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nsw_caselaw:549ff7443004262463c68ec8:269 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | • previous unblemished character;
• further contraventions unlikely.”
365 It must be remembered that a pecuniary penalty is an additional sanction and due consideration must be given to the effect of a declaration of contravention. As Santow JA pointed out in Vines at 545 [194 (iii)] the level of seriousness must be such as to justify a superadded pecuniary penalty over other sanctions that include the very real prior sanction by way of reputational damage for a professional person of actually declaring a contravention to have occurred.
5.1 Pecuniary penalty and Mr Macdonald
366 The considerations that lead to the conclusion that Mr Macdonald’s contraventions were serious have been addressed already. | 269 |
nsw_caselaw:549ff7443004262463c68ec8:270 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 367 In my view, punishment and general deterrence and, with respect to the contraventions in the last three declarations against Mr Macdonald, personal deterrence demand the imposition of a pecuniary penalty in addition to the period of disqualification of Mr Macdonald.
368 ASIC seeks a pecuniary penalty in the range $1.47m - $1.81m. It calculated this amount by attributing a penalty in the range $120,000 - $130,000 for the contraventions in declarations 2 and 3, the failures to advise the 15 February 2001 Meeting of the over emphatic language in the Draft ASX Announcement and the limitations in the reviews by PwC and Access Economics. ASIC had attributed two contraventions to these latter failings.
369 The same range was applied to the contravention in declaration 8, the failure to consider disclosure of the DOCI Information.
370 To the contraventions in declaration 1 and declarations 4 – 7, the announcements to the public, ASIC attributed a penalty in the range $140,000 - $160,000. | 270 |
nsw_caselaw:549ff7443004262463c68ec8:271 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 371 And for the deliberate announcements in declarations 9 – 11, ASIC attributed a range of $170,000 - $190,000.
372 ASIC’s calculation on the basis of 12 contraventions led to an aggregation, it said, in the range $1.57m - $1.91m. In fact the aggregation is in the range $1.69m - $1.89m. ASIC then discounted the aggregation to its above suggested pecuniary penalty range.
373 If that mathematical approach is taken with respect to the 11 contraventions I have found, the aggregation would be in the range from $1.57m - $1.76m.
374 In my view attributing amounts of this order to the contraventions is significantly excessive. The maximum penalty to be reserved for the worst cases is $200,000 per contravention. ASIC’s approach does not take adequate account of the other sanctions of declaration of contravention and period of disqualification.
375 Mr Macdonald submitted that a pecuniary penalty in the range of $200,000 - $250,000 was appropriate. | 271 |
nsw_caselaw:549ff7443004262463c68ec8:272 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 376 The seriousness of the contraventions calls for the imposition of a significant penalty with respect to each contravention. I attribute a penalty of $35,000 to each of the contraventions in declarations 2 and 3. For each of the contraventions in declaration 1 and declarations 4 – 7, I attribute a penalty of $40,000. For the contravention in declaration 8, for the same reasons expressed with respect to disqualification, I attribute a penalty of $40,000. And for the contraventions in declarations 9 – 11, I attribute a penalty of $50,000. In total this amounts to $460,000, which I discount to $350,000.
377 I will make an order that Mr Macdonald pay to the Commonwealth of Australia a pecuniary penalty of $350,000. | 272 |
nsw_caselaw:549ff7443004262463c68ec8:273 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 5.2 Pecuniary Penalty and Mr Shafron
378 Mr Shafron’s contraventions were his failure to warn of the too emphatic language of the Draft ASX Announcement in declaration 1, his failure to disclose the limitations upon the reviews of PwC and Access Economics in declaration 2 and his failure to consider disclosure of the DOCI Information in declaration 3.
379 The parity principle would suggest that I attribute a penalty of $35,000 to each of the contraventions in declarations 1 and 2 and that I attribute a penalty of $40,000 to the contravention in declaration 3. That leads to a total of $110,000 that I would discount to $75,000.
380 I reject ASIC’s attribution of a range of $120,000 - $130,000 to each contravention and a discounting of the result to a range of $320,000 - $450,000. To attribute a range of $120,000 to $130,000 to these contraventions is excessive. | 273 |
nsw_caselaw:549ff7443004262463c68ec8:274 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 381 It was submitted on Mr Shafron’s behalf that with respect to the contravention in declaration 3, I should impose a penalty substantially less than that imposed upon Mr Macdonald.
382 I reject that submission. As the secretary and general counsel of JHIL, he had responsibility for the company’s performance of its continuous disclosure obligations. His contravention is not of less seriousness than that of Mr Macdonald. In my view there is no basis for a discriminatory order with respect to Mr Shafron.
383 I will make an order that Mr Shafron pay to the Commonwealth of Australia a pecuniary penalty of $75,000.
5.3 Pecuniary Penalty and Mr Morley
384 Mr Morley has one contravention against him: his failure to disclose the limitations in the PwC and Access Economics reviews.
385 Applying the parity principle, I would order Mr Morley to pay a pecuniary penalty of $35,000. Since he has only one contravention, the totality principle does not apply. | 274 |
nsw_caselaw:549ff7443004262463c68ec8:275 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 386 ASIC applied a range of $120,000 - $130,000 to two contraventions. I reduced the contraventions to one to avoid duplication and have already indicated that the range applied by ASIC is excessive.
387 I will order Mr Morley to pay to the Commonwealth of Australia a pecuniary penalty of $35,000. | 275 |
nsw_caselaw:549ff7443004262463c68ec8:276 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 5.4 Pecuniary Penalty and Mr Brown, Mr Gillfillan, Ms Hellicar, Mr Koffel, Mr O’Brien, Mr Terry and Mr Willcox
388 Mr Brown, Ms Hellicar, Mr O’Brien, Mr Terry and Mr Willcox were guilty of one contravention with respect to their approval of the Draft ASX Announcement. Mr Gillfillan and Mr Koffel were guilty of one contravention with respect to their failure to call for a copy of the Draft ASX Announcement. I have treated these contraventions equally.
389 In determining a period of disqualification for the non-executive directors I took the period of 7 years that I attributed to Mr Macdonald for his contravention in approving the Draft ASX Announcement and discounted it to 5 years as the appropriate disqualification period for the non-executive directors. | 276 |
nsw_caselaw:549ff7443004262463c68ec8:277 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 390 I adopt a similar course with respect to pecuniary penalty. I have attributed a penalty of $40,000 to Mr Macdonald’s breach that, together with the amounts attributed to other contraventions, was discounted. I discount the $40,000 to $30,000 in the case of each of the non-executive directors.
391 I will order that each of Mr Brown, Mr Gillfillan, Ms Hellicar, Mr Koffel, Mr O’Brien, Mr Terry and Mr Willcox pay to the Commonwealth of Australia a pecuniary penalty of $30,000. | 277 |
nsw_caselaw:549ff7443004262463c68ec8:278 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 5.5 Pecuniary Penalty and JHINV
392 JHINV’s contraventions in declarations 1 and 2 related to the falsity in the ASX Slides. The contravention in declaration 3 was for its failure to disclose the ABN 60 Information.
393 The former two contraventions were of Section 1041H(1) and Section 1041E(1). They are not civil penalty provisions and no question of a pecuniary penalty arises with respect to those breaches.
