Hargovan, Anil; Harris, Jason --- "The Shifting Balance of Shareholders' Interests in Insolvency: Evolution or Revolution?" [2007] MelbULawRw 24; (2007) 31(2) Melbourne University Law Review 591
[∗] (2007) 232 ALR 232 (‘Sons of Gwalia’).
[†] BA, LLB (Natal), LLM (Monash); Senior Lecturer, School of Business Law and Taxation, Australian School of Business, University of New South Wales.
[‡] BA, LLB (UWS), LLM (ANU); Lecturer, Faculty of Law, University of Technology Sydney.
[1] [1897] AC 22.
[2] See, eg, Hamilton v Whitehead [1988] HCA 65; (1988) 166 CLR 121; Andar Transport Pty Ltd v Brambles Ltd (2004) 217 CLR 424.
[3] Andar Transport Pty Ltd v Brambles Ltd (2004) 217 CLR 424, 444–6 (Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ); Lee v Lee’s Air Farming Ltd [1961] AC 12.
[4] Frank Easterbrook and Daniel Fischel, The Economic Structure of Corporate Law (1991) 41–4.
[5] Companies Act 1862, 25 & 26 Vict, c 89. This is the legislative ancestor of the modern Corporations Act 2001 (Cth) in Australia. Certain provisions in Australian company law can be traced back to this legislation. In particular, s 563A dealing with shareholder subordination developed out of Companies Act 1862, 25 & 26 Vict, c 89, s 38.
[6] For judicial observation of substantial legal changes relating to corporate responsibility over the last century: see Re Pyramid Building Society (in liq) (1991) 6 ACSR 405, 408–9 (Vincent J).
[7] The Future Fund was established by the Future Fund Act 2006 (Cth) to assist future Australian governments to meet the cost of public sector superannuation liabilities by delivering investment returns on contributions to the Fund. Total assets, as at August 2007, amounted to $60 billion: see Australian Government, Future Fund (2007) <http://www.futurefund.gov.au/> .
[8] Jeffrey Lucy, ‘ASIC’s Super Strategies: 2006–07’ (Speech delivered to The Association of Superannuation Funds of Australia Ltd, Sydney, 6 September 2006) 1.
[9] Ibid.
[10] Eugene F Fama, ‘Efficient Capital Markets: A Review of Theory and Empirical Work’ (1970) 25 Journal of Finance 383, 383.
[11] Corporations Act 2001 (Cth) ch 6CA.
[12] See, eg, Corporations Act 2001 (Cth) ch 6D.
[13] For public enforcement, ASIC has general administration of the Corporations Act 2001 (Cth): at s 5B. ASIC may seek remedies for breaches of the Act, including injunctions (s 1324), pecuniary penalties (s 1317G), compensation orders (ss 1317H, 1317HA) and disqualification orders (ss 206C, 206F). For private enforcement: see, eg, Corporations Act 2001 (Cth) ss 729 (defective disclosure documents under ch 6D), 1317H, 1317HA (compensation orders), 1324 (injunction and/or damages).
[14] Corporations Act 2001 (Cth) s 556.
[15] Corporations Act 2001 (Cth) s 553A.
[16] (2007) 232 ALR 232.
[17] Corporations Act 2001 (Cth) s 563A.
[18] See, eg, Christopher Dalton, Executive Comment: Sons of Gwalia Decision Undermines Clarity for Debtholders and Wider Australian Debt Market (7 February 2007) Standard & Poor’s <http://www2.standardandpoors.com/portal/site/sp/en/ap/page.hottopic/sons_of_gwalia_viewpoint_2_12_hottopic/3,1,1,0,0,0,0,0,0,0,0,0,0,0,0,0.html> .
