Emma is a director of Kala Pty Ltd (Kala). Kala is performing badly. It has no cash left and cannot pay wages. Emma decides the best thing to do is buy stock on credit. The goods do not sell and Kala goes into liquidation (i.e. the liquidator has to wind up the company by selling its free (un-pledged) assets to convert them into cash to pay the firm's unsecured creditors).

Under s 588G of the Corporations Act 2001 (Cth) (the Act), directors are under a duty to prevent their company from incurring debts while it is insolvent. Emma is prosecuted under the Act and found guilty of insolvent trading by a single judge in the Supreme Court of Victoria.

She appeals to the Victorian Court of Appeal and the Court of Appeal upheld the single judge's decision and explained its reasons (ratio decidendi).

a. The facts indicate that 'Emma is prosecuted under the Act'. Which classification of law does this legal proceeding come under? Give reasons.

b. Explain to Emma the effect of the Court of Appeal's decision on any future cases in Victoria, in other States and in the High Court of Australia.