394 A “financial services civil penalty provision” is excluded from the definition of a corporation/scheme civil penalty provision in s 1317DA of Corporations Act. That term is defined in that provision to include Section 674(2), the continuous disclosure provision. Section 1317G(1A) applies to a contravention of Section 674(2). It was in the following terms on 25 March 2003:
“A Court may order a person to pay the Commonwealth a pecuniary penalty of up to $200,000 if: | 278 |
nsw_caselaw:549ff7443004262463c68ec8:279 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | (a) a declaration of contravention by the person has been made under section 1317E; and
(b) the contravention is of a financial services civil penalty provision; and
(c) the contravention:
(i) materially prejudices the interests of acquirers or disposers of the relevant financial products; or
(ii) materially prejudices the issuer of the relevant financial products or, if the issuer is a corporation or scheme, the members of that corporation or scheme; or
(iii) is serious.”
395 French J set out a series of factors to be taken into account in imposing penalty in respect of a failure in the continuous disclosure obligation in Chemeq 234 ALR at 534 [99]:
“From the preceding discussion I extract the following factors relevant to the level of penalty for contravention of the continuous disclosure provisions. The list is non-exhaustive: | 279 |
nsw_caselaw:549ff7443004262463c68ec8:280 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | (1) The extent to which the information not disclosed would have been expected to and (if applicable) did affect the price of the contravening company’s shares: s 674(2)(c).
(2) The extent to which the information, if not generally available, would have been discoverable upon inquiry by a third party: s 676(2).
(3) The extent (if any) to which acquirers or disposers of the company’s shares were materially prejudiced by the non-disclosure: s 1317G(1A).
(4) The extent to which (if at all) the contravention was the result of deliberate or reckless conduct by the corporation.
(5) The extent to which the contravention was the result of negligent conduct by the corporation.
(6) The period of time over which the contravention occurred. | 280 |
nsw_caselaw:549ff7443004262463c68ec8:281 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | (7) The existence, within the corporation, of compliance systems in relation to its disclosure obligations including provisions for and evidence of education and internal enforcement of such systems.
(8) Remedial and disciplinary steps taken after the contravention and directed to putting in place a compliance system or improving existing systems and disciplining officers responsible for the contravention.
(9) The seniority of officers responsible for the non-disclosure and whether they included directors of the company.
(10) Whether the directors of the corporation were aware of the facts which ought to have been disclosed and, if not, what processes were in place at the time, or put in place after the contravention to ensure their awareness of such facts in the future.
(11) Any change in the composition of the board or senior managers since the contravention. | 281 |
nsw_caselaw:549ff7443004262463c68ec8:282 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | (12) The degree of the corporation’s cooperation with the regulator including any admission of contravention.
(13) The prevalence of the particular class of non-disclosure in the wider corporate community.”
396 The significance of JHINV’s failure to disclose the ABN 60 Information has been discussed earlier in these reasons for judgment.
397 In terms of the first factor identified by French J (expected affect on price), I found that as a matter of hypothesis in the circumstance of a market rationally or irrationally devaluing JHINV shares because of a perceived connection through JHIL with a liability for asbestos claims, a reasonable person was likely to have regarded knowledge that JHIL was to be separated from the James Hardie group as being important and as having a material effect on the price or value of JHINV shares.
398 It was submitted that I did not address extent of that effect. That is so. I held the asbestos discount to be unquantifiable. | 282 |
nsw_caselaw:549ff7443004262463c68ec8:283 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 399 This is not a case in which actual price affectation is applicable. Because the information was not disclosed there was no effect of it on the price or value of JHINV shares. | 283 |
nsw_caselaw:549ff7443004262463c68ec8:284 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 400 With regard to the second factor (discoverability by inquiry), in March 2003, JHIL was a private company. ASIC maintained a register of private company filings. It charged a prescribed fee for persons to access documents it maintained through electronic means or at its Business Centre. Upon payment of the fee, any person could inspect and copy or electronically extract any document filed with ASIC. I found that information on an ASIC register that might, on payment of a fee, be searched and might reveal relevant information if the searcher was sufficiently astute to consider name changes and conducted a search for the ABN of JHIL, was not readily observable matter. I found that a member of the investing public should not be required to pay a fee for the privilege of conducting a search of the filings by private companies held by ASIC. Further, the filings did not reveal the execution of the DOCIA nor its covenant and indemnity. | 284 |
nsw_caselaw:549ff7443004262463c68ec8:285 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 401 With respect to the third factor (material prejudice) there was a partial disclosure of the ABN 60 Information on 15 May 2003 and it was submitted that JHINV’s share price movement on that day favoured a finding that if the transfer of JHIL had been disclosed it was not material. The opening and closing range was only $0.20 with a high of $6.61 and a low $6.35 with an average trading price of $6.467. The volume of trades, however, was the highest it had been in a month. But the question is not an ex post facto one, whether the market did react to the later disclosure of some of the information. The question is whether a reasonable person would expect the information to have a material effect on the market price. | 285 |
nsw_caselaw:549ff7443004262463c68ec8:286 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 402 With regard to the fourth factor (deliberate or reckless conduct), JHINV took a deliberate decision not to disclose the information. In arriving at that decision it did not address the correct question. Nor did it address the matter Allens identified it should. JHINV’s conduct was grossly negligent and if not reckless, it bordered on it.
403 It follows that as to the fifth factor (the extent to which the decision was negligent), that the contravention was the result of negligent conduct on the part of JHINV.
404 As to the sixth element (length of contravention) there was a failure to disclose all of the ABN 60 Information between 25 March 2003 and 30 June 2003. | 286 |
nsw_caselaw:549ff7443004262463c68ec8:287 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 405 Apart from the existence of a continuous disclosure and marketing communication policy, the seventh factor (compliance systems), was not addressed in evidence. It was submitted that the fact that consideration was given to whether the ABN 60 Information should be disclosed and the advice of Allens was taken, meant that a system existed. All that appears is that consideration was given to the question of disclosure.
406 There was no evidence that any remedial or disciplinary steps referred to in factor eight were taken.
407 As to the ninth factor (seniority of responsible officers), the senior executives and the board of directors of JHINV were involved in the decision not to disclose.
408 As to the tenth item (directors’ knowledge), the directors of JHINV were aware of the facts that ought to have been disclosed and of the advices of Allens on the question. | 287 |
nsw_caselaw:549ff7443004262463c68ec8:288 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 409 As to the eleventh item (change in composition of board and management), Mr Macdonald, Mr Shafron, Mr Morley and Mr Baxter are no longer employees of JHINV and neither Mr McGregor nor Mr Brown nor Ms Hellicar are directors of JHINV.
410 As to item twelve (cooperation with ASIC), it has submitted with respect to most of the defendants that there was a lack of cooperation with it. I do not give great weight to that submission. In civil penalty proceedings defendants are entitled to put ASIC to proof of its allegations.
411 Finally, as to factor thirteen (prevalence of the non-disclosure), the non-disclosure in question was probably unique and, in any event, not of a class of information generally subject to the continuous disclosure obligation.
412 JHINV’s continuous disclosure and marketing communication policy, updated to February 2008, was in evidence. | 288 |
nsw_caselaw:549ff7443004262463c68ec8:289 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 413 Judged by the above factors and for the reasons expressed earlier in these reasons for judgment, JHINV’s contravention of its continuous disclosure obligation was so serious as to require a significant pecuniary penalty. But not of the order of $200,000 submitted by ASIC.
414 I attributed a pecuniary penalty of $40,000 to Mr Macdonald and to Mr Shafron for failing to consider whether the DOCI Information should be disclosed. The contravention by JHINV was more serious than that as it involved a deliberate decision not to disclose in the face of Allens’ original advice and its non-compliance with Allens’ subsequent advice.