[19] Bankruptcy Reform Act, 11 USC § 510(b) (2000 & Supp V, 2005) (‘Bankruptcy Code’). See, eg, Australian Bankers’ Association, ‘Australian Bankers’ Association Supports CAMAC Examination of Sons of Gwalia Ruling’ (Press Release, 8 February 2007). Cf ABC News Online, Shareholders’ Group Welcomes High Court Win (31 January 2007) ABC News Online <http://www.abc.net.au/news/newsitems/200701/s1837183.htm> .
[20] Corporations Act 2001 (Cth) s 674.
[21] See Corporations Act 2001 (Cth) s 1041H; Australian Securities and Investments Commission Act 2001 (Cth) s 12DA; Trade Practices Act 1974 (Cth) s 52.
[23] See below Part II(B)(2), (4).
[24] Webb Distributors (Aust) Pty Ltd v Victoria [1993] HCA 61; (1993) 179 CLR 15, 31–3 (Mason CJ, Deane, Dawson and Toohey JJ) (‘Webb’).
[25] Ibid 31–6 (Mason CJ, Deane, Dawson and Toohey JJ).
[26] [2005] FCA 51; (2005) 216 ALR 105, 111–12.
[27] (2005) 55 ACSR 145, 151 (Finkelstein J); revd (2005) 147 FCR 434.
[28] Media World [2005] FCA 51; (2005) 216 ALR 105, 107 (Finkelstein J).
[29] Ibid 107–11.
[30] Ibid 109–10 (Finkelstein J).
[31] Ibid 111.
[32] [1997] UKHL 41; [1998] AC 298, 326 (Lord Browne‑Wilkinson).
[33] Luke Bentvelzen, Belinda Bible and Elisabeth McDermott, ‘Media World: Using a Pocket Watch in the Digital Age’ (2006) 24 Companies and Securities Law Journal 161, 165.
[34] Stephen Bartholomeusz, ‘Court Ruling Sends Shock Waves through Global Investment’, The Age (Melbourne), 12 February 2005, Business 1; David Clifford and Kenneth Tang, ‘Over‑Reaction to the Media World Case’ (March 2005) Focus 1.
[35] Sons of Gwalia Ltd (admin apptd) v Margaretic [2005] FCA 1305; (2005) 55 ACSR 365, 378.
[36] Ibid 376.
[37] Ibid 376–7 (Emmett J).
[38] Ibid. Similar statements were made in obiter in Johnston v McGrath [2005] NSWSC 1183; (2005) 195 FLR 101, 112 (Gzell J).
[39] (2005) 55 ACSR 145; revd (2005) 147 FCR 434.
[40] [2005] FCA 1305; (2005) 55 ACSR 365.
[41] Concept Sports (2005) 55 ACSR 145, 150–1.
[42] Cadence Asset Management Pty Ltd v Concept Sports Ltd (2005) 147 FCR 434, 446 (Merkel, Weinberg and Kenny JJ).
[43] Ibid 446–7 (Merkel, Weinberg and Kenny JJ).
[44] Ibid 447 (Merkel, Weinberg and Kenny JJ).
[45] Sons of Gwalia Ltd v Margaretic [2005] FCA 1305257; (2006) 149 FCR 227.
[46] Ibid 239–40 (Finkelstein J), 243 (Gyles J), 251 (Jacobson J). Cf Johnston v McGrath [2005] NSWSC 1183; (2005) 195 FLR 101, 113 (Gzell J), although Gzell J’s comments are merely obiter.
[47] Soden [1997] UKHL 41; [1998] AC 298, 326 (Lord Browne‑Wilkinson).
[48] Sons of Gwalia Ltd v Margaretic [2005] FCA 1305257; (2006) 149 FCR 227, 239 (Finkelstein J), 244 (Gyles J),
253–4 (Jacobson J).
[49] Ibid 241–3 (Finkelstein J), 244–5 (Gyles J), 254 (Jacobson J).
[50] Ibid 244–5 (Gyles J), 253–4 (Jacobson J). Whilst Finkelstein J did not expressly state this in his reasons, it is submitted that his Honour’s acceptance of this position taken by the House of Lords in Soden [1997] UKHL 41; [1998] AC 298 represents an implicit acceptance that Margaretic’s claim did not involve a reduction of capital: at 239–43.
