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

How much damages should be awarded, X Co. is a retail dealer of garden trac...

X Co. is a retail dealer of garden tractors. Mr. Y signs a contract to buy a garden tractor for $400 but later backs out of the agreement. The tractor that Y agreed to buy is subse

Defined specific acts that constitute an act of terrorism, Defined specific...

Defined specific acts that constitute an act of terrorism:- Convention on Offences on Board Tokyo Aircraft 1963 relates to hijacking. Unlawful Seizure of Aircraft in Hague 1

Trade and commerce, what is the importance of law enforcement and the legal...

what is the importance of law enforcement and the legal profession as service industries?

Define public relations, Question : Public Relations units in organizat...

Question : Public Relations units in organizations are generally considered as expense centres, as only the input and expenditures can be measured adequately. Therefore, to sec

Explain about international civil aviation organization, What is Internatio...

What is International Civil Aviation Organization The Chicago Convention on International Civil Aviation 1944 governs and regulates the laws of air space and outer space. Furth

Types and classification of law, Types and Classification of Law: Rule...

Types and Classification of Law: Rules of law may be classified as like;: For Written For National and International For Public and Private For Substantive

Show the cross agency actions, Q. Show the Cross agency actions ? As al...

Q. Show the Cross agency actions ? As already described, the ASIC, ATO and FWO all have responsibilities in investigating and monitoring elements of phoenix activity. This mean

What are the important provisions of the statute of icj, What are  the imp...

What are  the important provisions of the Statute of ICJ Some of the important provisions of the Statute of ICJ are: Article 34 which states that only states and not the in

Successive stages of a capital reorganisation, Successive stages of a capit...

Successive stages of a capital reorganisation: There was a sequence of general and class meetings to approve the successive stages of a capital re-organisation.  Out of 1,600

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