COMPARATIVE ANALYSIS of INDONESIAN LAW and AUSTRALIAN LAW ON PROTECTION of DIRECTOR'S LIABILLITIES iN INSOLVENT TRADING

I. INTRODUCTION


This essay will contrast between the laws on companies under Indonesia jurisdiction and Australia jurisdiction to protect a director against his personal liability in exercising his duty to prevent Insolvent Trading. Particularly it will discuss on how the laws in both jurisdictions made differences in shaping the construction of defenses provided for a director in doing the Insolvent Trading, also differences in choices of defenses for director and how the director should ensure that he is not liable to Insolvent Trading.

The defenses provided by the laws in both jurisdictions can be used by a director to protect him from his personal liability arising from Insolvent Trading as long as he can prove to the court that the debt is not incurred and the company being solvent at the time the transaction is made. Therefore the issues need to be analyzed more heavily, in this respect, are some various approaches, assessment and tests applied by the courts in Australia and Indonesia regarding whether or not the debt is incurred by the company and the company is solvent when the transaction was made. Importantly, how the courts make balance between such director's liability and the legitimate protection to directors through the provision on defenses will also be elaborated here.

Further, this essay is to find out on how the laws in Australia, for some extents can be adopted by and can be applied by the Indonesian laws for the development of laws in Indonesia regardless the difference of legal system of the both jurisdictions. Also, in some certain situations, it is to examine some aspects of the Indonesian laws in shaping the construction of defenses which could be considered by the laws in Australia to be applied.

II. BACKGROUND


The laws on companies in Australia including the Corporations Act 2001 have imposed a director to do such broad and very wide duties and responsibilities to a company. The board of directors is the only organ of company who has the sole power to manage the company. The shareholder
have no power to give directions to the board of directors overruling its business decisions. One of the duties is to prevent the company from being insolvent. On the other hand, a director is required by the laws to provide and maintain sufficient finance to the company to operate the business and to make profits on it. Thus, he should be careful on any decision he made in acquiring any fund from any financial resources and he should maintain the asset and liability in such a way so that the company would not become insolvent by the decisions he made.


In Australia, although for some extents the laws have clearly provided some defenses to the director to protect his liability in Insolvent Trading, it would have been somewhat difficult for the director to use such defenses provisions to protect his rights since the laws have imposed very broad duties of director to a company. Therefore, this essay will also look on how the laws in Australia make balance between the duty of director to prevent the Insolvent Trading and the legitimate protection which have been or should be provided by the laws.

Like Australia, principally the management of a company under Indonesian laws is centralized on the hand of the board of directors. However, the laws on companies in Indonesia have allowed the other organ of company such as the board of supervisory (board of commissioner) and the general meeting of shareholders to involve or intervene with the management operation of company. This situation has been used by director to protect or limit his personal liability in Insolvent Trading. It is true that for some basic and principal extents, the laws on companies in Indonesia requires director to make his own original decision genuinely without having the other organ's involvement, however, the laws in Indonesia should make a specific clarity regarding in what extent the directors should make the decision solely and genuinely and in what extent the director may ask the other organ to give advises or approval to the decisions. Indonesian law does not apply a strict separation of powers and duties between the organs of company. This circumstance would legitimately protect director to limit his liability in Insolvent Trading.

Based on above paragraphs, this essay will look on whether the construction of defenses shaped by the Indonesian laws could be applied in Australia for balancing the director's liability in Insolvent Trading and the legitimate protection of his liability. What situation the tests and approach made by the Australian courts on this matter could be applied in Indonesian court to make balance between the director's duty in Insolvent Trading and the legitimate protection of his liability.

Hence, the main issues of this essay would be: firstly, on how the laws of both jurisdiction makes differences in describing the director's duties in Insolvent Trading; secondly, on how the laws of both jurisdiction makes differences in shaping the construction of defenses of director's liability in Insolvent Trading and thirdly, on in what extents some various court's approaches and tests in both jurisdictions could be considered for each other.

Finally, this essay is written from the creditor's perspective. It might be useful for creditors of both jurisdictions in fulfilling the need to understand the concept of Insolvent Trading and defenses of director's liability under different legal system between the civil law and common law, especially when cross border banking and finance transaction are becoming greater.

