan & Co
Intervener: Australian Securities and Investments Commission

Case(s) referred to in judgment(s):

Adams v Australian Securities & Investments Commission (2003) 46 ACSR 68
Murray v Australian Securities Commission (1993) 12 ACLC 11

Case(s) also cited:

Borsboom v Australian Securities Commission, unreported; SCt of WA; Library No 970007; 17 January 1997
Chew v National Companies & Securities Commission (No 2) [1985] WAR 337
Childs v Australian Securities Commission (1996) 20 ACSR 196
Commissioner for Corporate Affairs (Vic) v Bracht [1989] VR 821
Cullen v Corporate Affairs Commission (NSW) (1988) 14 ACLR 789
Holpitt Pty Ltd v Swaab (1992) 33 FCR 474
Hosken v Australian Securities & Investments Commission (1998) 28 ACSR 542
Pace v Australian Securities & Investments Commission (1999) 17 ACLC 1674
Papotto v Australian Securities Commission [1999] WASCA 162
Platcher v Joseph (2003) 44 ACSR 277
Re Ansett (1990) 3 ACSR 357
Re Australian Limousin Breeders Society Ltd (1989) 7 ACLC 426
Re C & J Hazell Holdings Pty Ltd (1991) 4 ACSR 703
Re Jarrett (1999) 32 ACSR 23
Re Magna Alloys & Research Pty Ltd (1975) 1 ACLR 203
Re Marsden (1981) 29 SASR 454
Re Record Leather Manufacturers (Australia) Pty Ltd (1980) 5 ACLR 19
Re Shneider (1996) 71 FCR 69
Re Zim Metal Products Pty Ltd (1977) 2 ACLR 553

MASTER NEWNES: The plaintiff seeks an order under s 206G of the Corporations Act 2001 (Cth) ("the Act") granting him leave to manage a corporation, namely Etick Limited ("Etick"). The plaintiff is currently disqualified from managing a corporation by reason of his conviction, on 15 May 2003, in the District Court on a charge that, on or about 29 August 1998, with intent to defraud, by deceit or fraudulent means, he gained a benefit, namely, a cheque in the sum of $35,000 for Redrock Holdings Pty Ltd ("Redrock Holdings"). The plaintiff was fined $5000.
The principles to be applied on an application of this nature were not in dispute. They are conveniently collected in the judgment of Lindgren J in Adams v Australian Securities & Investments Commission (2003) 46 ACSR 68 where his Honour said (at 71):
"The following principles relevant to an application of the present kind have been consistently recognised and applied in the authorities:
1.The applicant bears the onus of establishing that the Court should make an exception to the legislative policy underlying the prohibition: Re Altim Pty Ltd [1968] 2 NSWR 762 ('Altim') at 764 as applied in Re Ferrari Furniture Co Pty Ltd [1972] 2 NSWLR 790 ('Ferrari') at 792; Re Macquarie Investments Pty Ltd (1975) 1 ACLR 40 at 42; Re Maelor Jones Pty Ltd (1975) 1 ACLR 4 at 13; Re Magna Alloys and Research Pty Ltd (1975) 1 ACLR 203 at 205; Re Zim Metal Products Pt Ltd (1977) 2 ACLR 553 ('Zim') at 555; In re Marsden (1981) 29 SASR 454 ('Marsden') at 460; Re Australian Limousin Breeders Society Ltd (1989) 7 ACLC 426 at 429‑430; Murray v Australian Securities Commission (1993) 12 ACLC 11 ('Murray') at 13; Pace v Australian Securities & Investments Commission (1999) 17 ACLC 1764 ('Pace') at [21]; Re Seymour [2002] TASSC 85 at [6].
2.That legislative policy is one of protecting the public, not one of punishing the offender: Altim at 764, as applied in Ferrari at 791‑792; Zim at 555; Murray at 13: Chew v National Companies and Securities Commission [1985] WAR 337 ('Chew') at 340‑341; Pace at [21]; Re Seymour at 2; Borsboom v Australian Securities Commission, unreported, Supreme Court of Western Australia, White J, 17 January 1997.
3.Another objective is to deter others from engaging in conduct of the particular kind in question: Chew at 340‑341; Zim at 555; Murray v ASC at 13; Pace at [21]; Re Seymour, above, at [6].
