Misfeasance - winding up, Business Law and Ethics

Assignment Help:

Misfeasance:

Under s.324, misfeasance proceedings may be instituted against a director, promoter, manager, liquidator or "officer" (including an auditor) of a company in liquidation either to recover the company's property from him or to claim compensation for the loss to the company caused by his misfeasance.

The most obvious case of misfeasance is where a director or other officer of the company is found to have misappropriated property of the company.  He can be compelled by misfeasance proceedings to return it.  His conduct may also be criminal misappropriation of property for which he can be prosecuted.

The other type of misfeasance case is where the company has suffered loss owing to the incompetence or neglect of a director or other officer.  It is not however easy to establish that there has been breach of a fiduciary duty such that an order should be made (on grounds of misfeasance) for payment of compensation.  For some lesser default the liquidator could bring an action for negligence.

In the context of misfeasance proceedings an auditor is exceptionally an "officer" who can be liable: he is not an "officer" in any other situation since he has no management functions.

A receiver is not an "officer" who can be held liable (if the company later goes into liquidation) for misfeasance.

                                      Case. RE B JOHNSON & JOHNSON CO (BUILDERS) (1955)

Misfeasance proceeds were brought against a receiver on the ground that he had in his management of the company's business taken decisions which were "detrimental from the company's point of view", eg. closing down parts of its business. 

Held:

A receiver is a representative of the secured creditors by or for whom he is appointed.  He is not an officer of the company who can be liable for misfeasance. If however a receiver does not act bona fide (ie. honestly) the company might have a claim against him but not misfeasance.


Related Discussions:- Misfeasance - winding up

Creation of a legally binding contract, Question 1: Define and explain ...

Question 1: Define and explain the essential conditions for the creation of a legally binding contract. You may attempt this question in French. Question 2: "Law is

How can an employee invoke constructive dismissal, Question 1: "Constru...

Question 1: "Constructive Dismissal is inherently different from dismissal in the sense that it is the employee who necessarily takes the initiative in considering the contrac

Law of employment, Unique Vespa Couriers Pty Ltd ('UVC') is a courier compa...

Unique Vespa Couriers Pty Ltd ('UVC') is a courier company operating in the Melbourne metropolitan area.  Where most courier companies used bicycle couriers, UVC used vespas.  They

Discuss intellectual property rights protect, QUESTION Many governments ...

QUESTION Many governments around the world have sought to address the problems posed by materials on the Internet that are illegal under their offline laws, and those considered

Goods - sales of goods, Goods - Sales of Goods Even if "goods" like in c...

Goods - Sales of Goods Even if "goods" like in common parlance has like the Act has given the word such technical meaning. Whether it provides like; "goods" consist of "all chat

Explain the main elements that constitute a valid contract, Question 1: ...

Question 1: Explain the main elements that constitute a valid contract. Question 2: Explain the concepts of negligence and remoteness of damage in tort law. Questio

Registration, Registration:            Whether the aforesaid documents...

Registration:            Whether the aforesaid documents are correctly prepared in accordance with the provisions of the Companies Act they are registered, the registrar grant

Effect of registration, Effect of Registration: S.16(2) of the Act pro...

Effect of Registration: S.16(2) of the Act provides that "from the date of incorporation mentioned in the certificate of incorporation the subscribers to the memorandum of a

Different methods used in interpretation of statutes, (a)  In Malaysia, the...

(a)  In Malaysia, there are many sources of written and unwritten law. Discuss the sources of unwritten law.      (b)  What are the different methods used in interpretation of s

Business ethics, Imagine yourself in a situation of being encouraged to inf...

Imagine yourself in a situation of being encouraged to inflate your expense account. Do you think your choice would be most affected by your individual moral development or by the

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd