Defining an officer under the Corporations Act 2001: Case Note - ASIC v King [2020] HCA 4

Introduction

On 11 March 2020 the High Court of Australia handed down judgment in the case of Australian Securities and Investments Commission v King [2020] HCA 4, with the judgment providing a long-awaited clear definition of what an 'officer' means under section 9 of the Corporations Act 2001 (Cth) (the Act).

The High Court's unanimous judgment, which was favourable to ASIC, determined that Mr King was an 'officer' as defined in section 9(b)(ii) of the Act, as the provision is not only confined to those who hold or occupy a named office in a corporation or a recognised position with rights and duties attached to it.

Background

Mr Michael King was the Chief Executive Officer (CEO of) and an executive director MFS Ltd, which was the parent company of the MFS group of companies (MFS Group). MFS Investment Management Pty Ltd (MFSIM) was a subsidiary in the MFS Group and acted as a responsible entity for a handful of registered managed investment schemes, the largest being the Premium Income Fund (PIF).

On 29 June 2007, MFSIM entered into a $200 million facility with the Royal Bank of Scotland (RBS), with this facility to be used by MFSIM for the PIF's purposes. MFSIM then arranged for $103 million of this facility to be used to pay the debt of...