Am I an ‘officer’ for the purposes of the Corporations Act 2001?
An ‘officer‘ of a company owes statutory and common law duties to both the Company and to persons with whom the company deals.
Undischarged bankrupts are disqualified from engaging in the management of a company by section 206B of the Corporations Act 2001; who then is an officer the purposes of that provision?
The answer may be found in King v Australian Securities and Investments Commission  QCA 352. In that case the Queensland Court of Appeal was required to determine whether a person was ‘officer’ of a Company and breached duties owed to the company. The court considered competing views expressed by the Federal Court and the High Court which are, essentially, a consideration of form versus substance.
In Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296 the Full Federal Court held that for a person to be an ‘officer’ it was implicit that they hold an office within that company referring to the express provisions of the Corporations Act 2001 where the word ‘officer’ is used in conjunction with terms such as ‘position’ or ‘office’.
The alternative view considered by the Queensland Court of Appeal were comments made by the High Court in Shafron v Australian Securities and Investment Commission (2012) 247 CLR 465 where it was said that the term ‘officer’ applied to a broader class of people than those who hold a particular ‘office’.
The High Court noted that in Corporations Act sub-paragraphs 9(i) and (ii) define ‘officers’ by what they do and that it follows therefore that the inquiry must be directed to ‘what role the person in question plays in the corporation’, rather than whether they hold an nominal ‘office’ in the company.
The Court of Appeal did not follow the High Court’s observations in Shafron as it considered the comments obita dicta and instead followed Grimaldi. It followed therefore that the ASIC were required to prove Mr King acted in an ‘office’ of the company in order to be considered an ‘officer’.
The Court of Appeal held that for a person to be deemed an ‘officer’ of a company that person must ‘act in an office’ of the corporation ‘in the sense of a recognised position with rights and duties attached’.
(‘obiter dicta‘ are observations by a judge or legal question suggested by a case under consideration but not arising in such a manner as to require decision. The observations are therefore not binding is a precedent however when made by a superior court like our High Court are often considered persuasive)
A very helpful summary of the King decision relied upon by me in this post appears in the Queensland Law Reporter published 25 January 2019: https://mailchi.mp/queenslandreports/your-weekly-queensland-law-reporter-m8chjfsqke-1483353?e=b451bce4f5.