415 I will make an order that JHINV pay to the Commonwealth of Australia a pecuniary penalty of $80,000. | 289 |
nsw_caselaw:549ff7443004262463c68ec8:290 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 6 Costs
416 A number of parties asked that I defer the question of costs until after I publish these reasons when additional evidence and argument could be presented. Because of the views I hold about costs I decline to take that course.
417 ASIC seeks an order that the defendants, with the exception of ABN 60, jointly pay 90% of its costs.
418 From my summary in Macdonald (No 11) from [1269], 57 alleged contraventions of the law are identified. ASIC succeeded with respect to 32 of them. That is a rate of 56%.
419 ASIC produced a table that identified 41 alleged contraventions of which 25 were successful giving a result of just under 61%.
420 On either view, these results suggest that ASIC’s submission that its costs be discounted by but 10% should be rejected. Its failure rate with respect to the alleged contraventions suggests a higher discount. | 290 |
nsw_caselaw:549ff7443004262463c68ec8:291 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 421 Subject to rules of court, costs are in the discretion of the Court under the Civil Procedure Act 2005, s 98. The Uniform Civil Procedure Rules Pt 42 r 42.1 provides that if the Court makes any order as to costs the Court is to order that costs follow the event unless it appears to the Court that some other order should be made.
422 Toohey J in Hughes v Western Australian Cricket Association Inc (1986) 8 ATPR 40-748 at 48-136 said:
“1 Ordinarily, costs follow the event and a successful litigant receives his costs in the absence of special circumstances justifying some other order. Ritter v Godfrey (1920) 2 KB 47.
2 Where a litigant has succeeded only upon a portion of his claim, the circumstances may make it reasonable that he bear the expense of litigating that portion upon which he has failed. Forster v Farquhar (1893) 1 QB 564. | 291 |
nsw_caselaw:549ff7443004262463c68ec8:292 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 3 A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other party’s costs of them. In this sense, “issue” does not mean a precise issue in the technical pleading sense but any disputed question of fact or law. Cretazzo v Lombardi (1975) 15 S.A.S.R. 4 at p. 12.”
423 In Waters v PC Henderson (Australia) Pty Ltd [1994] NSWCA 338; (1994) 254 ALR 328, Mahoney JA approved a passage from Ritchie’s Supreme Court Procedure NSW: | 292 |
nsw_caselaw:549ff7443004262463c68ec8:293 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | “Where the proceedings involve multiple issues the application of the rule that costs follow the event may involve hardship where a party succeeds on some issues and yet fails on others. Particularly is this so where, for example, a defendant succeeds on issues that occupied the bulk of the time taken by the proceedings. Nevertheless unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed.” | 293 |
nsw_caselaw:549ff7443004262463c68ec8:294 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | See also: James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [31] - [36].
424 In Macdonald (No 11) I identified 10 issues: the Draft ASX Announcement, the DOCI Disclosure, the DOCI Execution, the Final ASX Announcement, the Press Conference Statements, the 23 February 2001 ASX Announcement, the 21 March 2001 ASX Announcement, the Scheme of Arrangement, the Roadshow Presentations and the cancellation of the partly paid shares.
425 ASIC produced a table in which it identified 13 issues. It divided the DOCI Disclosure issue into Failure to advise on Disclosure and Failure to Disclose. It divided the Scheme of Arrangement issue into Scheme of Arrangement - Final IM and Draft IM, Draft Court Letter and Final Court Letter and it divided the Roadshow Presentations into the Edinburgh Representations and the London Representations on the one hand and ASX Slides on the other. | 294 |
nsw_caselaw:549ff7443004262463c68ec8:295 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 426 In either event, it seems to me that there were in the proceedings issues or groups of issues that were separable or discrete. They related to different fact situations and differing participants. The defendants against whom the issues were raised were not uniform across the issues.
427 ASIC’s table of issues showed that many witnesses gave evidence on more than one issue. It was submitted that it was impractical to divide the evidence between issues.
428 For example, ASIC alleged that Mr Macdonald was in breach of Section 181(1) in making the Press Conference Statements, the 23 February 2001 ASX Announcement and the 21 March 2001 ASX Announcement.
429 ASIC also alleged that Mr Macdonald was in breach of s 181(1) of the Corporations Act in June 2002 when he made the statements in the Edinburgh Representations and the London Representations and approved the release of the ASX Slides. The provision was then in identical terms to Section 181(1). | 295 |
nsw_caselaw:549ff7443004262463c68ec8:296 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 430 I found that ASIC had failed to make out any of those charges. ASIC submits, however, that they should not be differentiated from the charges under Section 180(1) because the same evidence was tendered with respect to both sets of charges.
431 A similar submission was made with respect to JHIL and the 21 March 2001 ASX Announcement. I found that ASIC had made out its claim that by issuing the 21 March 2001 ASX Announcement, JHIL contravened Section 995(2). But I found that ASIC had failed to establish that it had also breached Section 999. ASIC submitted that the same evidence was tendered with respect to both alleged contraventions.
432 ASIC failed to establish that Mr Morley was in breach of Section 180(1) when he executed the DOCI. ASIC concedes that this was a distinct issue but apart from William Koeck and Jeremy Kriewaldt who gave evidence solely on this issue, the remainder of the witnesses whose evidence went to this issue also gave evidence in support of other aspects of the proceedings. | 296 |
nsw_caselaw:549ff7443004262463c68ec8:297 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 433 ASIC alleged that the Draft IM to be sent to members of JHIL as part of the members’ scheme of arrangement containing a statement to the effect that the partly paid shares enabled JHIL to call upon JHINV to pay if it was required to meet any liabilities of JHIL was false or misleading. ASIC also claimed that the Draft Court Letter containing the statement to the effect that JHIL would have, through existing reserves and access to funding in the form of the partly paid shares, the means to meet liabilities that it might incur in the future whether in relation to asbestos claims or otherwise, was false or misleading. The Final Court Letter contained a statement with respect to the partly paid shares to similar effect. ASIC alleged it was false or misleading. The Final IM containing the same statements with respect to the partly paid shares was dispatched to the shareholders of JHIL. With respect to all these documents ASIC failed to establish any contravention. | 297 |
nsw_caselaw:549ff7443004262463c68ec8:298 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 434 While accepting that these allegations constituted a distinct issue, with the exception of the evidence of Mr Hutley SC and the affidavit of Ms Laidler, ASIC submitted that the remainder of the witnesses relied upon to support these allegations were also relied upon to support aspects of the case in which ASIC was successful.
435 ASIC failed to establish a breach of Section 1041E(1) with respect to the Edinburgh Representations and the London Representations by JHINV or a breach by Mr Macdonald of Section 181(1). ASIC submitted, however, that the evidence was substantially the same as the evidence relied upon successfully in support of findings that JHINV was in breach of Section 1041E(1) with respect to the ASX Slides and Mr Macdonald’s breach of Section 180(1) with respect to the Edinburgh Representations and the London Representations. | 298 |
nsw_caselaw:549ff7443004262463c68ec8:299 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 436 ASIC submitted that the costs payable by the defendants should be determined as a percentage of the whole of the plaintiff’s costs rather than determining that the defendants pay costs of certain issues. Reliance was placed upon Alamdo Holdings Pty Ltd v Australian Window Furnishings (NSW) Pty Ltd [2008] NSWSC 7 at [36]:
“The approach favoured by Alamdo, if its principal contention is not accepted, is that it should have a fixed percentage of its costs rather than some mathematically calculated portion – in other words, that it should simply be deprived of a portion of its costs on the basis of a general assessment of respective degrees of success. Such an approach is consistent with that taken in a number of cases where issue-by-issue treatment has been considered impracticable or inappropriate. I need only mention, by way of example, the decision of the Court of Appeal in South Sydney Council v Royal Botanic Gardens and Domain Trust (No 2) [2000] NSWCA 242.” | 299 |
nsw_caselaw:549ff7443004262463c68ec8:300 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 437 That was a case for the costs of repair and remedial work and a loss of rent in a damages claim for breach of covenants contained in a lease of industrial premises. It was not a case in which discrete issues were identified.