III. DIRECTOR'S DUTIES TO PREVENT INSOLVENT TRADING

III.A. DIRECTOR'S DUTIES IN GENERAL

AUSTRALIA
In Australia, director's duties are stipulated by the Corporations Act 2001 (Cth) and the general law. Under these laws, a director has a broad duty and power to the company. Since the power of management of a company is almost always vested in the board of directors, the duties cover a fiduciary duty that falls into two broad categories, that is, (i) skill, care and diligence and (ii) loyalty and good faith in the best interest of company and. These duties are provided by the general law and by the Corporations Act 2001 (Cth). The duty to prevent Insolvent Trading falls under the duty of skill, care and diligence.

The duties are conducted in the interest of the company as a whole. This would mean that the duties would involve a consideration of the interest of shareholders of the company, but it may also involve a consideration of the interests of creditors in particular circumstances when the company is insolvent or is nearly insolvent.

Duty to act in good faith for the best interest of company is provided in section 181, 183, 184 (2) and (3), while the general law has broken this kind of duty into duty to act for a proper purpose, duty not to fetter discretions, and duty to avoid conflict of interest . Meanwhile, as well as having duties of loyalty and good faith, the directors of a company owe duties of skill and care to the company. This kind of duty is provided by the general law and section and section 180 (1) of the Corporations Act 2001 (Cth). The Corporations Act 2001 (Cth) has also provided the rule of defenses for claims under section 180 (1), the rule is called "business judgment rule". A director who makes a business judgment is assumed to have made according to the proper degree of skill and diligence if director has fulfilled the elements set out in that section. Under Australian law, it is also possible for directors to be relieved from his breach of duty by a vote at a general meeting of the company and by the courts.

In Australia, only a board of directors who has the power to manage the business and affair of the company. The shareholders have no power at all in intervening with such management. Unlike Indonesia, the laws on companies in Australia do not recognize kind of a supervisory board which can control or give some sort of approvals to the directors' conducts in the company management.

INDONESIA
Meanwhile, in Indonesia, the duties of director is provided in the Indonesian Company Law Number 1Year1995 ("Indonesian Company Law"). There are 3 organs in a company, that is, (i) the general meeting of shareholders, (ii) board of directors and (iii) supervisory board (commissioner). The management of a company is of the power and duty of the board of directors. Since there is no strict separation of duties and powers between those three organs, the general meeting of shareholders and the commissioners, in some circumstances, involve in the management conducted by director, such as in the event director wish to transfer all or most of the asset of company to any third party or put them into encumbrances the asset, the prior approval from general meeting of shareholders shall be made. While the supervisory board also involves in the management by supervising director's conduct and made necessary advises to director's conduct. In some special cases, the supervisory board is allowed to act as a director if it is provided so in the article of associations.

Like Australia, Indonesian Company Law also request director to act in good faith, care and diligence for the best interest of the company although it does not distinct in a specific way between the duty to act in good faith (fiduciary duty) for the best interest of company and the duty to exercise reasonable degree of care and diligence. It only mentions that directors should act in good faith for and be responsible to what become the interest and the benefit of the company. If there is a breach of such duties, director will be personally liable.



III.B. DUTY TO PREVENT INSOLVENT TRADING

AUSTRALIA
Under Australian laws, director's duties to prevent insolvent trading is provided in section 588G and 588V of Corporations Act 2001 (Cth). The important element of the section 588G are (i) the company is incurring a debt when the company is insolvent and (ii) the nature of any transaction which can be classified as debt.

The provision of section 588G is extended to section 588V imposing duty to prevent Insolvent Trading for a holding company to the insolvency of its subsidiary company. The important elements of section 588V are: (i) the relevant subsidiary company incurs a debt; (ii) the relevant subsidiary company is insolvent at the time the transaction was made or becomes insolvent by incurring that debt; (iii) at the time the transaction is made, there are reasonable grounds that the subsidiary company is insolvent or would become insolvent; and (iv) director of the holding company is aware at the time that there are reasonable grounds for suspecting that the subsidiary company is insolvent or would become insolvent.

