LAWS2203 Lecture Notes - Lecture 9: Hih Insurance, Civil Penalty
Section 182- Improper Use of Position
Civil penalty provision but if the improper use of the position is dishonest it can attract
criminal liability under s 184(2)
1) A director, secretary, other officer or employee of a corporation must not improperly use
their position to:
(a) gain an advantage for themselves or someone else; or
(b) cause detriment to the corporation.
‘Impropriety’- objective
• Impropriety consists in a breach of the standards of conduct that would be expected of
a person in the position of the alleged offender by reasonable persons with knowledge
of the duties, powers, and authority of the position and the circumstance of the case –
R v Byrnes at [25]
• Impropriety can consist of an abuse of power, doing an unauthorised act or a conflict
of interest
• No need to show dishonesty
• Re HIH Insurance v Adler: Mr Adler was found to have improperly used his
position as a director of HIH and Pacific Eagle and officer of HIH Casualty and
information obtained in those positions to gain an advantage personally, in relation, to
large, undocumented and unsecured loans. Mr Williams, who was a director and CEO
of HIH and HIHC, was found to have improperly used his position to gain an
advantage for Mr Adler and cause detriment to HIH, and HIHC and PEE, in
authorising the payments and bypassing the company's investment committee
approval process.
‘Gain Advantage or cause detriment’
Need to show that the purpose was to gain an advantage or cause a detriment, not that the
actual conduct in fact caused an advantage or detriment (
Chew v R
(1992) 173 CLR 626)
Section 183(1)- Improper use of information
Use of information--directors, other officers and employees
(1) A person who obtains information because they are, or have been, a director or
other officer or employee of a corporation must not improperly use the information to:
(a) gain an advantage for themselves or someone else; or
(b) cause detriment to the corporation.
Note 1: This duty continues after the person stops being an officer or employee of the
corporation.
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