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

Correspond with description - terms used in contract, Correspond With Descr...

Correspond With Description - Terms Used In Contract With S.15 provides that, where goods are sold through description whether is an implied matter that the goods correspond w

Duties of an advocate, Duties of an Advocate First is, Duty to th...

Duties of an Advocate First is, Duty to the Court Whether as an officer of court an advocate is bound to assist in administration of the justice.  Thus he must adv

Capacity to become a partner - partnership law, Capacity to Become a Partne...

Capacity to Become a Partner - Partnership Law Competence to enter in partnership is co-extensive about capacity to contract.  Actually an infant may enter in a contract eithe

Describe the policy making realities, Describe the policy making realities ...

Describe the policy making realities Rational models simply do not describe policy making realities. As policy actors seldom evaluate very many alternatives for action or compa

African customary law, African Customary Law However African customary...

African Customary Law However African customary law may be specified as the law based on the customs of the ethnic groups that constitute England's indigenous population. Now

How was negligence the main cause, How was Negligence the main cause? ...

How was Negligence the main cause? Negligence was the major cause: A claim for damages can only succeed when there has been damage or loss to the claimant. Illustrations

Determine about the opportunistic policy cycle, Determine about the Opportu...

Determine about the Opportunistic policy cycle We now turn back once again to study the behaviour of the decision maker who, ultimately wants to return to the office in future.

What are the duties of the holder, Question 1: What are the duties of t...

Question 1: What are the duties of the holder of a Tourist Enterprise Licence, as provided by the Tourism Authority Act? Question 2: What are the relevant consideration

Explain self determination, Explain Self determination Self determinat...

Explain Self determination Self determination is actually the foundation of United Nations (UN) Charter. It is defined as a right of people to determine and to choose their ow

Super Parrot Food, Ask q‘Super Parrot Food’ Our own unique blend of parrot ...

Ask q‘Super Parrot Food’ Our own unique blend of parrot food containing the best quality ingredients lovingly prepared by us. Tim, the proprietor of ‘Pets on Parade’, a competing

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