The Court held that under s 206A(2) of the Corporations Act, a person disqualified from managing corporations by ASIC automatically ceases to be a director and cannot be reappointed without ASIC permission under s 206GAB, meaning all steps taken by such a person purportedly on behalf of a company lack authority and are nullities not attributable to the company. The Court further held that purported ratification of those unauthorised steps was ineffective where there was no evidence the ratifying director had full knowledge of the material circumstances, including the disqualification, the lack of authority, and the significance of the ratification decision. Rather than dismissing the proceedings outright, the Court stayed them for a short period to allow the company to regularise its position through proper ratification or an application under s 1322, while discharging a freezing order that had been improperly obtained without authority.
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