4.A further objective is the more general one of deterring others from abusing the corporate structure to the disadvantage of investors, shareholders and others dealing with a company: Re Marsden, above at 459; Zim at 555; Murray at 13; Re Magna Alloys at 205; Pace at [21]; Re Seymour, above, at [6].
5.The prohibition itself contemplates that there will be hardship to the offender. Therefore hardship to the offender alone is not a persuasive ground for the granting of leave: Chew at 340‑341; Re Maelor Jones Pty Ltd (1975) 1 ACLR 4 at 13; Murray at 14.
6.'The court in exercising its discretion will have regard to the nature of the offence of which the applicant has been convicted, the nature of his involvement, and the general character of the applicant, including his conduct in the intervening period since he was removed from the board and from management. Where, as here, the applicant seeks leave to become a director and to take part in the management of particular companies the court will consider the structure of those companies, the nature of their businesses and the interests of their shareholders, creditors and employees. One matter to be considered will be the assessment of any risks to those persons or to the public which may appear to be involved in the applicant's assuming positions on the board or in management', per Bowen CJ in Eq in Re Magna Alloys at 205, followed in Zim at 555‑556.
This passage does not purport to be an exhaustive statement of the matters appropriate to be taken into account by the Court as relevant to the exercise of its discretion under the section. Clearly, there can be no such exhaustive statement."
It is clear from the cases that the plaintiff bears the onus of establishing that the Court should make an exception to the legislative policy underlying the prohibition. The legislative policy is one of protecting the public and it is that consideration which is paramount. The plaintiff must show that protection of the public will not be compromised by the grant of leave sought. Whether to grant leave sought is a matter for the discretion of the Court and the discretion is at large, although it must be exercised in accordance with the scope and purpose of the Act and with the apparent legislative intent: Murray v Australian Securities Commission (1993) 12 ACLC 11 at 13.
The plaintiff is an accountant. He was employed by the State government from 1965 to 1972. In 1972 he went into private practice. He was subsequently finance director of a group of companies in Hong Kong involved in an air conditioning business. Upon his return to Australia in 1992 he took up a consultancy in business and finance until 1998. In 1998 he was employed as an accountant/bookkeeper for a group of companies known as the Progressive Group. It was in connection with his employment with the Progressive Group that the offence of which he was convicted occurred.
It seems that in 1998 the Progressive Group was experiencing financial problems. The directors considered that a restructure could save the group from liquidation and consideration was given to a merger with a third party, Redrock Holdings. The plaintiff was involved in the negotiations for the merger.
Part of the proposed merger involved amalgamating assets of the companies concerned and increasing cashflow by releasing equity tied up in the assets. The assets concerned included a boring machine owned by Mainline Equity Pty Ltd, a member of the Progressive Group. It was apparently proposed that a company, Progressive Civil Engineering Company Pty Ltd ("PCEC"), would become the trading entity for the amalgamated group. In order to refinance the boring machine it was represented as an asset of Redrock Holdings and hire purchase was obtained for the ostensible purpose of its purchase by another company in the Progressive Group. In settlement of the hire purchase transaction, the financier, Australian Guarantee Corporation ("AGC"), provided a cheque in the sum of $35,000 in the name of Redrock Holdings. The plaintiff, who was not a signatory on the Redrock Holdings' bank account, persuaded an officer of BankWest to allow him to endorse the cheque in favour of PCEC and it was banked in PCEC's account. In fact, the boring machine was subject to an existing encumbrance granted by Mainline Equity Pty Ltd to St George Bank and St George Bank took possession of the boring machine when the companies in the Progressive Group went into liquidation shortly after the transaction. AGC recovered the amount of the cheque from BankWest, which ultimately bore the loss of $35,000.
In her sentencing remarks, Kennedy DCJ (as her Honour then was) accepted that at the time of the offence the plaintiff was trying to keep the Progressive Group afloat, and that he believed the merger would go ahead and his actions would cause no detriment to anyone. Her Honour also accepted that the plaintiff got no personal benefit from the transaction.
As a result of his conviction, the plaintiff was disqualified from managing a corporation for a period of five years, pursuant to s 206B(1)(a) of the Act. That is, the plaintiff was disqualified until 15 May 2008.