[51] Sons of Gwalia Ltd v Margaretic [2005] FCA 1305257; (2006) 149 FCR 227, 242–3.
[52] Webb [1993] HCA 61; (1993) 179 CLR 15, 35 (Mason CJ, Deane, Dawson and Toohey JJ).
[54] Sons of Gwalia Ltd v Margaretic [2005] FCA 1305257; (2006) 149 FCR 227, 238 (Finkelstein J).
[55] See below Part III(A).
[56] Sons of Gwalia (2007) 232 ALR 232, 247 (Gummow J), 268 (Kirby J), 302 (Heydon J), 302–3 (Crennan J).
[57] Ibid 286 (emphasis in original). See also at 244 (Gleeson CJ).
[58] See ibid 243 (Gleeson CJ), 248 (Gummow J). Gummow J referred to the distinction between claims by subscribing shareholders and claims by transferee shareholders as being a ‘fruitless’ one: at 248. Similarly, Gleeson CJ stated that such distinctions involved ‘little difference’: at 243.
[59] Ibid 240 (Gleeson CJ), 264 (Kirby J), 269 (Hayne J). Gummow, Heydon and Crennan JJ all agreed with Hayne J on this point: at 259–60 (Gummow J), 302 (Heydon J), 305 (Crennan J).
[60] Ibid 237 (Gleeson CJ), 247 (Gummow J), 265–6 (Kirby J), 278 (Hayne J), 287 (Callinan J), 302 (Heydon J). Crennan J did not decide this point specifically, but generally agreed with the reasons given by Gleeson CJ, Gummow and Hayne JJ: at 302–3.
[61] Ibid 236–9 (Gleeson CJ).
[62] Ibid 286 (Kirby J).
[63] Ibid 239.
[64] Ibid 247–8. His Honour also specifically criticised the ‘inconsistency’ argument raised in Houldsworth (1880) 5 App Cas 317 by analysing the history of rescission for misrepresentation: at 249–55.
[65] Sons of Gwalia (2007) 232 ALR 232, 257.
[66] Webb [1993] HCA 61; (1993) 179 CLR 15, 31–3 (Mason CJ, Deane, Dawson and Toohey JJ).
[67] Sons of Gwalia (2007) 232 ALR 232, 239. See also at 257, 260 (Gummow J), largely approved by Kirby J: at 262. Hayne J was not prepared to directly criticise the reasoning in Webb, but distinguished the decision on the basis that it concerned subscribing members: at 281–2. Heydon J agreed with Hayne J: at 302.
[68] Ibid 236 (Gleeson CJ), 279, 281 (Hayne J), 295 (Callinan J).
[69] See the discussion in R P Austin and I M Ramsay, Ford’s Principles of Corporations Law (13th ed, 2007) 1289–91.
[70] See ibid 1289, where the learned authors refer to the principle as ‘defective’ as a measure of creditor protection. See also John Armour, ‘Legal Capital: An Outdated Concept?’ (2006) 7 European Business Organization Law Review 5, 5.
[71] Cf Corporations Act 2001 (Cth) ch 2J with the stricter statutory equivalent in Corporations Act 1989 (Cth) s 195, prior to the Corporate Law Economic Reform Program reforms of 1998 to share capital transactions.
[72] Sons of Gwalia (2007) 232 ALR 232, 243 (Gleeson CJ), 262 (Kirby J), 281 (Hayne J), 305 (Crennan J).
[73] Ibid 236 (Gleeson CJ). Crennan J doubted that Houldsworth (1880) 5 App Cas 317 supported the notion that the shareholder’s claim should be subordinated so as to preserve a guarantee fund for the creditors. Her Honour stated that the decision merely acted to clarify the rights between members (as Houldsworth involved an unlimited company): at 303–5.