INDONESIA
Meanwhile, in Indonesia, the duty of director to prevent Insolvent Trading is not only provided in Indonesian Company Law, but also in Bankruptcy Law. The Bankruptcy Law does not define the meaning of Insolvent Trading specifically and does not set out the nature of transactions which can be categorized as Insolvent Trading. Unlike Australia, section 588 G (I A) clearly specify on what type of the transactions which could be classified as Insolvent Trading. Moreover, there is no such extension of duty to prevent Insolvent Trading imposed by laws for a holding company to the insolvency of its subsidiary company. It is the general principle, however, that under the Indonesian laws on companies, that the shareholders would be liable if they approve to or is involved in the director's action to do Insolvent Trading. Thus the holding company would only liable if it involves in the decision made by the director of subsidiary company which decision has made the subsidiary company incurring the debt and becoming insolvent.

Further, article 89 of Indonesian Company Law provides the director's duties when the company is insolvent. It is said that any member of the board of directors would be personally and individually liable for any damages arising from the insolvency of the company in the event (i) such insolvency is caused by the breach of the director's duties and (ii) the company's asset is not sufficient to cover losses incurred as a result of insolvency. Thus any conduct of directors which could bring the company to become insolvent is considered as a breach of director's duties to the company. Even, based on article 41, any legal action of the directors of a company which has been declared insolvent which prejudice the interests of the creditors which were performed before the declaration of bankruptcy can be annulled. In conclusion, any transactions made by director of a company which satisfy article 89 of Indonesian Company Law in conjunction with the article 41 to 46 of Bankruptcy law would be considered as the transactions similar to Insolvent Trading in Australia. Thus, Indonesia laws covers the meaning of Insolvent Trading more broadly than s 588G of the Corporations Act 2001. However, the spirit of article 89 of Indonesian Company Law in conjunction with the article 41 to 46 of Bankruptcy law is similar with the spirit of s 588G of the Corporations Act 2001.

Indonesian Company Law provides that any member of the board of directors should be individually liable if there is such a breach, the law does not allow the directors to jointly liable. In this regard, the court will examine how far any member has been involved individually in the process of decision making.In this respect, Indonesian court in making judgments whether or not the director has breached the duty, has been applying the subjective test. The court will look on the special facts and circumstances to the relevant director individually on case by case basis. The court does not examine the result of the director's conduct but on the process to make a decision. The procedure and the preparation behind the decision made by directors, therefore, is examined by the court. It focuses only to the backgrounds the decision is being made regardless it is beneficial or not for the company at the end. Particularly, it examines whether or not the decision is made based on some basis informed to the company, whether the directors has analyzed and anticipated the risk which is associated to the decision.

Further, Indonesian laws do not set out the minimum standard of duty of care and diligence. In this respect, the court makes judgment by examining, among other things, the guideline of good management generally applicable to the companies including the meeting between directors and supervisory board, the regular consultation with the shareholders and supervisory board, regular report to the company on any important information including financial report made based on the applicable relevant accountancy standard and information exchange and asset or finance monitor and also obtain advises from any independent experts.

There are also other laws other than Indonesian Company Law which requires the director's duties related to the Insolvent Trading. They are including: (i) duty to make an annual financial report which reflects the real situation of the asset, liabilities, capital and earnings of the company. The report should be made in the standard form issued by the Association of Indonesian Accountant. The report should be signed and approved by all members of the board of directors and supervisory board which means that the directors and supervisory board are responsible to any content of the report; (ii) duty to protect the company's creditors' interest against certain minimum repayment of the debt.


IV. DEFENSES OF DIRECTOR'S LIABILITY IN INSOLVENT TRADING

AUSTRALIA
Under Australian law, a director would be personally liable for the Insolvent Trading if he breach section 588 G (1) and 588 G (2) of the Corporations Act 2001 (Cth). The defenses of this kind of liability is stipulated in section 588 H providing that (i) director had reasonable ground to expert that the company was solvent; (ii) director had rely on another person reasonably; (iii) director is ill or "some other good reason"; (iv) director has taken reasonable steps to prevent Insolvent Trading.

The Corporations Act 2001 (Cth) has also extended this kind of liability to a holding company when the subsidiary company is insolvent by the Insolvent Trading made by director of the subsidiary company. This is provided in section 588 V and 588 X.

Despite of the defences provided in section 588 G and 588 X, the Business Judgment Rule under section 180 (1) can also be applied as defenses for director's personal liability in Insolvency Trading since the duty under section 588 G and 588 X falls under the duty of skill, care and diligence.