At the time of his conviction, the plaintiff was employed by ComputerCorp Pty Ltd ("ComputerCorp"). He took up employment with ComputerCorp in 2000 as a consultant and shortly afterwards was appointed chief financial officer. In 2002 he was appointed chief operating officer.
When the plaintiff was charged with the offence in late 2001 he informed the managing director of ComputerCorp, Mr Smith, of that fact and subsequently also informed him of his conviction. Mr Smith was the person in charge of the day to day operations of ComputerCorp. In his own right and together with his wife as trustee of a family trust, Mr Smith also held just over 60 per cent of the issued shares in ComputerCorp. The remainder of the shares were held by a Mr Durston and a Mr Rickers. Mr Durston in his own right and through a family trust, held approximately 30 per cent of the shares and worked in the Melbourne office of the company. Mr Rickers held just under 10 per cent of the shares and worked in the Sydney office. Mr Smith and Mr Durston were the directors of ComputerCorp between 2000 and December 2005.
In about 2003, the board of ComputerCorp decided to expand into each State of Australia. The plaintiff was involved in finding and negotiating the acquisition of suitable businesses for that purpose. At the end of 2005, ComputerCorp had offices in each State of Australia and in the Australian Capital Territory. The turnover of the company had increased from $40 million in 2000 to $128 million at the end of 2005. By that stage, however, the board had concluded that the company required a substantial capital injection and it engaged the services of a consultant, among other things, to carry out an independent analysis of the financial position of ComputerCorp and obtain a possible buyer for the shares in the company.
In March 2006, the shareholders of ComputerCorp entered into an agreement to sell their shares to CCP (Equity) Pty Ltd, a company controlled by Etick which is a public company listed on the Australian Stock Exchange ("ASX"). The shares are ultimately to be acquired by Etick. As at the date of the execution of the share sale agreement, Messrs Smith and Durston resigned from their employment with ComputerCorp, and provided their resignations as directors to take effect upon completion. Mr Rickers resigned from his employment in April 2006. Mr Domenic Martino has been appointed a director of ComputerCorp. Etick has effectively gone into possession of the business and the plaintiff has been given responsibility by Mr Martino for its continuing day to day operations under Mr Martino's direction.
It is proposed that, upon the completion of the acquisition of the ComputerCorp shares, Etick will change its name to ComputerCorp Ltd ("CCL"). Two of the current directors of Etick will then resign and one, a Mr Page, will continue. Mr Kevin Dundo, a solicitor, and Mr Domenic Martino, a company director and chartered accountant, will be appointed as non‑executive director and chairman respectively. The principal activity of CCL will be the business currently conducted by ComputerCorp.
At the current time, ComputerCorp employs 264 staff throughout Australia, with 130 staff members employed in the head office in Perth. In addition to offices in each Australian State and the Australian Capital Territory, the company has regional offices in Kalgoorlie and in Bunbury. According to Mr Martino, it is not expected that with the completion of the acquisition by Etick there will be any major disruption to staff or staffing levels. The forecast revenue for the financial year ended 30 June 2006 is in excess of $150 million.
In an affidavit filed in support of this application, Mr Martino says that of major importance to the success of CCL is the ability to have an executive director running day to day operations, including making day to day decisions in accordance with company policy. He says that from discussions with Mr Smith he believes that the plaintiff's knowledge of the operations of ComputerCorp, and the high regard in which he is held by management, creditors, debtors, vendors of IT infrastructure and financial institutions, makes the plaintiff the ideal person to manage the company.
According to Mr Martino, it was in the belief that he would have the plaintiff's support at a board level that he negotiated the purchase of ComputerCorp. Mr Martino says that the appointment of the plaintiff as executive director of CCL is essential to its future success as he does not have, and neither of Mr Page or Mr Dundo has, any knowledge of the IT industry. Their expertise is in the area of accounting and legal services. He says that he, Mr Page and Mr Dundo are all aware of the plaintiff's conviction and his current disqualification from managing a corporation.