438 I am told I should assume that the amount of costs in question are tens of millions of dollars. I am told that taxation of costs is likely to be protracted and expensive. ASIC foreshadows reliance upon the Civil Procedure Act, s 98(4). It provides, amongst other things, that at time before costs are referred for assessment, the court may make an order to the effect that the party to whom costs are to be paid is to be entitled to a specified gross sum instead of assessed costs. | 300 |
nsw_caselaw:549ff7443004262463c68ec8:301 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 439 In a multi-party multi-issue proceeding such as this case, there is a problem about a costs order against defendants jointly. As already mentioned, some of the issues will not apply to some of the parties. For example, Mr Brown, Mr Gillfillan, Ms Hellicar, Mr Koffel, Mr O’Brien, Mr Terry and Mr Willcox were not charged with contraventions with respect to the DOCI Disclosure, the DOCI Execution, the Final ASX Announcement, the Press Conference Statements, the 23 February 2001 ASX Announcement, the 21 March 2001 ASX Announcement, the Roadshow Presentations or the cancellation of the partly paid shares. And Mr O’Brien and Mr Terry were not charged with contraventions in relation to the Scheme of Arrangement. | 301 |
nsw_caselaw:549ff7443004262463c68ec8:302 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 440 The allegations against Mr Morley were confined to his failure to advise the 15 February 2001 Meeting of the limited nature of the reviews of the Cashflow Model by PwC and Access Economics, the allegation that he failed to advise the meeting that the best estimate in two Trowbridge reports was too uncertain to be used as a basis to assess the adequacy of Coy and Jsekarb’s funding which ASIC failed to establish and Mr Morley’s alleged failure to obtain legal advice concerning the Put Option before executing the DOCI in which ASIC again failed.
441 Another deficiency in an order that defendants jointly pay costs is the unfairness of the liberty ASIC would have to proceed against any defendant. As Austin J observed in Vines 58 ACSR at 367 [268]: | 302 |
nsw_caselaw:549ff7443004262463c68ec8:303 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | “… First, I agree with the submissions made on behalf of the defendants that the costs order should be expressed severally. It would be unfair to the defendants to put ASIC in the position of being able to recover the whole of its costs against one of the defendants, when the hearing related to separate allegations of contravention by each defendant...”
442 The solution to this problem is going to rely very much on impression. Mathematical accuracy is impossible.
443 In my view, there were two major subjects of evidence in the proceedings and other lesser issues. One subject was constituted by a group of discrete issues, the other by one discrete issue, or a group of two discrete issues if ASIC’s identification of issues is preferred. | 303 |
nsw_caselaw:549ff7443004262463c68ec8:304 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 444 On the one hand we had the evidence in relation to the Draft ASX Announcement and the announcements that followed it in the Final ASX Announcement, the Press Conference Statements, the 23 February 2001 ASX Announcement and the 21 March 2001 ASX Announcement.
445 By and large the same witnesses gave evidence in relation to each of those discrete issues. According to ASIC’s table there were 28 witnesses who addressed the Draft ASX Announcement, 28 who addressed the Final ASX Announcement, 29 who addressed the Press Conference Statements, 26 who addressed the 23 February 2001 ASX Announcement and 25 who addressed the 21 March 2001 ASX Announcement. There was a core of 24 witnesses who addressed each of those issues.
446 The evidence was concentrated on the Draft ASX Announcement with far less attention given to the other announcements. | 304 |
nsw_caselaw:549ff7443004262463c68ec8:305 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 447 With the exception of the allegations that Mr Macdonald, Mr Shafron and Mr Morley failed to advise the 15 February 2001 Meeting that the Trowbridge reports were too uncertain to be used to assess funding for Coy and Jsekarb ASIC was successful in its charges relating to the Draft ASX Announcement.
448 With the exception of its charges against Mr Macdonald under Section 181(1) and its charge against JHIL under Section 999 with respect to the 21 March 2001 ASX Announcement, ASIC was successful in its charges with respect to the other announcements. | 305 |
nsw_caselaw:549ff7443004262463c68ec8:306 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 449 The other large subject was the Scheme of Arrangement. It was addressed by 13 witnesses. But it was largely a documentary case with extensive cross-examination covering the period from 1998 to 2003 of those non-executive directors who gave evidence in a failed attempt to establish that the management of JHIL had proposed to the board that after the completion of the restructure through the members’ scheme of arrangement, the Put Option would be exercised, the partly paid shares would be cancelled, the shares would be transferred to another trust, or JHIL would be liquidated, and the board either endorsed those proposals and intended that the steps be taken or had assumed that they would occur.
450 It is my impression that the evidence on each of these subjects was about equal. | 306 |
nsw_caselaw:549ff7443004262463c68ec8:307 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 451 In an alternative submission on costs, ASIC submitted that costs should be apportioned to 9 issues: Market announcement 15 February 2001, Market announcements 16 February 2001, Market announcements 23 February and 21 March 2001, DOCI – disclosure, DOCI – execution, Information memorandum for the 2001 scheme, Presentations to institutional investors: Macdonald – JHINV: Edinburgh, London and ASX, Cancellation of partly paid shares.
452 ASIC submitted that the costs of the market announcements were 51% of total costs with the costs of the 15 February 2001 announcement at 40%. On the other hand it estimated the costs of the information memorandum at only 12.5% of total costs.
453 The exercise upon which I am engaged cannot be determined with arithmetic precision. I doubt that if I had stood the question of costs over for further evidence and argument I would have been in any better position that I am now. Cross-examination would no doubt have challenged the method by which ASIC’s estimations were made. | 307 |
nsw_caselaw:549ff7443004262463c68ec8:308 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 454 There was much more to the Scheme of Arrangement issue than the Draft IM or the Final IM. As I have said it involved extensive cross-examination of those non-executive directors who gave evidence of their intentions with respect to the partly paid shares.
455 I reject ASIC’s estimation with respect to the Scheme of Arrangement issue and maintain my view that the costs of it were basically equal to the costs of the Draft ASX Announcement issue and the announcements that followed it.
456 In Australian Securities and Investments Commission v Whitlam (No 2) [2002] NSWSC 718; (2002) 42 ACSR 515 at 523 [29] I made no order as to costs in similar circumstances: | 308 |
nsw_caselaw:549ff7443004262463c68ec8:309 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | “In the substantive proceedings, the plaintiff was substantially successful with respect to the matters the subject of my first declaration and, notwithstanding the making of my second declaration, the defendant was substantially successful with respect to it because of the relief granted. The normal rule would be that the plaintiff is entitled to the costs associated with the first declaration and the defendant is entitled to the costs associated with the second declaration. Considerations of the time taken with respect to separate issues might be used to determine the outcome. In the circumstance, however, I consider it appropriate that each party bear its own costs.” | 309 |
nsw_caselaw:549ff7443004262463c68ec8:310 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 457 It was submitted that I should take the same course in this case. That seems to me to be the appropriate order I should make in this case with respect to the two major subjects. It gives effect to success and failure and the basic equality of cost between the subjects. And it avoids the problems of taxation of costs with respect to each subject. It does not give rise to any liability for costs of a defendant against whom those issues were not raised and it recognises that with respect to the non-executive directors other than Mr O’Brien and Mr Terry ASIC raised a Scheme of Arrangement issue and the Draft ASX Announcement issue against each of them.
