Background
In this case, the plaintiff Mr. Schwartz was disqualified from managing a corporation because he was convicted of an offense that involved dishonesty, which is punishable by a minimum of three months imprisonment. The law disqualifies such persons from managing corporations (Gobert & Punch 2003). Mr. Schwartz pleaded guilty to five charges which included receiving payments of youth allowance from the center link, which he was not entitled to. He had under-declared his employment income and received income that was exempted from tax assessment. He also obtained social security payments to which he was not entitled. His status did not anywhere come close to the category of those who needed social security.
The amount he obtained from dishonestly amounted to $ 13,578.94 and he was placed on two good behavior bonds with $ 600 recognizance under the crime act. The offenses were noted after data matching was done between the center link and the Australian taxation office. Mr. Schwartz’s offenses were said to relate to his earlier period of life and the evidence before the court showed that he had repaid the debt to center link and had undertaken to counsel. The period of disqualification was to start the day Mr. Schwartz was convicted and was to last for 5 years after that day. The corporation act provided him with an opportunity to apply to the court for leave to manage the Baby Belle Company provided he was not disqualified by ASIC. ASIC was provided with the notice of the application and it advised the Federal Court of Australia that it did not oppose the application; neither did it propose to attend the hearing of the application.
Analysis
The Court applied principles that required the applicant to gratify the Court that it should make an exception to the legislative policy underlying the prohibition (Michalowski & Kramer 2006). It applied the principle of legislative policy, which has the objective of protecting the public and not punishing the offender (Benson & Cullen1998). Its other objectives were to deter others from engaging in similar conduct as well as deter them from abusing the corporate structure to the disadvantage of those dealing with a company like investors, creditors, and shareholders (Schlegel & Weisburd 1994).
The other principle that the court applied is that of hardship and granting of leave. According to this principle, hardship alone is not enough to justify granting of leaves (Simpson 2002). Another argument was that the corporation had grown due to the hard work and dedication of Mr. Schwartz; hence it was not logical to receive such harsh punishments. The independent evidence of Mr. Goodman described the applicant as well mannered, hardworking and successful candidate. This evidence raised concerns about whether the applicant was running the company in line with the provisions of the Corporations Act. The court had to consider the assessment of risks to those who would deal with the plaintiff when assuming the role of a director.
Conclusion
The application was dismissed since the court was neither required nor able to resolve the issue. The role of Mr. Goodman to the company was not clear and so was how the company was operated. Nonetheless, the case remains open for Mr. Schwartz to make a fresh application in case enough evidence is available, as provided for in the law (Salinger 2005).
Reference List
Benson, M. & Cullen, F. (1998) Combating corporate crime: local prosecutors at work. New York. UPNE.
Gobert, J. & Punch, M. (2003) Rethinking corporate crime. Cambridge. Cambridge University Press.
Michalowski, R. & Kramer, R. (2006) State-corporate crime: wrongdoing at the intersection of business and government. Chicago. Rutgers University Press.
Salinger, L. (2005) Encyclopedia of white-collar & corporate crime. Chicago. SAGE.
Schlegel, K. & Weisburd, D. (1994) White-Collar Crime Reconsidered. New York. UPNE.
Simpson, S. (2002) Corporate crime, law, and social control. Cambridge. Cambridge University Press.