Task A (50 marks) Read pages 2975 to 2996 in Chapter 23 of the judgment in Australian Securities and Investments Commission v Rich [2009] NSWSC 1229 and answer the following questions: 1. What is the...

Task A (50 marks)
Read pages 2975 to 2996 in Chapter 23 of the judgment in Australian Securities and
Investments Commission v Rich [2009] NSWSC 1229 and answer the following questions:
1. What is the business judgment rule (5 marks) and what is the principle behind
it? (15 marks)
2. Justice Austin compares the US model and the Australian position in respect of
business judgment rules. Who, according to Justice Austin, bears the burden of
proof of the elements of s180(2)? (5 marks) Is this the same as the position
taken in America in respect to its business judgment rule? (5 marks)
3. Does Justice Austin agree with ASIC’s submission that in Australia (unlike
America) the defence is not available if the decision taken by the director is
based on an unreasonable belief? (5 marks) Why? (15 marks)
Where possible, you should refer to appropriate paragraphs of the judgment to support your
answer.
Introduction to Task B
Since the decision in ASIC v Rich there has been discussion of a ‘stepping stones’ approach in
proceedings brought by ASIC.
The following paragraph is the abstract to an article by Abe Herzberg and Helen Anderson
entitled “Stepping stones - from corporate fault to directors' personal civil liability” [online] in
the Federal Law Review,