[74] Sons of Gwalia (2007) 232 ALR 232, 295.
[75] Ibid 262 (Kirby J). See generally at 286–301 (Callinan J).
[76] Ibid 240.
[77] Ibid (emphasis added).
[78] Bankruptcy Code, 11 USC § 510(b) (2000 & Supp V, 2005) provides for a ‘members come last’ policy by subordinating all claims for damages by shareholders arising from the purchase or sale of securities. For further discussion of subordination in the US: see Anil Hargovan and Jason Harris, ‘Sons of Gwalia and Statutory Debt Subordination: An Appraisal of the North American Experience’ (2007) 20 Australian Journal of Corporate Law 265.
[79] Sons of Gwalia (2007) 232 ALR 232, 240 (Gleeson CJ).
[80] Chris Pearce, Parliamentary Secretary to the Treasurer, ‘Pearce Asks CAMAC to Examine the Sons of Gwalia Ruling’ (Press Release, 7 February 2007). In this press release, the Parliamentary Secretary to the Treasurer announced the referral of issues arising from the High Court decision in Sons of Gwalia (2007) 232 ALR 232 to CAMAC for ‘consideration and advice’ on the need for law reform. The three issues that CAMAC has been requested to examine can be found in the press release.
[81] Sons of Gwalia (2007) 232 ALR 232, 262.
[82] Ibid.
[83] Ibid 261.
[84] Ibid 263.
[85] Ibid 261–2.
[86] Ibid.
[87] Ibid 267.
[88] Ibid 300–1.
[89] Ibid 295.
[90] See above Part III(B).
[91] Sons of Gwalia (2007) 232 ALR 232, 295.
[92] Ibid 238.
[93] Ibid 237–8 (Gleeson CJ).
[94] The US has the strongest current subordination laws in the Bankruptcy Code, 11 USC § 510(b) (2000 & Supp V, 2005). For discussion: see Hargovan and Harris, ‘Sons of Gwalia and Statutory Debt Subordination’, above n 78. Canada has proposed amendments to its insolvency legislation to introduce even stronger subordination laws by deferring all ‘equity claims’ in insolvency, including preventing shareholder claimants from voting at creditors’ meetings: see Bill C‑55, An Act to Establish the Wage Earner Protection Program Act, to Amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act and to Make Consequential Amendments to Other Acts, 1st Sess, 38th Parl, 2005 (assented to 25 November 2005, c 47). At the time of writing, Bill C‑55 had been passed by the Canadian federal Parliament but not proclaimed: see Legisinfo, Status of Bill C‑55 (25 July 2007) Parliament of Canada <http://www.parl.gc.ca/LEGISINFO/index.asp?Language=E & Chamber=N & StartList=A & EndList=Z & Session=13 & Type=0 & Scope=I & query=4514 & List=stat> . On the other hand, whilst the UK has a provision substantially similar to Corporations Act 2001 (Cth) s 563A, Insolvency Act 1986 (UK) c 45, s 74(2)(f) was read down by the House of Lords in Soden [1997] UKHL 41; [1998] AC 298, 324 (Lord Browne‑Wilkinson), in light of the statutory abolition of the rule in Houldsworth (1880) 5 App Cas 317 by Companies Act 2006 (UK) c 46, s 655. See also Hargovan and Harris, ‘Sons of Gwalia and Statutory Debt Subordination’, above n 78; Anil Hargovan and Jason Harris, ‘Sons of Gwalia: Policy Issues Raised by the Subordination of Shareholder Claims’ (2006) 7(7) Insolvency Law Bulletin 1.
[95] For a comprehensive and critical review of the experience in the US and Canada: see Hargovan and Harris, ‘Sons of Gwalia and Statutory Debt Subordination’, above n 78.
[96] Paul L Davies, Gower’s Principles of Modern Company Law (6th ed, 1997) 435–42; Roy Goode, Principles of Corporate Insolvency Law (3rd ed, 2005) 198–200.