Mr Martino says it is expected the plaintiff will report to the board on a monthly basis and that all statutory requirements of the ASX will be met by the appointment of a company secretary. It is also expected that while the plaintiff will have the ordinary powers of an executive director, policy for acquisition and future expansion of the company which may affect its share price will be required to be passed at meetings of the entire board. CCL will also have to comply with the Corporate Governance Council's principles and the listing rules of the ASX.
Mr Martino says that from his discussions with Mr Smith he believes the company would find it very difficult to employ the services of one person to replace the plaintiff if this application were to be unsuccessful. He has been told by Mr Smith that the company would have to employ at least two people to perform the functions that would be performed by the plaintiff and that locating two people experienced in the relevant finance and operational areas, and also specifically conversant with the IT industry and the company's vendors and customers, would be "extremely problematic". It is also likely to take considerable time to locate any replacements and that may significantly affect the company's profitability and therefore its share price. None of the current staff of ComputerCorp is at a sufficiently senior level to fill the role.
Mr Martino says that it is likely replacement employees could only be found on the east coast of Australia but it is not financially viable for CCL to relocate to the east coast due to the infrastructure in place in Perth, the cost of staff replacement and the destabilisation of the company. Moreover, any relocation to the eastern seaboard would lead to the redundancy of the majority of the 130 employees in the Perth office. According to Mr Martino, there is, in any event, no certainty that replacement employees could be found even on the east coast of Australia.
There was also in evidence an affidavit of Mr Smith, the former managing director of ComputerCorp. Mr Smith attributes much of the commercial success of ComputerCorp to the plaintiff. He says that the plaintiff's understanding of, and approach to, the financial and commercial considerations of the business have greatly assisted the business to expand in an integrated, orderly and logical fashion. Mr Smith says the plaintiff has followed the directions of the board in a pragmatic way in implementing the strategic expansion and development of the business throughout its regional and, subsequently, national divisions, and has always maintained and respected the employer/employee relationship between them. He says he has always found the plaintiff to be straightforward, professional and honest in his dealings with the company, its vendors, customers and bankers.
Mr Smith considers CCL would benefit from the plaintiff's extensive general and specific industry knowledge and his reputation in the market, including with vendors and bankers, as well as his detailed knowledge of the company's expansion and development strategies. Mr Smith says he believes that if the plaintiff is not able to take up a management position, it would have a destabilising effect on the staff of the company, the senior members of which have worked with the plaintiff for a considerable period of time, and possibly on its profitability. Mr Smith considers that two new employees would be required to replace the plaintiff and even then they would not have the plaintiff's extensive knowledge of ComputerCorp's business.
In an affidavit he has sworn in support of this application, the plaintiff says that none of the other current employees of the company have a working knowledge of the entire business. His own activities in his capacities as chief financial officer and chief operations officer have required him to be informed about, and to understand, all divisions of the business and its operation as an integrated whole. He says he has spent a good deal of time travelling around Australia visiting each of the offices and he has worked closely with the more senior members of the current staff of ComputerCorp. He has also come to know the staff in each of the divisional offices. The plaintiff says that staff turnover is quite low and the more senior staff is fairly stable. He does not expect that to change with the acquisition of the business by Etick.
The plaintiff has deposed to the circumstances of his two bankruptcies, the first in December 1992 and the second in September 1996. The plaintiff was discharged from his first bankruptcy in December 1995. The second bankruptcy therefore occurred some nine months after he had been discharged from the first bankruptcy.
The plaintiff says that the first bankruptcy followed the insolvency of a number of companies of which he was a director and for which he had given personal guarantees.
After the first bankruptcy, the plaintiff was employed for approximately six months and then secured part‑time consultancy work as an accountant. He had no assets as a result of his divorce and the ensuing property settlement. The plaintiff says that, in about mid‑1995, he was associated with a business of which his partner was one of the owners. In his capacity as a broker for raw materials for the business, he was involved in a dispute with a wholesaler over a debt in an amount of some $6000 to $7000. The plaintiff says he believed he had a good defence to the claim but because of his financial circumstances he could not defend the summons or the petition for bankruptcy.

The plaintiff says that he considers both bankruptcies personally embarrassing. In his affidavit he has also expressed remorse for the actions which led to his conviction, actions which he says were out of character and which he attributes to lack of judgment and a belief that the merger of the Progressive Group and Redrock Holdings would undoubtedly proceed. He says that his wrongdoing has caused embarrassment to him and to his family and friends.