458 It is not a perfect solution because no charges were laid against the non-executive directors with respect to the announcements that followed the Draft ASX Announcement. But, as I have said, far less attention was directed to them in evidence. | 310 |
nsw_caselaw:549ff7443004262463c68ec8:311 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 459 I will make no order as to costs of the group of issues comprising the allegations with respect to the Draft ASX Announcement, the Final ASX Announcement, the Press Conference Statements, the 23 February 2001 ASX Announcement and the 21 March 2001 ASX Announcement.
460 I will make no order as to costs of the Scheme of Arrangement issue.
461 With respect to the DOCI Execution issue, Mr Morley having succeeded on it but failed on the Draft ASX Announcement issue sought an order that ASIC pay him 80% of his costs.
462 Since the DOCI Execution issue involved far less evidence than the Draft ASX Announcement issue and my order with respect to it has relieved Mr Morley from paying substantial costs, I will follow the same approach and make no order to costs of the DOCI Execution issue such that Mr Morley and ASIC will bear their own costs of that issue. | 311 |
nsw_caselaw:549ff7443004262463c68ec8:312 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 463 ASIC succeeded in its claims against JHIL, Mr Macdonald and Mr Shafron with respect to the DOCI Disclosure issue. ASIC seeks no order for costs against JHIL. In my view, ASIC should bear those costs and not have them passed on to Mr Macdonald and Mr Shafron.
464 I will order that Mr Macdonald pay one third of ASIC’s costs of the DOCI Disclosure issue and that Mr Shafron pay one third of those costs.
465 ASIC succeeded in its claim with respect to the cancellation of partly paid shares issue that JHINV failed to notify the ASX of the ABN 60 Information. I see no reason why costs should not follow the event with respect to that issue and I will order JHINV to pay ASIC’s costs of the cancellation of partly paid shares issue. | 312 |
nsw_caselaw:549ff7443004262463c68ec8:313 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 466 With respect to the Roadshow Presentations issue ASIC was successful with respect to the part of its charges that JHINV was in breach of Section 1041E(1) and Section 1041H(1) with respect to the ASX Slides. But it failed in its charge that JHINV breached Section 1014E(1) with respect to the Edinburgh Representations and the London Representations.
467 Since both ASIC and JHINV were partially successful with respect to this issue I will order JHINV to pay 50% of ASIC’s costs of the Roadshow Presentations issue. | 313 |
nsw_caselaw:549ff7443004262463c68ec8:314 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 7 Conclusion
468 In Australian Securities and Investments Commission v Macdonald (No 11) [2009] NSWSC 287; (2009) 256 ALR 199, I found that each of the defendants had contravened provisions of the Corporations Act 2001 (Cth) or provisions of the Corporations Law (Cth) as carried over into the Corporations Act.
469 With the exception of the first defendant, Peter Donald Macdonald, and the eleventh defendant, ABN 60 Pty Ltd, formerly called James Hardie Industries Ltd, all the other defendants sought to be excused from their contraventions under s 1317S(2) or s 1318(1) of the Corporations Act.
470 I have refused to exonerate any of those defendants.
471 I will make declarations of the contraventions of all defendants in the following terms.
472 With respect to Peter Donald Macdonald I will make declarations in these terms:
The Court declares that: | 314 |
nsw_caselaw:549ff7443004262463c68ec8:315 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 1. The First Defendant contravened s 180(1) of the Corporations Law as carried over into the Corporations Act 2001 (Cth) ( Section 180(1) ) in relation to ABN 60 Pty Ltd (formerly known as James Hardie Industries Ltd) ( JHIL ) by his conduct, as a director and Chief Executive Officer of that corporation, in voting on 15 February 2001 in favour of a resolution of the directors to approve a draft ASX announcement ( Draft ASX Announcement ) and authorise its execution and sending to the Australian Stock Exchange ( ASX ) in circumstances where:
(a) he knew that the Draft ASX Announcement conveyed or was capable of conveying that: | 315 |
nsw_caselaw:549ff7443004262463c68ec8:316 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | (i) the material available to JHIL provided a reasonable basis for the assertion in the announcement that it was certain that the amount of funds made available to the Medical Research and Compensation Foundation ( Foundation ) would be sufficient to meet all legitimate present and future asbestos claims brought against two of JHIL’s former subsidiaries, Amaca Pty Ltd ( Amaca ) and Amaba Pty Ltd ( Amaba );
(ii) he believed that it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba;
(iii) all of the directors or at least the majority of them believed that it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba; | 316 |
nsw_caselaw:549ff7443004262463c68ec8:317 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | (iv) JHIL had received expert advice from PricewaterhouseCoopers ( PwC ) and Access Economics that supported the statement that it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba;
(b) he knew or ought to have known that the Draft ASX Announcement was misleading in those respects. | 317 |
nsw_caselaw:549ff7443004262463c68ec8:318 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 2. The First Defendant contravened Section 180(1) in relation to JHIL by his conduct, as a director and Chief Executive Officer of that corporation on or about 15 February 2001 when its board of directors voted in favour of a resolution to approve the Draft ASX Announcement and authorise its execution and sending to the ASX, in failing to advise the board that:
(a) the Draft ASX Announcement was expressed in too emphatic terms concerning the adequacy of the funding made available to meet all legitimate present and future asbestos claims against Amaca and Amaba; and
(b) in that respect the Draft ASX Announcement was misleading. | 318 |
nsw_caselaw:549ff7443004262463c68ec8:319 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 3. The First Defendant contravened Section 180(1) in relation to JHIL by his conduct, as a director and Chief Executive Officer of that corporation, on or about 15 February 2001 in failing to advise its board of directors that the reviews of a cashflow model ( Cashflow Model ) of the funding being made available to meet asbestos claims brought against Amaca and Amaba that had been undertaken by PwC and Access Economics:
(a) were limited to reporting on the logical soundness and technical correctness of the Cashflow Model;
(b) had not verified, and PwC and Access Economics had been specifically instructed not to consider, the key assumptions adopted by the Cashflow Model, being:
(i) fixed investment earnings rates;
(ii) litigation and management costs; and
(iii) future claim costs. | 319 |
nsw_caselaw:549ff7443004262463c68ec8:320 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 4. The First Defendant contravened Section 180(1) in relation to JHIL by his conduct, as a director and Chief Executive Officer of that corporation, in either approving for release to the ASX an announcement ( Final ASX Announcement ), failing to advise that it not be released, or failing to advise that it be amended before being released to remove the respects in which it was misleading in circumstances where:
(a) he knew that the Final ASX Announcement conveyed or was capable of conveying that:
(i) the material available to JHIL provided a reasonable basis for the assertion in the announcement that it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba; | 320 |
nsw_caselaw:549ff7443004262463c68ec8:321 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | (ii) Mr Macdonald believed that it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba;
(iii) all of the directors or at least a majority of them believed that it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba;
(iv) JHIL had received expert advice from PwC and Access Economics that supported the statement that it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba;
(b) he knew or ought to have known that the Final ASX Announcement was misleading in those respects. | 321 |
nsw_caselaw:549ff7443004262463c68ec8:322 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 5. The First Defendant contravened Section 180(1) in relation to JHIL by his conduct, as a director and Chief Executive Officer of that corporation, on or about 16 February 2001 at a press conference during which he made statements which conveyed that:
(a) it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba;
(b) the material available to JHIL provided a reasonable basis for the assertion that it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba;