[97] 11 USC § 510(b) (2000 & Supp V, 2005); Sons of Gwalia (2007) 232 ALR 232, 240 (Gleeson CJ), 245–6 (Gummow J), 267 (Kirby J).
[98] Bankruptcy Code, 11 USC § 510(b) (2000 & Supp V, 2005).
[99] [2002] USCA3 41; 281 F 3d 133 (3rd Cir, 2002).
[100] See further Hargovan and Harris, ‘Sons of Gwalia and Statutory Debt Subordination’, above n 78, for discussion of Telegroup, [2002] USCA3 41; 281 F 3d 133 (3rd Cir, 2002), and other leading US cases.
[101] Telegroup, [2002] USCA3 41; 281 F 3d 133, 142 (Becker CJ) (3rd Cir, 2002).
[102] John J Slain and Homer Kripke, ‘The Interface between Securities Regulation and Bankruptcy — Allocating the Risk of Illegal Securities Issuance between Securityholders and the Issuer’s Creditors’ (1973) 48 New York University Law Review 261.
[103] Telegroup, [2002] USCA3 41; 281 F 3d 133, 140 (Becker CJ) (3rd Cir, 2002).
[104] Sons of Gwalia (2007) 232 ALR 232, 246. See also Zack Christensen, ‘The Fair Funds for Investors Provision of Sarbanes‑Oxley: Is It Unfair to the Creditors of a Bankrupt Debtor?’ [2005] University of Illinois Law Review 339, 348–9.
[105] Sons of Gwalia (2007) 232 ALR 232, 246–7.
[106] Ibid 240–1.
[107] Ibid 267.
[108] 11 USC § 510(b) (2000 & Supp V, 2005).
[109] Sons of Gwalia (2007) 232 ALR 232, 246 (Gummow J), 266–7 (Kirby J).
[110] Companies Act 1985 (UK) c 6, s 111A.
[111] Sons of Gwalia (2007) 232 ALR 232, 284.
[112] This Part draws on the authors’ earlier article: see Hargovan and Harris, ‘Sons of Gwalia and Statutory Debt Subordination’, above n 78.
[113] Ferrier Hodgson, Report to Creditors: Sons of Gwalia Limited (24 November 2006) 11.
[114] McGrathNicol, Deed Administrators’ Update (15 March 2007) 5–6.
[115] Law Reform Commission, General Insolvency Inquiry, Report No 45 (1988) vol 1, 15.
[116] Elisabeth Sexton, ‘Gwalia Ruling to Delay Ion Payouts’, The Sydney Morning Herald (Sydney), 2 February 2007, 19.
[117] This was recognised by John Walker, writing before the High Court judgment: John Walker, ‘Sons of Gwalia: Shareholders as Creditors’ (2005) 17 Australian Insolvency Journal 4.
[118] In contrast with the Australian position, shareholders in the US benefit from the ‘fraud on the market’ theory of presumed reliance. The US Supreme Court in Basic Inc v Levinson, [1988] USSC 36; 485 US 224, 241–2 (Blackmun J) (1988), accepted and explained the ‘fraud on the market’ theory in the following way:
[it] is based on the hypothesis that, in an open and developed securities market, the price of a company’s stock is determined by the available material information regarding the company and its business … Misleading statements will therefore defraud purchasers of stock even if the purchasers do not directly rely on the misstatements. … The causal connection between the defendants’ fraud and the plaintiffs’ purchase of stock in such a case is no less significant than in a case of direct reliance on misrepresentations.
Judicial acceptance of the theory was based on ‘fairness, public policy … as well as judicial economy’ resulting from a rebuttable presumption of reliance: at 245 (Blackmun J). The ‘fraud on the market’ theory is examined in Michael Duffy, ‘Fraud on the Market: Judicial Approaches to Causation and Loss from Securities Nondisclosure in the United States, Canada and Australia’ [2005] MelbULawRw 20; (2005) 29 Melbourne University Law Review 621.