It was submitted on behalf of the plaintiff that while the offence of which he was convicted was a serious offence, it is against a background of otherwise good character. Since the time when the offence was committed in 1998, the plaintiff has been employed for approximately six years in responsible positions in ComputerCorp, and the managing director of the company, to whom he reported, speaks highly of his work and character.
It was submitted that it is also significant that, knowing of the conviction, the proposed directors of CCL, Messrs Martino, Page and Dundo, who are experienced professional men and company directors, have trust and faith in the plaintiff and are anxious to secure the plaintiff's services as chief executive officer of the company. The position which it is proposed the plaintiff will have as CEO comes with the restraints of reporting to a board composed of experienced accountants and a senior lawyer, and the reporting requirements of a public listed company.
The plaintiff has accepted his wrongdoing and has expressed remorse for the actions resulting in his conviction. The two bankruptcies should not be regarded as two isolated incidents reflecting any propensity in relation to his business activities, the second being significantly affected by his financial circumstances following the first.
It was submitted that if the plaintiff is unable to take up a position of management in CCL, it is likely that substantial hardship will be caused to existing employees of the company, at least in its Perth office and the financial fortunes of the company may be adversely affected. While the plaintiff was not irreplaceable, there were real uncertainties as to whether he could be satisfactorily replaced, at least without substantial additional cost to the company and very significant disruption, possibly affecting the company's financial position. On the other hand, if the application were granted his work would be supervised by experienced professionals as directors of the company and he would be subject to the regulations applying to public companies listed on the ASX.
The application was opposed by ASIC. Counsel for ASIC submitted that the circumstances of the plaintiff's conviction had to be viewed in the light of the predominant need to ensure the protection of creditors and shareholders of the plaintiff. The offence was a serious one involving dishonesty. While it appeared from the sentencing remarks of the trial Judge that the plaintiff had contended at trial that he acted as he did because he believed that the merger of the companies would proceed, equally the trial Judge had suggested that at the time there was no reasonable basis to hold that belief. It was also significant in viewing the plaintiff's background that he had twice been bankrupt.
It was submitted on behalf of ASIC that there was also evidence to suggest the plaintiff had taken part in management of the Progressive Group while he was bankrupt and counsel referred to the evidence in relation to the activities which the plaintiff had undertaken while employed by that company. Counsel also submitted that there was reason to believe the plaintiff had been involved in the management of ComputerCorp since his conviction and again pointed to the description of the activities undertaken by the plaintiff, as set out in the plaintiff's affidavit and the affidavit of Mr Smith.
Counsel for ASIC submitted that, in light of the plaintiff's background, the size and nature of the business of CCL was an important factor on this application. Mr Martino had said that the proposed directors had no knowledge of the IT business and that two of the three directors would be located on the eastern seaboard. There would be only one director in Perth. The company employed a large staff over a number of offices and it appeared from Mr Martino's affidavit that the plaintiff, as chief executive officer, would have the day to day running of the company's operations. That, it was submitted, would effectively be to give the plaintiff free reign in the day to day operations of a substantial public company.
Counsel argued that while hardship to others was a significant factor, it was not determinative. It was clear on the evidence that it would not be impossible to find someone else, or others, to fill the role envisaged for the plaintiff. The evidence did not demonstrate that the company would be unable to continue to operate successfully with the plaintiff acting in some subordinate role, rather than in a management role.
I was referred by Senior Counsel for the plaintiff to a number of cases in which leave had been granted where the applicant concerned had been convicted of an offence, or of offences, involving dishonesty. In the end, however, as I think counsel acknowledged, each case depends on its particular facts and such cases are of limited assistance.
There is no doubt that the offence of which the plaintiff was convicted was a serious one. While the plaintiff did not gain personally by it, it occurred in the course of the plaintiff's employment as an accountant in a misguided attempt to assist his employer in maintaining its solvency and that of its associated companies. A significant loss was suffered by BankWest as a result of the offence. The legislative policy behind s 206B(1)(a) of the Act is that in normal circumstances it is in the public interest for the protection of the public that a person who has been convicted of an offence of such a nature should not be permitted to participate in the management of a company for a period of five years. That, of course, is a factor that must be given due weight, so that a person will not readily be relieved from the period of disqualification imposed by the Act and cogent grounds must be shown to justify an exception to it.
