The Australian Securities and Investments Commission (“ASIC”) brought a civil penalty case against MFS Investment Management Ltd (“MFSIM”) and various directors, officers and employees of the MFS Group of companies.
The primary judge found that MFSIM, the responsible entity for the Premium Income Fund (“PIF”), caused payments of $130 million and $17.5 million to be made from PIF’s funds for no purpose or benefit of PIF and that the payments were made for the purposes of other entities within the MFS Group. Mr King was the CEO of the MFS Group and a former director of MFSIM at the time of the payments.
It was held by the primary judge that inter alia the CEO of MFS Group, Mr King, breached his responsibilities as an officer of MFSIM (see s 601FC and s 601FD of the Corporations Act 2001 (Cth)).
Mr King, together with the other defendants, appealed on numerous grounds.
Amongst other issues, the Court of Appeal was required to consider whether Mr King – for whom Damian Clothier QC and Bianca Kabel acted on the appeal – as CEO of the MFS Group, properly fell within the definition of “officer of a corporation” within the meaning of s 9 of the Corporations Act 2001 (Cth). The Court of Appeal accepted the interpretation contended for by Mr King, that in order to fall within the definition of “officer” under s 9, it is necessary to prove that the person act in an office of the corporation, in the sense of a “recognised position with rights and duties attached to it”. It further found that ASIC had not proved that Mr King was an officer of MFSIM within the meaning of the Act, and set aside the declarations by the primary judge relating to that finding.
The judgment is available here.