[119] In the Ion administration, the deed administrator has noted that he will need to conduct officer examinations in order to verify the facts alleged in the shareholder claims: see McGrathNicol, above n 114, 7.
[120] See, eg, Rebecca Keenan, ‘High Court Hands Big Victory to Sons of Gwalia Investors’, The West Australian (Perth), 1 February 2007, Metro 1.
[121] Cf Bernard Murphy and Camille Cameron, ‘Access to Justice and the Evolution of Class Action Litigation in Australia’ [2006] MelbULawRw 14; (2006) 30 Melbourne University Law Review 399, 410–11: ‘A realistic appraisal of the evolution of class actions since 1990 strongly suggests that there has been no flood of litigation in Australia … the ALRC [2000] has confirmed that [such] concerns … have not materialised.’
[122] See Campbells Cash & Carry Ltd v Fostif Pty Ltd [2006] HCA 41; (2006) 229 ALR 58.
[123] Corporations Act 2001 (Cth) s 1321.
[124] Sons of Gwalia (2007) 232 ALR 232, 301.
[125] Murphy and Cameron, above n 121, 409.
[126] Corporations Act 2001 (Cth) s 674.
[127] For example, in 2004 there were 16 376 companies in some form of external administration (with many of those companies moving from one type to another). Of those companies only 616 were public companies. Given that the ASX list contains approximately 1700 companies, it is a reasonable assumption that publicly listed companies are only a small proportion of the total corporate insolvencies. The data used for these calculations was purchased from ASIC as part of an empirical study currently being undertaken by the authors.
[128] Corporations Act 2001 (Cth) s 113(1) requires proprietary companies to have no more than 50 non‑employee shareholders.
[129] Corporations Act 2001 (Cth) s 436A.
[130] See Greg Peel and Chris Shaw, ‘Sons of Gwalia: A Frightening Decision’ (2005) 78 Australasian Investment Review 20; William Ryback, ‘Aussie Miner Ruling Fuels Fear’ (20 September 2005) The Standard <http://www.thestandard.hk/news_print.asp?art_id=1685 & sid=4647845> Elisabeth Sexton, ‘Shareholders Move Up Queue’, The Sydney Morning Herald (Sydney), 1 February 2007, 23; Leon Zwier and Justin Vaatstra, ‘Implications of the High Court Decision in Sons of Gwalia’ (2007) ABL Article 1.
[131] See, eg, Australian Bankers’ Association, ‘Sons of Gwalia Decision’ (Press Release, 2 February 2007).
[132] Christine Brown and Kevin Davis, ‘Credit Markets and the Sons of Gwalia Judgement’ (2006) 13 Agenda 239, 249–50.
[133] David Clifford and Gareth Lewis, ‘The Sons of Gwalia Decision: A Lender’s Perspective’ (October 2005) Focus 1. Of course, we should not assume that the capital markets in the UK are identical to those that operate in Australia. Therefore, the lack of an adverse reaction to removing subordination in the UK does not necessarily translate to a similar reaction on Australian debt capital markets.
[134] Fitch Ratings, Gwalia Shareholder Case Decision Unwelcome for Debt Markets: But No Major Impact Likely (1 February 2007) Fitch Ratings <http://www.fitchratings.com.au/show_featart.
asp?rel_id=464>.
[135] Parliamentary Joint Committee on Corporations and Financial Services, Parliament of Australia, Improving Australia’s Corporate Insolvency Laws: Issue Paper (2003) 2.
[136] Companies Act 1862, 25 & 26 Vict, c 89, s 38. The subsequent history of this provision is discussed at length in Sons of Gwalia (2007) 232 ALR 232, 272–6 (Hayne J).
[137] Sons of Gwalia (2007) 232 ALR 232, 295.
[138] Slain and Kripke, above n 102, 287.
[139] Ibid.
[140] Sons of Gwalia (2007) 232 ALR 232, 263.
