The AWA case - some further reflections

Article Abstract:

In the 1992 case AWA Ltd v Daniels the judge ruled that auditors were negligent in relation to two audits conducted for the company, but that the auditors could file a contributory negligence claim against the company. The basis for this was his determination that executive directors of the company did not exercise a proper duty of care. The exact division of responsibility between executive and non-executive directors awaits further evaluation.

Auditors

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The battle for law reform in the area of corporate law continues

Article Abstract:

Reform of laws on corporate directors' loans is not necessary. The Australian Securities Commission has sufficient power to punish illegal transactions and recent cases show that directors do get punished. Hawkins v Bank of China imposed a debt liability on a director, and Rema Industries & Services v Coad imposed liability on a director, even though he was not involved in daily management.

Corporation law

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Historic statement on the duties of directors

Article Abstract:

An historic judgment of the New South Wales Supreme Court in AWA Ltd v Daniels decided that in certain cases courts will rule on common law duties of care required of company directors. This is important since it opens up the use of contributory negligence as a possible counter-claim on the part of auditors against the directors of the companies in cases involving liability of the auditors.

Powers and duties

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