INDONESIA
In Indonesia, the defenses of director's liability in Insolvent Trading are provided in the article 90 of Indonesian Company Law section 90 in a very brief way. It provides that a director who is able to prove that the insolvency of the company is not caused due to his fault and negligence should not be liable to any losses in the company as a result of the insolvency. The onus of proof is on the director's hand and the proof is made in such a negative way means that he has to prove that his conducts has not caused the insolvency. Since any director has to involve in any management, he could not easily claim himself that he is not involved in the decision taken by the board of directors. Although the provision of article 90 does not expressly mention the defenses by the director relying on other person or the director having taken reasonable steps to prevent Insolvent Trading like Australia, article 90 impliedly accepts such ideas for defenses as long as the director can prove that he is not fault or negligence by relying the other persons and by having taken reasonable steps to prevent Insolvent Trading.

Some situations could also be applied as defenses for a director such as he was not involved in that decision making because he has expressed his objection against that decision, in the director's meeting, the objection of which should be made in written in a minute of meeting, or the director being away from the office, being not present in the meeting and decision was not being executed by the company when he returns to the office. In addition, a director might also be released from his liability in Insolvent Trading if the fault or negligence resulting the Insolvent Trading is made within a certain period of financial year the financial report of which has been approved by the shareholders of the company.

Other defenses can be drawn from the provision in Indonesian Company Law which allows other organs in a company such as a supervisory board and the shareholder's meeting to involve in companies' decision making or in management. In this respect, a director can be released from his personal liability in Insolvent Trading if those organs made some involvements in that Insolvent Trading. Important to note that, when there is a conflict of interest between the director and the company as provided in article 100 section 2 of Indonesian Company Law, the members of supervisory board could act on behalf of the company.


V. THE OPERATION OF DEFENSES PROVISION

This part will contrast between the tests applied by the Australian Court and The Indonesian Court in exercising the defenses provision. It is important for director to understand the court's assessments so that he can exercise the defenses provision for legitimate protection of his interest when he performs the duty for the best interest of company.

TEST ON INCURRING DEBT by Courts in Australia
In Australian, the courts apply the tests on (i) the moment the company becoming insolvent and (ii) when the debt incurs and falls due and repayable. It is quite difficult to determine the moment at which insolvency first arose. In relation to this, section 95 of Corporations Act 2001 stipulates that (i) a person is solvent if, and only if, the person is able to pay all the person's debts, as and when they become due and payable; (ii) a person who is not solvent is insolvent. In this respect, the test applied by the court is primarily the test on cash flow basis, that is, whether or not the assets of a company can be used for repaying the company's debts when the debts are due not on a balance sheet test (where assets must exceed liabilities) .While assets are referring to cash and non-cash asset.

In Russel Halpern Nominees Pty Ltd v Martin & Anor the debt is incurred when entering into the contract of lease. However, according to Castrisios v Mc Manus, the liability of tax payment is not considered as debt. Further, in Jelin Pty Ltd v Johnson & Anor, the judgement against a company is not considered as incurring a debt. Importantly, according to Hawkins & Ors v Bank of China when the guarantee is executed the debt is incurred, thus the debt included a contingent debt. However, interest is not considered as debt based on John Graham Reprographics Pty Ltd v Steffens & Anor .

TEST ON INSOLVENY by Courts in Australia
Having the debt has been proven exist or be incurred by the company, director, to escape from his liability should prove that he has reasonable grounds that the company is solvent. The tests on the reasonable ground to suspect the insolvency are various. In Metropolitan Fire Systems Pty Ltd v Miller, the test is objective based on the standard appropriate of knowledge of and participation in the incurring of the relevant debt. While the great different meaning of "suspect" and "expect" is illustrated by 3M Australia Pty Ltd v Kemish, as follows:
"To suspect is more than a mere idle wondering whether something exists or not; it is a positive feeling of actual apprehension mistruct, amounting to a ‘slight opinion, but without sufficient evidence'."

"To expect is to anticipate the occurrence or the coming of an event which is more than a mere hope or possibility."