[141] See Slain and Kripke, above n 102, 267–8.
[142] Telegroup[2002] USCA3 41; , 281 F 3d 133, 140–1 (Becker CJ) (3rd Cir, 2002), noted in Sons of Gwalia (2007) 232 ALR 232, 246 (Gummow J).
[143] Sons of Gwalia (2007) 232 ALR 232, 240.
[144] Kenneth B Davis Jr, ‘The Status of Defrauded Securityholders in Corporate Bankruptcy’ [1983] Duke Law Journal 1, 3.
[145] See Letter from Chris Pearce (Parliamentary Secretary to the Treasurer) to Richard St John (Convenor of the CAMAC), 6 February 2007 <http://www.camac.gov.au/camac/camac.nsf/by
Headline/PDFReference/$file/Ref_Sons_of_Gwalia.pdf>.
[146] Hargovan and Harris, ‘Sons of Gwalia and Statutory Debt Subordination’, above n 78, 291–2.
[147] Sons of Gwalia (2007) 232 ALR 232, 240.
[149] See Hargovan and Harris, ‘Sons of Gwalia and Statutory Debt Subordination’, above n 78, 282 for a discussion of: Re Enron Corp, 341 BR 141 (SD NY, 2006); Re WorldCom Inc, 329 BR 10 (SD NY, 2005).
[150] Sons of Gwalia (2007) 232 ALR 232, 262–3.
[151] See further Hargovan and Harris, ‘Sons of Gwalia and Statutory Debt Subordination’, above n 78, 297.
[152] Ibid.
[153] Corporations Act 2001 (Cth) ss 674 (continuous disclosure obligation), 1317HA (compensation order may be made against a person for breach of, inter alia, s 674) allow an investor to sue both a corporation and/or a person involved in the contravention for damages for failure to maintain proper disclosure to the market. Similarly, s 1041I allows an investor to sue both a corporation and/or a person involved in the contravention for damages for misleading or deceptive conduct in relation to financial services.
[154] For discussion on how enterprise liability imposes costs of fraud upon innocent shareholders: see Jennifer H Arlen and William J Carney, ‘Vicarious Liability for Fraud on Securities Markets: Theory and Evidence’ [1992] University of Illinois Law Review 691, 698–700; Donald C Langevoort, ‘Capping Damages for Open‑Market Securities Fraud’ (1996) 38 Arizona Law Review 639, 648–50; John C Coffee Jr, ‘Reforming the Securities Class Action: An Essay on Deterrence and Its Implementation’ (2006) 106 Columbia Law Review 1534.
[155] Corporations Act 2001 (Cth) s 206C(1).
[156] See Austin and Ramsay, above n 69, 573, where the learned authors refer to the omission of disqualification orders as ‘odd’.
[157] Corporations Act 2001 (Cth) s 1041I.
[159] Re Pyramid Building Society (in liq) (1991) 6 ACSR 405, 409 (Vincent J).
[160] Elizabeth Warren, ‘Bankruptcy Policy’ (1987) 54 University of Chicago Law Review 775, 789.
[161] Employee entitlements and personal injury claims have been given priority ranking in insolvency above other general creditor claims: Corporations Act 2001 (Cth) ss 556, 560.
[162] Hargovan and Harris, ‘Sons of Gwalia and Statutory Debt Subordination’, above n 78; Jason Harris and Anil Hargovan, ‘Sons of Gwalia: Navigating the Line between Membership and Creditor Rights in Corporate Insolvencies’ (2007) 25 Company and Securities Law Journal 7; Hargovan and Harris, ‘Sons of Gwalia: Policy Issues Raised’, above n 94.
[163] Corporations Act 2001 (Cth) s 553A; Webb [1993] HCA 61; (1993) 179 CLR 15, 31–3 (Mason CJ, Deane, Dawson and Toohey JJ).
[164] Australian Stock Exchange Ltd, Australia’s Share Owners: An ASX Study of Share Investors in 2004 (2005).