BUSL251 Business and Corporation Law

Published : 16-Sep,2021 | Views : 10

Question:

Explain the court’s methodology depends on the following two crucial matters:-

The Declaration correctly abridged content of the framework contracts
Binding contract pointed out in reference to the parties who have entered into contract are the parties who are intended to be binding.

The Case tells us about how the issues on declaration related to agreements of companies were handled by different hierarchy of courts.

Answer:

Announcement regarding the Pilbara Iron Ore mine made by FMG in 2004 with regard to “binding” framework agreements Announcement was labeled as deceptive and misleading by ASIC The matter lands up in Court in 2006 Trial Judge passes verdict ASIC appeals to the Full Court FMG appeals to the High Court

Section 674(2), Corporations Act 2001 Continuous disclosure of material information Section 1041H, Corporations Act 2001 Prohibits from providing any deceptive or misleading information Section 180, Corporations Act 2001 Duty of director (care and due diligence)

ASIC Non- binding nature framework agreement Violation of s674(2) and s1041H by FMG S.180 violation by Forrest Full Court of the Federal Court FMG found guilty besides Forrest guilty of breach of s. 180 High Court Trial judge approach severely criticized Correctness of stated facts significant The intended audience interpretation the key determining factor

High Court Decision Ruled in favor of FMG and Forrest Implications Companies Intended audience to be considered Facts have to be stated accurately Future Cases The conduct is deceptive or not would depend on the perceived meaning by intended audience.