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Essay / Companies Act 2001 - 1663
Questions:I. Which common law and which statutory law give rise to the criminal liability of a company? II. Discuss whether the actions of a low-level employee result in a company's criminal liability for a regulatory offense not involving strict liability?Rules:I. Lennard's Carrying Co Ltd v Asiatic Petroleum Co Ltd [1915] AC 705II. HL Bolton Co Ltd v TJ Graham & Sons Ltd [1975] 1 QB 159III. Tesco Supermarket Ltd v Nattrass [1972] AC 153IV. Meridian Global Funds Management Asia Ltd v Securities Commission (1995) 13 ACLC 3245V. ABC Development Learning Centers Pty Ltd v Wallace [2006] VSC 171VI. Criminal Code Act 1995 (Cth)VII. Companies Act 2001VIII. Trade Practices Act 1974 (Cth)IX. Crimes (Manslaughter) Act 1900 Applying the laws to the facts Section 124 of the Companies Act 2001 establishes a company as a separate legal entity which has the same characteristics as a natural legal entity. Although a corporation does not have a physical existence, this does not prevent it from complying with common and statutory law and being liable in tort, criminal and contract matters. He can enter into a contract in his own name and can sue or be sued for breach of his contractual obligation and therefore be held liable for the breach of that contract. Accordingly, actions under criminal law and civil law are held liable to a corporation. Before determining the criminal liability of a company, it is important to clearly distinguish two forms of liability: • primary (or direct); and• secondary (or indirect) liability. Primary liability arises when the company is deemed to have itself committed wrongdoing. However, a corporation itself has no capacity for physical action or possession of intentions or knowledge different from that of human beings. Denning LJ in HL Bolton said that directors and managers were simply like the human brain in a business which controlled its body (the business) by its directing mind and will. The mindset of these decision makers represented the mindset of the company and was governed by law. As in criminal law, the guilt of directors or officers would make the company itself guilty. Secondary liability arises when the company is found responsible for the acts or omissions of an individual. For example, a person suffers serious injury due to a lower-level employee's lack of care in the course of their employment. This employee's breach of duty of care should be considered a breach of the company's duty of care...