(c) he believed that it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba; | 322 |
nsw_caselaw:549ff7443004262463c68ec8:323 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | (d) JHIL had received expert advice from PwC and Access Economics that supported the statement that it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba; and
(e) JHIL did not have any potential claims on the assets of Amaca and Amaba,
in circumstances where he knew or ought to have known that those statements were false and misleading in those respects. | 323 |
nsw_caselaw:549ff7443004262463c68ec8:324 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 6. The first defendant contravened Section 180(1) in relation to JHIL by his conduct, as a director and Chief Executive Officer of that corporation, on or about 23 February 2001 in either approving for release to the ASX an announcement bearing that date ( 23 February 2001 ASX Announcement ), or failing to advise that it not be released, or failing to advise that it be amended before being released to remove the respects in which it was misleading in circumstances where:
(a) he knew that the 23 February 2001 ASX Announcement conveyed or was capable of conveying that:
(i) it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present or future asbestos claims brought against Amaca and Amaba; | 324 |
nsw_caselaw:549ff7443004262463c68ec8:325 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | (ii) the material available to JHIL provided a reasonable basis for the assertion in the announcement that it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba;
(iii) he believed that it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba;
(b) he knew or ought to have known that the 23 February 2001 ASX Announcement was misleading in those respects. | 325 |
nsw_caselaw:549ff7443004262463c68ec8:326 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 7. The First Defendant contravened Section 180(1) in relation to JHIL by his conduct, as a director and Chief Executive Officer of that corporation, on or about 21 March 2001 in either approving for release to the ASX an announcement bearing that date ( 21 March 2001 ASX Announcement ), or failing to advise that it not be released, or failing to advise that it be amended before being released to remove the respects in which it was misleading in circumstances where:
(a) he knew that the 21 March 2001 ASX Announcement conveyed or was capable of conveying that:
(i) it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba; | 326 |
nsw_caselaw:549ff7443004262463c68ec8:327 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | (ii) the material available to JHIL provided a reasonable basis for the assertion in the announcement that it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba;
(b) he knew or ought to have known that the 21 March 2001 ASX Announcement was misleading in those respects. | 327 |
nsw_caselaw:549ff7443004262463c68ec8:328 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 8. The First Defendant contravened Section 180(1) in relation to JHIL by his conduct, as a director and Chief Executive Officer of that corporation, on and from 15 February 2001 in failing to:
(a) advise the Chairman or the board of JHIL as to whether or not the following information ( DOCI Information ) was required to be disclosed to the ASX namely that JHIL had entered into a deed of covenant and indemnity with Amaca and Amaba pursuant to which:
(i) Amaca and Amaba provided certain covenants and indemnities to JHIL in respect of its potential asbestos liabilities;
(ii) JHIL agreed to pay certain amounts in exchange for those covenants and indemnities;
(iii) Amaca agreed that it would acquire all the shares in JHIL if it was put to it by a sole registered shareholder of the entirety of JHIL shares; | 328 |
nsw_caselaw:549ff7443004262463c68ec8:329 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | (b) seek and consider advice and satisfy himself in relation to whether JHIL was required to disclose the DOCI Information to the ASX;
(c) resolve or determine that JHIL would disclose the DOCI Information to the ASX; and
(d) raise with or propose to the Chairman or the board of JHIL that they needed to consider and determine whether or not to disclose the DOCI Information to the ASX;
in circumstances where Mr Macdonald knew or ought to have known that:
(e) if JHIL failed to disclose the DOCI Information to the ASX it risked contravening s 1001A(2) of the Corporations Law as carried over into the Corporations Act ; and
(f) if the DOCI Information was not disclosed to the ASX and JHIL had an obligation under the ASX Listing Rules to do so and that failure was revealed, it would be harmful to JHIL’s interests and harm market perceptions of JHIL. | 329 |
nsw_caselaw:549ff7443004262463c68ec8:330 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 9. The First Defendant contravened Section 180(1) in relation to James Hardie Industries NV ( JHINV ) by his conduct, as a director and Chief Executive Officer of that corporation, on or about 10 June 2002 in either approving for release to the ASX a set of slides ( ASX Slides ), or failing to advise that they not be released in circumstances where:
(a) he knew that the ASX Slides conveyed or were capable of conveying that:
(i) it was certain or highly likely that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba;
(ii) the material available to JHINV provided a reasonable basis for the assertion that it was certain or highly likely that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba; | 330 |
nsw_caselaw:549ff7443004262463c68ec8:331 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | (b) he knew that the ASX Slides were misleading in those respects. | 331 |
nsw_caselaw:549ff7443004262463c68ec8:332 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 10. The First Defendant contravened Section 180(1) in relation to JHINV by his conduct, as a director and Chief Executive Officer of that corporation, in making a presentation in Edinburgh on or about 10 June 2002 during which he made statements which conveyed that:
(a) it was certain or highly likely that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba;
(b) the material available to JHINV provided a reasonable basis for the assertion that it was certain or highly likely that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba;
in circumstances where he knew that those statements were false or misleading in those respects. | 332 |
nsw_caselaw:549ff7443004262463c68ec8:333 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 11. The First Defendant contravened Section 180(1) in relation to JHINV by his conduct, as a director and Chief Executive Officer of that corporation, in making a presentation in London on or about 11 June 2002 during which he made statements which conveyed that:
(a) it was certain or highly likely that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba;
(b) the material available to JHINV provided a reasonable basis for the assertion that it was certain or highly likely that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba;
(c) the James Hardie Group had received legal advice that it had no remaining asbestos liabilities;
in circumstances where he knew that those statements were false or misleading in those respects. | 333 |
nsw_caselaw:549ff7443004262463c68ec8:334 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 473 With respect to Peter James Shafron I will make declarations in these terms: | 334 |
nsw_caselaw:549ff7443004262463c68ec8:335 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | The Court declares that:
1. The Second Defendant contravened s 180(1) of the Corporations Law as carried over into the Corporations Act 2001 (Cth) ( Section 180(1) ) in relation to ABN 60 Pty Ltd (formerly known as James Hardie Industries Ltd) ( JHIL ) by his conduct, as an officer of that corporation, on or about 15 February 2001 when its board of directors voted in favour of a resolution to approve a draft ASX announcement ( Draft ASX Announcement ) and authorise its execution and sending to the Australian Stock Exchange ( ASX ), in failing to advise the board that:
(a) the Draft ASX Announcement was expressed in too emphatic terms concerning the adequacy of the funding made available to meet all legitimate present and future asbestos claims brought against two of JHIL’s former subsidiaries Amaca Pty Ltd ( Amaca) and Amaba Pty Ltd ( Amaba ); and
(b) in that respect the Draft ASX Announcement was misleading. | 335 |
nsw_caselaw:549ff7443004262463c68ec8:336 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 2. The Second Defendant contravened Section 180(1) in relation to JHIL by his conduct, as an officer of that corporation, on or about 15 February 2001 in failing to advise its board of directors that reviews of a cashflow model ( Cashflow Model ) of the funding being made available to meet asbestos claims brought against Amaca and Amaba that had been undertaken by PricewaterhouseCoopers ( PwC ) and Access Economics:
(a) were limited to reporting on the logical soundness and technical correctness of the Cashflow Model;
(b) had not verified, and PwC and Access Economics had been specifically instructed not to consider, the key assumptions adopted by the Cashflow Model, being:
(i) fixed investment earnings rates;
(ii) litigation and management costs; and
(iii) future claim costs. | 336 |
nsw_caselaw:549ff7443004262463c68ec8:337 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 3. The Second Defendant contravened Section 180(1) in relation to JHIL by his conduct, as an officer of that corporation, before and at the board meeting of 15 February 2001 in failing either to:
(a) advise the Chief Executive Officer or the board of JHIL that it needed to consider whether or not JHIL was required to disclose the following information ( DOCI Information ) to the ASX, namely, that JHIL had entered into a Deed of Covenant and Indemnity pursuant to which:
(i) Amaca and Amaba provided certain covenants and indemnities to JHIL in respect to its potential asbestos liabilities;
(ii) JHIL agreed to pay certain amounts in exchange for those covenants and indemnities;
(iii) Amaca agreed that it would acquire all the shares in JHIL if it was put to it by a sole registered shareholder of the entirety of JHIL shares; or | 337 |
nsw_caselaw:549ff7443004262463c68ec8:338 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | (b) obtain advice for the Chief Executive Officer or the board, or provide his own advice to the board as to whether or not they were required to disclose the DOCI Information to the ASX; or
(c) advise the Chief Executive Officer or the board to resolve or determine that JHIL would disclose the DOCI Information to the ASX;
in circumstances where the second defendant knew or ought to have known that:
(d) if JHIL failed to disclose the DOCI Information to the ASX it risked contravening s 1001A(2) of the Corporations Law as carried over into the Corporations Act ; and
(e) if the DOCI Information was not disclosed to the ASX and JHIL had an obligation under the ASX Listing Rules to do so and that failure was revealed, it would be harmful to JHIL’s interests and harm market perceptions of JHIL. | 338 |
nsw_caselaw:549ff7443004262463c68ec8:339 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 474 With respect to Phillip Graham Morley I will make a declaration in these terms:
The Court declares that: | 339 |
nsw_caselaw:549ff7443004262463c68ec8:340 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 1. The Third Defendant contravened s 180(1) of the Corporations Law as carried over into the Corporations Act 2001 (Cth) ( Section 180(1) ) in relation to ABN 60 Pty Ltd (formerly known as James Hardie Industries Ltd) ( JHIL ) by his conduct, as an officer of that corporation, on or about 15 February 2001 in failing to advise its board of directors that reviews of a cashflow model ( Cashflow Model ) of the funding being made available to meet asbestos claims brought against two of JHIL’s former subsidiaries Amaca Pty Ltd and Amaba Pty Ltd that had been undertaken by PricewaterhouseCoopers ( PwC ) and Access Economics:
(a) were limited to reporting on the logical soundness and technical correctness of the Cashflow Model;
(b) had not verified, and PwC and Access Economics had been specifically instructed not to consider, the key assumptions adopted by the Cashflow Model, being:
(i) fixed investment earnings rates; | 340 |
nsw_caselaw:549ff7443004262463c68ec8:341 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | (ii) litigation and management costs; and
(iii) future claim costs. | 341 |
nsw_caselaw:549ff7443004262463c68ec8:342 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 475 With respect to Michael Robert Brown I will make a declaration in these terms:
The Court declares that: | 342 |
nsw_caselaw:549ff7443004262463c68ec8:343 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 1. The Fourth Defendant contravened s 180(1) of the Corporations Law as carried over into the Corporations Act 2001 (Cth) ( Section 180(1) ) in relation to ABN 60 Pty Ltd (formerly known as James Hardie Industries Ltd) ( JHIL ) by his conduct, as a director of that corporation, in voting on 15 February 2001 in favour of a resolution of the directors to approve a draft ASX announcement ( Draft ASX Announcement ) and authorise its execution and sending to the Australian Stock Exchange ( ASX ) in circumstances where:
(a) he knew that the Draft ASX Announcement conveyed or was capable of conveying that: | 343 |
nsw_caselaw:549ff7443004262463c68ec8:344 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | (i) the material available to JHIL provided a reasonable basis for the assertion in the announcement that it was certain that the amount of funds made available to the Medical Research and Compensation Foundation ( Foundation ) would be sufficient to meet all legitimate present and future asbestos claims brought against two of JHIL’s former subsidiaries Amaca Pty Ltd ( Amaca ) and Amaba Pty Ltd ( Amaba );
(ii) JHIL’s Chief Executive Officer, Mr Macdonald, believed that it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba;
(iii) all of the directors or at least a majority of them believed that it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba; | 344 |
nsw_caselaw:549ff7443004262463c68ec8:345 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | (iv) JHIL had received expert advice from PwC and Access Economics that supported the statement that it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba;
(b) he ought to have known that the Draft ASX Announcement was misleading in those respects. | 345 |
nsw_caselaw:549ff7443004262463c68ec8:346 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 476 With respect to Meredith Hellicar, Geoffrey Frederick O’Brien, Gregory James Terry and Peter John Willcox I will make a declaration in identical terms to that to be made with respect to Mr Brown.
477 With respect to Michael John Gillfillan I will make a declaration in these terms:
The Court declares that: | 346 |
nsw_caselaw:549ff7443004262463c68ec8:347 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 1. The Fifth Defendant contravened s 180(1) of the Corporations Law as carried over into the Corporations Act 2001 (Cth) ( Section 180(1) ) in relation to ABN 60 Pty Ltd (formerly known as James Hardie Industries Ltd) ( JHIL ) in that, as a director of that company, at a meeting of the board of directors of that company on 15 February 2001 during which it resolved to approve a draft ASX announcement ( Draft ASX Announcement ) and authorised its execution and sending to the Australian Stock Exchange ( ASX ) he failed to take any of the following steps:
(a) request that he be provided with a copy of the Draft ASX Announcement;
(b) familiarise himself with its terms; or
(c) abstain from voting in favour of the resolution to approve the Draft ASX Announcement and authorise its execution and sending to the ASX. | 347 |
nsw_caselaw:549ff7443004262463c68ec8:348 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 478 With respect to Martin Koffel I will make a declaration in identical terms to that to be made with respect to Mr Gillfillan.
479 With respect to JHIL I will make declarations in these terms:
The Court declares that: | 348 |
nsw_caselaw:549ff7443004262463c68ec8:349 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 1. On or about 16 Febraury 2001 ABN 60 Pty Ltd (formerly known as James Hardie Industries Ltd) ( JHIL ) contravened s 995(2) of the Corporations Law as carried over into the Corporations Act 2001 (Cth) ( Section 995(2) ) by engaging in conduct that was misleading and deceptive, or likely to mislead or deceive, in relation to a notice published in relation to securities, in that it published to the Australian Stock Exchange ( ASX ) an announcement that falsely and misleadingly represented that:
(a) it was certain that the amount of funds made available to the Medical Research and Compensation Foundation ( Foundation ) would be sufficient to meet all legitimate present and future asbestos claims brought against two of JHIL’s former subsidiaries, Amaca Pty Ltd ( Amaca ) and Amaba Pty Ltd ( Amaba ); | 349 |
nsw_caselaw:549ff7443004262463c68ec8:350 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | (b) the material available to JHIL provided a reasonable basis for the assertion in the announcement that it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba;
(c) JHIL’s Chief Executive Officer, Mr Macdonald, believed that it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba;
(d) all the directors, or at least a majority of them, believed that it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba; | 350 |
nsw_caselaw:549ff7443004262463c68ec8:351 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | (e) JHIL had received expert advice from PricewaterhouseCoopers ( PwC ) and Access Economics that supported the statement that it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba.
