The High Court has granted ASIC special leave to appeal against a Queensland Supreme Court of Appeal decision in King v Australian Securities and Investments Commission [2018] QCA 352 to clarify the meaning of ‘officer’ under section 9 of the Corporations Act.

In ASIC v King (which relates to the MFS Group’s management of an investment scheme called the Premium Income Fund) the Supreme Court originally decided that it was sufficient for ASIC to prove that a person merely had significant influence over a company commensurate with an officer by looking at the role the person in question plays in the company. This was the interpretation considered by the High Court in ASIC v Shafron (discussed here).

However, the Court of Appeal determined that for a person to be deemed an officer, that person must “act in an office” of the corporation “in the sense of a recognised position with rights and duties attached”.

The trial judge found that the CEO of MFS Group, Mr. King, and deputy CEO, Mr. White, breached their responsibilities as officers in the company. Mr. White and others were also found to have falsified documents relating to certain payments.

The Court of Appeal concluded that ASIC was required to prove that Mr. King acted in an “office” in the company, in order to be considered an “officer” and that it had failed to do so.

The High Court will now decide the issue.