Insights

When is a person responsible as an “officer” of a company? ASIC v King [2020] HCA 4

In March 2020, the High Court changed the law concerning when a person is an “officer” of a corporation for the purposes of s.9 of the Corporations Act 2001 (Cth).

Until the decision in Australian Securities and Investments Commission v King [2020] HCA 4, (King) intermediate appellate courts had held that in order for a person to be an “officer” for these purposes, it was necessary that the person acted in an “office” of the company, in the sense of a “recognised position with rights and duties attached to it”.

The High Court’s decision in King swept away the limitation on the definition requiring an officer to “act in an office”; instead the courts’ future focus should be on whether the putative director has the necessary capacity to affect significantly the corporation’s financial standing by reason of his or her involvement in the management of the company, regardless of whether or not the person acts in an office of the company.

The paper available at this link discusses the decision in King and its consequences.

Matthew Brady QC

Higgins Chambers

19 June 2020