In this case, it is relevant that the plaintiff was 57 years of age at the time of his conviction and already had a long working life behind him. He has no other convictions. The offence is, I think, to be regarded as an isolated incident and I consider there is little likelihood that the plaintiff would commit any other offences of dishonesty. He has, since 2000, worked for ComputerCorp in positions of responsibility and gained the confidence and respect of the former managing director and majority shareholder, Mr Smith, to whom the plaintiff reported until a few months ago.
I should say that I am not satisfied the evidence before me indicates that the plaintiff acted in a management capacity in the Progressive Group while he was bankrupt or that he has done so in ComputerCorp following his conviction. I consider that the plaintiff's role, while in each case a senior and responsible one, fell short of that.
I accept that the plaintiff has been an important element in the commercial success of ComputerCorp and that his knowledge and experience is of considerable value to the business. I also accept that it is likely to be difficult, and costly, to replace him if he is unable to undertake a management role in CCL. Just how serious the ramifications of those difficulties are likely to be is hard to assess with any precision. The evidence is, perhaps inevitably, in very general terms, but I accept that at least in the short term the inability of the plaintiff to assume a management position would be likely to cause substantial instability in the management of CCL and may significantly affect its economic fortunes. That, in turn, may well affect the position of current employees and shareholders.
While, therefore, the consequences may not turn out to be as dire as suggested in the evidence, I accept that the interests of shareholders and employees of CCL may well be adversely affected to a substantial degree if the plaintiff were not permitted to participate in the management of the company.
It is the case that the proposed directors of CCL, Mr Page, Mr Martino and Mr Dundo, do not have specific knowledge or experience in the IT industry, but they are experienced company directors with substantial backgrounds in accounting and law. Mr Page formerly practised as an accountant and has since held roles as a director and head of equity capital markets for a number of broking firms and is the co‑founder of an investment bank, Arthur Phillip Pty Ltd. Mr Martino is a chartered accountant. He was formerly the managing partner of Deloitte Touche Tohmatsu in New South Wales and, from 2001 to 2003, the CEO of Deloitte Touche Tohmatsu in Australia and a member of its global executive committee. Mr Martino is a director of two public companies. Mr Dundo is an experienced commercial lawyer who practises in Perth, and, in addition, he is a Fellow of the Australian Society of Certified Practising Accountants and a member of the Australian Institute of Company Directors. He is a non‑executive director of two public companies. Mr Dundo will be based in Perth and Messrs Page and Martino will be based on the east coast of Australia. It can, I think, be taken that they are each fully aware of their responsibilities to ensure the proper management of CCL and that they are clearly qualified to discharge those responsibilities.
On balance, I consider that leave should be granted. I would not, however, extend the leave to the appointment of the plaintiff as a director of the company. In my view, on an application of this nature the grant of leave should go no further than is reasonably required in the circumstances. I do not consider that the appointment of the plaintiff as a director is reasonably required in the present circumstances. It seems to me, and Senior Counsel for the plaintiff confirmed in the course of argument, that the company can obtain the benefits of the plaintiff's knowledge and experience without his appointment to the board. It is, moreover, appropriate for the protection of the public that the plaintiff should be subject to the control of, and report to, a board of which he is not a member.
The grant of leave should also be subject to conditions. I accept the submission of ASIC that the proposed management role of the plaintiff is not subject to sufficient constraints to ensure the protection of the public.
I have, very helpfully, been provided with conditions that have been agreed between ASIC and the plaintiff as conditions that would be appropriate should leave be granted. The agreed conditions depend on whether the plaintiff is granted leave to be appointed a director or in a more limited capacity. On the basis that the plaintiff is given leave in a capacity other than as a director, the conditions are:
(a)the plaintiff provide monthly financial reports to the board of directors of Etick;
(b)within 12 months the plaintiff attend an ASIC approved continuing education course relating to the duties and responsibilities of managers under the Act.
In the circumstances, I consider those conditions to be entirely appropriate. Accordingly, subject to those conditions, I would grant leave to the plaintiff to take part in the management of Etick.