Further, in Quick v Stoland Pty Ltd, the correspondences made by director could be one indicator of the reasonable ground to suspect that the company may be insolvent. The tests covers the balance of objective test and subjective test with an emphasis on objective considerations such as the fundamental requirement of careful monitor the financial situation as illustrated in Commonwealth Bank of Australia v Friedrich. Additionally, it was said by Helen Horsington that in order to satisfy the requirements of the defenses, a director must prove that he had a great confidence in the solvency of company and maintain the solvency in a manner more than just hoping.

TEST ON DEFENSES by Courts in Australia
As to the defense by a reasonable reliance, the test has been developed in Capricorn Society Ltd v Linke. It is said that a director must as responsibly in the delegation and reliance, must inquire about the financial standing of the company on a regular basis. Moreover, in Statewide Tobacco Services Ltd v Morley, a director should not be entitled to ignore the company's affair which is of his obligation.

As to the defense of director being ill and not participated in the company's management, a test on awareness of insolvent continued for the whole of the relevant period is illustrated in Tourprint International Pty Ltd v Bott. Mr Bott (a director) was aware that there was a problem and had heard his fellow director complaining about cash flow. The test is objective on the basis of reasonable person which did not show a proper degree of commitment to involve in the financial management.

While the test on whether the director has taken reasonable steps to prevent the insolvency, Standard Chartered Bank v Antico give some samples such as a director to seek to persuade a managing director not to incur a debt, or to call a director's meeting with a consideration to stop the incurring of debts, or to resign, or to seek to have the company wound up, or have a consent from the authority to the incurring of a debt.

Meanwhile, the tests on elements of liability under section 588V is generally synonymous with the tests mentioned above against section 588G. Importantly, there are some factors in assessing reasonable ground to suspect the insolvency of the subsidiary company including (i) the commercial considerations supporting the belief of solvency as said in Standard Chartered Bank v Antico; (ii) holding company's expectation of potential revenue as decided in TCN Channel Nine v Scotney ; (iii) the subsidiaries ability to service debt according to International Business Strategy Pty Ltd v Lucas and (iv) a prediction of the ability of the subsidiary company to pay its debts according to Australian Securities Commission v MR Lawless & SL Lawless.


INDONESIA
Indonesian court applies different approach from that in Australia in assessing such defenses provision, the court only requires director to prove that his actions and decisions taken does not cause the insolvency of the company or to prove that such insolvency is not caused by his fault or negligence. Accordingly, the basic tests applied by the court is (i) whether or not the director's action is categorized as incurring the debt and (ii) whether or not the company is or become insolvent by incurring the debt.

TEST ON INCURRING DEBT by Indonesian Court
As to the test number (i), the Indonesian court applies the following various tests:
The debt is incurred by the company in accordance with the express provision mentioned in the relevant credit agreement.
Such agreement should also provide expressly on the certain due date of the credit facility to be repaid.
The debt is not incurred if the relevant security has been excercised by the creditors.
The credit agreement should not be against the laws and thus is not null and void.
It is suggested that the credit agreement should be made by the public notary and the debtor has issued a document underlying an acknowledgement of indebtedness.
The amount of debt should clearly consist of the principal amount, interest and penalties or other claims.
The debt which has been due and payable must be notified in writing by creditor to debtor.
Debt might be arising from the security agreement or guarantee agreement.
In the event the debt is restructured by the parties, the due date of the restructured debt is renewed.
Debt should be collected firstly by a warning letter sent by creditor to debtor informing that the debt is due and payable and request repayment from the debtor.
The debt only arises from the agreement relating to the banking and finance transactions

TEST ON INSOLVENCY by Indonesian Court
While as to the test number (ii) on whether or not the company is or become insolvent by incurring the debt, the Indonesian court has decided some various tests as follows:

The insolvency is occurred only if the insolvency is occurred if the company has two or more creditors and has failed to pay at least one debt which is due and payable.
The company does not have insufficient fund to repay the debt.

TEST ON DEFENSES by Indonesian Court
The basic tests mentioned above has been developed by the court. The test applied by the court in assessing the defenses provision in article 90 of Indonesian Company Law are including (i) director has prevented the insolvency of company by appointing an administrator or liquidator which appointment must comply with the Bankruptcy law or (ii) directors has declared a suspension of payment to the court according to article 22 of Bankruptcy Law although it is required that the inability of company to repay the debt must be examined firstly by the public independent auditor.

