Date of this Version


Document Type

Journal Article

Publication Details

Fairall, P. A. (1995). Improper use of position by company officers: The Queen v Hopwood & Byrnes. High court review, 1, 7 pp.



The facts are complex, but in essence the Crown alleged that the defendants, as directors of Magnacrete Limited ("Magnacrete"), committed that company to guaranteeing an overdraft facility in favour of Vicksburg Pty Ltd ("Vicksburg"). Vicksburg had been floated for the specific purpose of taking up an anticipated shortfall under a convertible note issue by Jeffcott Investments Ltd, ("Jeffcott"). Byrnes was managing director of Jeffcott and Hopwood was a substantial shareholder. The independent directors on the board of Magnacrete were not informed of this transaction. The trial judge made adverse findings against the defendants including (i) that they had acted in a situation of conflict of interest; (ii) that their purpose was to benefit Jeffcott; (iii) that they acted without authority, and (iv) that they did not tell the other directors what they were doing. The Court of Appeal allowed the appeal and quashed the convictions under 229(4) on the ground that the Crown had failed to prove the necessary mens rea. Bollen J referred to passages in Chew v The Queen (1992) 173 CLR 626; 60 A Crim R 82 which, his Honour considered, supported the need for mens rea in relation to improper use of office.