Forty two International Pty Limited v Barnes (2014) FCA 85
Development in Australian corporation law
After the evaluation of this case, it is analyzed that the corporation law should be developed for saving the money of different financers of an organization. Additionally, before the acquisition, all the liabilities should be provided to acquire firm (Barber, 2014). This change in Corporation law will help the applicants to provide the right value of the money after the acquisition. In this case, Bluefreeway is an organization which wants to acquire two firms ‘FTI’ and ‘Gang of 4’ under the share purchase agreement (SPA). After this, Bluefreeway identified that there is an involvement of the applications that provided finance in CMUK project that is a software program (Matthew, 2015). They have to finance in the CMKU with the amount of $16m to the FTI. Bluefreeway acquired the company and tried to develop the business area. After taking this decision, the Australian companies will be liable to pay different applicants.
The applicant of CMUK claimed on Bluefreeway to provide the amount of finance to the applicants. It is also not informed to Bluefreeway that they will pay the amount to the applicants. The applicants claimed that Bluefreeway should provide the amount of damage to the respondents also because it is conducted in the SPA (Mayanja, 2014). The government of Australia should also take the decision to provide duties and responsibilities for saving the investors. The directors of FTI and Gang of 4 had breached his duties to provide financial information of the company and the liabilities of the company not clearly defined. According to the applicants, Bluefreeway damaged the respondents by breaching different fiduciary and statutory duties (O’Faircheallaigh, 2013). In these duties, the respondents have rights to get the benefits that were gained by FTI in the financial year 2005 to 2007 such as license fee, increase in obligations, etc. The Corporation act also includes different duties in section 181 or 588G where the director has the responsibility to pay the liabilities. In this case, this is the duty of FTI to provide all the money to different financers from license fee amount. The decision of the court is according to the Australian corporate law (Boughey, 2013). According to the corporation act, the applications provided the finance to the directors of FTI and Gang of 4. In this case, it was the duty of directors of FTI and Gang of 4 as there is no duty of the director of Bluefreeway. So, the court rejected these claim and it is suggested that Bluefreeway is responsible for fiduciary and statutory duties (McQueen, 2016). After the change in corporation law of Australia, it is possible that the applicants can claim for their invested money.
Barber, F., 2014. Indirectly directors: Duties owed below the board. Victoria U. Wellington L. Rev., 45, p.27.
Boughey, J., 2013. Rights, review and reasonableness: The implications of Canada’s new approach to administrative decision-making and human rights for Australia. Sydney L. Rev., 35, p.283.
Matthew, A., 2015. The conundrum of phoenix activity: Is further reform necessary?. Insolvency Law Journal, 23, pp.116-135.
Mayanja, J., 2014. Clarifying the Object of Directors’ Endeavors: What Australia Can Learn from the United Kingdom. UNSWLJ, 37, p.874.
McQueen, R., 2016. A Social History of Company Law: Great Britain and the Australian Colonies 1854–1920. AU: Routledge.
O’Faircheallaigh, C., 2013. Extractive industries and Indigenous peoples: A changing dynamic?. Journal of Rural Studies, 30, pp.20-30.
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