Meaning of unlawful

DEAR ALL

There is confusion as to the meaning of unlawful. Most think that just because an employee has breached a policy, mandate, or process that this is unlawful and therefore an RI. This is not the case. For such an act to become unlawful it must have been done in a dishonest manner (R v Ghosh), or it must have been a malicious (intending or intended to do harm). If these do not apply then any breach of any corporate governance code is not an unlawful act. In respect of a breach of a fiduciary, this involves where a director has not acted in the best interests of the client, did not acts with care and skill etc. As stated in my advisory opinion sent on 25 January 2018 this covered by the business judgment rule. However, could it be said that by breaching a policy, mandate, or process the director has not acted in best interests of the company etc. This will only be the case where it has been proven via a forensic investigation that the director was dishonest or malicious. The director in not complying with a process etc could have done it as a result of a mistake in the ordinary course of his/her duties and that’s not unlawful. If you have evidence that there was a lack of skill and the director should have had the proper skill then that could be unlawful. 

Be careful you have to have objective unbiased – in other words proof/evidence that has a greater than 50% change of being the truth (meaning of reason to believe). 

Case Study

If VAT is calculated at 14% but client calculates at 12% - is that UNLAWFUL?

If VAT return not sent in – is that UNLAWFUL?

A yes or no answer is not enough. You are under oath and the judge is looking at you, what would you tell the judge why or why not the above are unlawful?