Since article 89 is very broad and general, in order the construction of defenses in article 89 becomes more clearly, Jerry Hoff set out a list of notable examples when the insolvency caused by the fault of or negligence of the director like (i) willful or careless neglect in carrying out management duties conducting proper bookkeeping and other record keeping; (ii) implementing decisions, without proper preparation, that will have far-reaching financial consequences; (iii) allowing incompetent directors to bind the company without financial indebtedness; (iv) failing to provide information to the supervisory board, thereby preventing them from properly performing their supervisory functions; (v) neglecting credit limits; (vi) failing to take proper and timely precautions clearly foreseeable risks and (vii) failing to investigate the creditworthiness of contract partners to whom the company delivers goods or services on credit, or prolonging credit for an excessive period.

VI. CONCLUSION

Indonesia and Australia has similarity in imposing the duties of a director in a company which is called as a fiduciary duty. The duty covers the duty to be loyalty and act in good faith and skill and diligence. The duty is conducted in the interest of the company. However Indonesia is different with Australia in a way the separation of power or duty between the owner of company and the control of the company and the management of company. Indonesia has no strict separation between those powers. In some extents, the laws allow the general meeting of shareholders and the supervisory board to be involved in the management conducted by the directors. While in Australia, it makes the strict separation of powers. The shareholders can not intervene to the management run by the directors. Thus the duty of director is very broad. In this respect Australia law has clearly provides the standard minimum of duty of care and diligence, unlike Indonesia.

As to the duty of director to the creditors of the company to prevent Insolvent Trading by the company, when the company is insolvent or near insolvent as provided under section 588G, Indonesian laws have not provided that duty as detail as that in Australia. Indonesian laws put the duty in a very general way that any member of the board of directors would be personally liable for any damages arising from the insolvency of the company only in the event such insolvency is arising by his fault or negligence and the company's asset is not sufficient to cover losses incurred as a result of insolvency. Therefore any legal action which prejudice to the company's asset in repaying the debt is considered as Insolvent Trading.

The construction of defenses to the personal liability of director to the company in failing to prevent the Insolvent Trading is different between Indonesia and Australia. Under Australian law, the defenses are realized into some certain form of the legal actions as specified in section 588 H and 588 X. While under Indonesian law, the defenses are not broken down into some specific legal actions. The defenses under Indonesian law is very broad, as long as the director can prove that the insolvency was not caused by his fault and negligence, he would not be personally liable for such insolvency. Based on such concept, the court, in assessing the defenses, would only examine on whether or not the debt is incurred when the company is insolvent or become insolvent by incurring that debt. Thus, the tests applied by the Indonesian test as to when the debt is incurred and when the company is solvent or not under insolvency. As in Indonesia the judge does not make laws, the assessment by the courts is conducted based on statutory.

While in Australia, the tests are quite a lot and various. They are different from one case to another case. Those various tests on defenses mostly on the basis of the objective test.

Thus, Australia should consider to adopt the idea of Indonesian laws for not to be strict in making separation between powers of directors, shareholders and supervisory board. For some extents, Australian laws would need to request shareholders to involve in the management's decision taken by the director to prevent the inability of directors being responsible to Insolvent Trading in the future.

On the other hand, due to the nature of defense provision which is very general, the various interpretations might be arises. Therefore, although Indonesia is not a common law country, Indonesian court might also adopt some various tests applied by Australian court to develop the assessment of the applicability of defenses provision under Indonesian Company Law and Bankruptcy Law.



