Statutes Amendment (Directors' Liability) Bill 2012 assented in South Australia
Monday 27 May 2013 @ 9.20 a.m. | Corporate & Regulatory
South Australia becomes the sixth State in Australia to put in motion amendments to clarify reforms to directors' personal liability for actions of the body corporate in the Statutes Amendment (Directors' Liability) Act 2013 (No. 16 of 2013).
The Act is part of the implementation of the Council of Australian Governments’ (COAG) Directors’ Liability reforms which aim to harmonise the imposition of personal criminal liability for corporate fault across the Australian jurisdictions.
In particular, the SA Act aims to modify or remove vicarious liability of directors and other persons in positions of authority in a body corporate, for offences committed by the body corporate against the relevant Act or against regulations under the relevant Act, with amendments made to over 50 Acts in force.
Where vicarious liability has been modified, the new provisions provide for one or both of 2 types of liability: Type 3 Directors' liability and Type 1 Directors' liability.
In Type 3 Directors' liability, directors (or other persons in positions of authority in a body corporate) will be liable in relation to certain offences committed by the body corporate unless they prove that they could not, by the exercise of due diligence, have prevented the commission of the offence. It is the more onerous of the two liability types in terms of the burden of proof on a director.
In Type 1 Director's liability, directors (or other persons in positions of authority in a body corporate) will be liable in relation to certain offences committed by the body corporate if the prosecution proves that they knew, or ought reasonably to have known, that there was a significant risk that such an offence would be committed, were in a position to influence the conduct of the body corporate in relation to the commission of such an offence and failed to exercise due diligence to prevent the commission of the offence.
South Australia joins Victoria, Australian Capital Territory and New South Wales who have all passed similar legislation in the 2013 sitting period. Bills awaiting assent in other jurisdictions including similar provisions are in Queensland and Tasmania.
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