The reference of Insolvent Trading is, under Australian law, refers to section 588G of the Corporations Act 2001. While in Indonesia, it refers to any transaction which results to the insolvency of company as provided in the Indonesian Company Law and Bankruptcy Law.
The duties are provided under Corporations Act 2001 (Statutory Duty) and under the general law. The statutory duties are provided in section 180 regarding duty of care and diligence, section 588G regarding duty to prevent Insolvent Trading, section 181 duty to act in good faith, section 182 regarding use of position of directors, section 183 regarding use of information. While under general law, the duties of directors are also divided into two great scope. That is, the duty of care and diligence and duty to act in good faith and loyalty (please see the figure 11.1 on Classification of Duties in Pamela Hanrahan , Ian Ramsay and Geof Stapledon, Commercial Applications of Company Law (2002) 230.
However please see Geoffrey Nicoll, Recognition of Proprietorial Interest in Management and Corporate Governance, (1996), 7, Australian Journal of Corporate Law,96-97. It is said that for "some procedure' the board of directors might be required to inform the general meeting as to aspects of the management of the company's business, the directors are also required to furnish information to shareholders either in general meeting or by periodic report.
Automatic Self Cleansing Filter Syndicate Co Ltd v Cuninghame [1906]2 Ch 34 (Court of Appeal), the summary of which is taken from L.S.Sealy, Cases and Materials in Company Law (1985) 187 to 189.
Pamela Hanrahan , Ian Ramsay and Geof Stapledon, Commercial Applications of Company Law (2002) 120-121.
See article 87 and 100 of Indonesian Company Law, see also Daniel Fitzpatrick, Corporate Governance, Economic Crisis and the Indonesian Banking Sector (1998) 9, Australian Journal of Corporate Law 178.
ibid
see above n 2.
see above n 2.
Hanrahan, Ramsay and Stapledon, above n 5.
See above n 2.
Please see Daniels v AWA Ltd (1995) 13 ACLC 614; 16 ACSR 607 for duty of care and diligence; Standard Chartered Bank of Australia v Antico (1995) 13 ACLC 1,381: 18 ACSR 1 for duty to prevent Insolvent Trading; some cases for duty to act in good faith in the best interest such as Greenhalg v Ardene Cinemas Ltd [1951] Ch 286 at 291, Mills v Mills (1983) 60 CLR 150, Whitehouse v Carlton Hotel Pty Ltd (1987) 162 CLR 285; 5 ACLC 421; 11 ACLR 715; Howard Smith Ltd v Ampol Petroleum Ltd [1974] AC 821; (1974) CLC.
Hanrahan, Ramsay and Stapledon, above n 5, 248.
Hanrahan, Ramsay and Stapledon, above n 5, 260, it is said that the interests of company consists of : members, the company as a commercial entity separate from its members, creditors, other companies within a group of companies or employees, customers, suppliers and community.
Kinsella v Russel Kinsela Pty Ltd (in liq) (1986) 4 NSWLR 722.
See above n 12.
See above n 12.
See also Howard Smith Ltd v Ampol Petroleum Ltd [1974] AC 821 at 832.
See also John H Farrar, Towards a Statutory Business Judgment Rule in Australia (1998) 8, Australian Journal of Corporate Law,237-243.
Hanrahan, Ramsay and Stapledon, above n 5, 317 and see also some extents where the members can not ratify a breach of duty in Miller v Miller (1995) 16 ACSR 73.
section 1317S. See also H A J Ford, R P Austin and I M Ramsay, Ford's Principles of Corporations Law (2001), [8.420].
see above n 3 and n 4.
see above n 3 and n 4.
Daniel Fitzpatrick, Corporate Governance, Economic Crisis and the Indonesian Banking Sector (1998) 9, Australian Journal of Corporate Law 178
Under Indonesian the legal system (civil law) the judge does not make laws. The basis for judge to decide the case is only the statutory, rules and regulations.
See article 1point b of Indonesian Company Law, however based on article 93 of Indonesian Company Law a company is not compulsory to have a board of supervisory.
See article 1 point d of Indonesian Company Law.
See above n 6.
See article 87 of Indonesian Company Law.
See article 97 of Indonesian Company Law.
See article 99 of Indonesian Company Law.
Jerry Hoff, Gregory Churchill (ed), Indonesian Bankruptcy Law (1999), 151
See article 84 of Indonesian Company Law.
Theresa Noble, When Does a Company Incur a Debt Under the Insolvent Trading Provisions of the Corporations Law (1994) 12, Company and Securities Law Journal, 297.
John Mosley, Insolvent Trading: What is a debt and When is One Incurred? (1996) 4, Insolvency Law Journal, 155.
The Bankruptcy Laws includes (i) the Bankruptcy Law (faillisementverordening, Staatsblaad 1905 No. 217 juncto Staatsblad 1906 No. 348). (ii) Government Regulation in Lieu of Law Number 1 of 1998, (iii) Eludication to Government Regulation in Lieu of Law Number 1 of 1998, (iv) Law Number 4 of 1998 and (v) Eludication to Law Number 4 of 1998.
Indonesian Civil Code.
Section 84 (b) of the Indonesian Company Law
Jerry Hoff and Gregory Churchill (ed), above n 32,152-154.
ibid
Ibid.
Ibid.
Jerry Hoff and Gregory Churchill (ed), above n 32,156-157.
Ibid.

see above n 5 and n 13 and see also Emillios Kyrou, Directors'Duties, defences, Indemnities, Acces to Board Papers and D & O Insurance Post CLERPA (2000) 18, Company and Securities Law Journal, 555-560.
Jerry Hoff and Gregory Churchill (ed), above n 32,154.
section 60 (d) of Indonesian Company Law
Under Indonesian legal system, the judge does not make laws, thus, the court's decision could not be used for the legal basis of the operation of any statutory provisions. See Benny S Tabalujan, Indonesian Insolvency Law (1998),5-7 .
See above n 35 and n 35.
Mallessons Stephen Jacques, Australian Finance Law (5th ed 2003), 624.
Ibid 625.
Ibid 625.
[1987} WAR 150; 10 ACLR 539; 4 ACLC 393.
[1990] 4 ACSR1; 9 ACLC 287
[1987} 5 ACLC 463
(1992) 10 ACLC 588.
(1987) 5 ACLC 904.
(1997) 23 ACSR 699
(1986) 4 ACLC 185.
(1998) 29 ACSR 130.
(1991) 9 ACLC 946.
Helen Horsington, Director's Duties During Insolvency (2001), 124.
(1995) 17 ACSR 101.
(1990) 2 ACSR 405; 8 ACLC 827.
(1999) 32 ACSR 201.
(1995) 131 ALR 1; 13 ACLC 1381.
(1995) 131 ALR 1; 13 ACLC 1381.
(1995) 17 ACSR 116.
(1995) 17 ACSR 269.
(unreported, Tas Magistrates Ct, 19 December 1995).
PT Ometraco Corporation Tbk v some banks, Decision of Supreme Court Number 01/K/N/1998.
PT Hutama Karya v PT Jaya Readymix, Decision of Supreme Court Number 04/PK/N/1999.
Ny Ira Chrysanti v Eddy Sudarmo, Decision of Supreme Court Number 03 PK/N/1999.
PT Bank Niaga v PT Dharmala Agrifood, Decision of Supreme Court Number 02/PK/N/1999.
PT Kutai Kartanegara Prima Coal v Hasim Sutiono, Decision of Supreme Court Number 02K/N/1999.
IBJ Asia Limited v PT Cakrawala Andalas Televisi, Decision of Supreme Court Number 06K/N/1999.
ibid
PT Bank Artha Graha v Cheng Basuki, Decision of Supreme Court Number 43K/N/1999.
PT Hanil Bakrie Finance v PT Dharmala Sakti Sejahtera, Decision of Supreme Court Number 08K/N/1999.
Badan Penyehatan Perbankan Nasional v PT Sempati Air, Decision of Supreme Court Number 24K/N/1999.
See above n 75. See also Kartini Mulyadi, A Critical Assesment of Recent Bankruptcy Law Reforms, an article in book by Timothy Lindsey (ed), Indonesian Bankruptcy, Law Reform and The Commercial Court (2000) 54. It is said that debt, under article 1233 and 1234 of Indonesian Civil Code are (i) an agreement to provide an object; (ii) an agreement to perform a service; (iii) an agreement not to perform a service.
PT Jaya Readymix v PT Primacoat Lestari, Decision of Supreme Court Number 01/K/N/1999.
See above n 80.
LG Electronic Inc v PT LG Bangunindo Electronic, decision of Supreme Court Number 02/K/N/1998.
PT Cipta Niaga Cabang Utama Surabaya v Subekti, Decision of Supreme Court Number 03K.N/1999.
Jerry Hoff and Gregory Churchill (ed), above n 32,155.


Tulis Komentar

Nama

E-mail (tidak dipublikasikan)

URL

Komentar

News & Article
Komentar Terbaru
  • Alex
    There's a terrific amonut...
Copyright 2018 Law Firm Jakarta Indonesia SNS All Rights Reserved