2. On or about 16 February 2001 JHIL contravened s 999 of the Corporations Law as carried over into the Corporations Act ( Section 999 ) by making a statement or disseminating information, namely, an announcement to the ASX that:
(a) was false in a material particular or materially misleading in that it falsely represented that:
(i) it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba; | 351 |
nsw_caselaw:549ff7443004262463c68ec8:352 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | (ii) the material available to JHIL provided a reasonable basis for the assertion in the announcement that it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba;
(iii) JHIL’s Chief Executive Officer, Mr Macdonald, believed that it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba;
(iv) all of the directors, or at least a majority of them, believed that it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba; and | 352 |
nsw_caselaw:549ff7443004262463c68ec8:353 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | (v) JHIL had received expert advice from PwC and Access Economics that supported the statement that it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba;
(b) JHIL knew or ought to have known was false in a material particular or materially misleading; and
(c) was likely to induce the sale or purchase of JHIL’s shares and have the effect of increasing or maintaining the market price of JHIL shares.
3. On or about 16 February 2001 JHIL contravened Section 995(2) in that, in connection with dealings in securities, it engaged in conduct that was misleading and deceptive, or likely to mislead or deceive, in that its Chief Executive Officer, Mr Macdonald, made statements at a press conference that falsely and misleadingly represented that: | 353 |
nsw_caselaw:549ff7443004262463c68ec8:354 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | (a) it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba;
(b) the material available to JHIL provided a reasonable basis for the assertion that it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba;
(c) Mr Macdonald believed that it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba;
(d) JHIL had received expert advice from PwC and Access Economics that supported the statement that it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba; and | 354 |
nsw_caselaw:549ff7443004262463c68ec8:355 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | (e) JHIL did not have any potential claims on the assets of Amaca and Amaba.
4. On or about 16 February 2001 JHIL contravened Section 999 by making a statement or disseminating information, namely, statements made on its behalf by its Chief Executive Officer at a press conference that:
(a) were false in a material particular or materially misleading in that they falsely represented that:
(i) it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba;
(ii) the material available to JHIL provided a reasonable basis for the assertion that it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba; | 355 |
nsw_caselaw:549ff7443004262463c68ec8:356 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | (iii) Mr Macdonald believed that it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba;
(iv) JHIL had received expert advice from PwC and Access Economics that supported the statement that it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba; and
(v) JHIL did not have any potential claims on the assets of Amaca and Amaba;
(b) JHIL knew or ought to have known were false in a material particular or materially misleading; and
(c) were likely to induce the sale or purchase of JHIL shares and have the effect of increasing or maintaining the market price of JHIL shares. | 356 |
nsw_caselaw:549ff7443004262463c68ec8:357 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 5. On or about 23 February 2001 JHIL contravened Section 995(2) by engaging in conduct that was misleading and deceptive in relation to a notice published in relation to securities, in that it published to the ASX an announcement that falsely and misleadingly represented that:
(a) it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba;
(b) the material available to JHIL provided a reasonable basis for the assertion in the announcement that it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba; and | 357 |
nsw_caselaw:549ff7443004262463c68ec8:358 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | (c) JHIL’s Chief Executive Officer, Mr Macdonald, believed that it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba.
6. On or about 23 February 2001 JHIL contravened Section 999 by making a statement or disseminating information, namely, an announcement to the ASX that:
(a) was false in a material particular or materially misleading in that it falsely and misleadingly represented that:
(i) it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba; | 358 |
nsw_caselaw:549ff7443004262463c68ec8:359 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | (ii) the material available to JHIL provided a reasonable basis for the assertion in the announcement that it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba; and
(iii) JHIL’s Chief Executive Officer, Mr Macdonald, believed that it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba;
(b) JHIL knew or ought to have known was false in a material particular or materially misleading; and
(c) was likely to have the effect of maintaining or stabilising the market price of JHIL shares. | 359 |
nsw_caselaw:549ff7443004262463c68ec8:360 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 7. On or about 21 March 2001 JHIL contravened Section 995(2) by engaging in conduct that was misleading and deceptive in relation to a notice published in relation to securities, in that it published to the ASX an announcement that falsely and misleadingly represented that:
(a) it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba; and
(b) the material available to JHIL provided a reasonable basis for the assertion in the announcement that it was certain that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba. | 360 |
nsw_caselaw:549ff7443004262463c68ec8:361 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 8. On or about 15 February 2001 JHIL contravened s 1001A(2) of the Corporations Law as carried over into the Corporations Act by its conduct as a listed disclosing entity in contravening the provisions of ASX Listing Rule 3.1 and negligently failing to notify the ASX of the following information, namely, that it had entered into a Deed of Covenant and Indemnity with Amaca and Amaba pursuant to which:
(a) Amaca and Amaba provided certain covenants and indemnities to JHIL in respect of its potential asbestos liabilities;
(b) JHIL agreed to pay certain amounts in exchange for those covenants and indemnities; and
(c) Amaca agreed that it would acquire all the shares in JHIL if they were put to it by a sole registered shareholder of the entirety of JHIL shares;
in circumstances where a reasonable person would expect, if it were generally available, that information to have a material effect on the price or value of JHIL shares. | 361 |
nsw_caselaw:549ff7443004262463c68ec8:362 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 480 With respect to JHINV I will make declarations in these terms: | 362 |
nsw_caselaw:549ff7443004262463c68ec8:363 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | The Court declares that: | 363 |
nsw_caselaw:549ff7443004262463c68ec8:364 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 1. On or about 10 June 2002 James Hardie Industries NV ( JHINV ) contravened s 1041H of the Corporations Act 2001 (Cth) by engaging in conduct in relation to a financial product, namely, shares in JHINV, that was misleading or deceptive or was likely to mislead or deceive in that it published to the Australian Stock Exchange ( ASX ) a set of slides ( ASX Slides ) which falsely and misleadingly represented that:
(a) it was certain or highly likely that the amount of funds made available to the Medical Research and Compensation Foundation ( Foundation ) would be sufficient to meet all legitimate present and future asbestos claims brought against two former subsidiaries of ABN 60 Pty Ltd (formerly known as James Hardie Industries Ltd) ( JHIL ) Amaca Pty Ltd ( Amaca ) and Amaba Pty Ltd ( Amaba ); and | 364 |
nsw_caselaw:549ff7443004262463c68ec8:365 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | (b) the material available to JHINV provided a reasonable basis for the assertion that it was certain or highly likely that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba.
2. On or about 10 June 2002 JHINV contravened s 1041E of the Corporations Act by making a statement or disseminating information to the ASX, namely, the ASX Slides that:
(a) was false in a material particular or materially misleading in that it falsely and misleadingly represented that:
(i) it was certain or highly likely that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba; and | 365 |
nsw_caselaw:549ff7443004262463c68ec8:366 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | (ii) the material available to JHINV provided a reasonable basis for the assertion that it was certain or highly likely that the amount of funds made available to the Foundation would be sufficient to meet all legitimate present and future asbestos claims brought against Amaca and Amaba;
(b) JHINV knew was false in a material particular or materially misleading; and
(c) was likely to induce persons in Australia to acquire financial products, namely, securities in JHINV, and to have the effect of maintaining or stabilising the price for trading in financial products, namely, securities in JHINV. | 366 |
nsw_caselaw:549ff7443004262463c68ec8:367 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | 3. On and from 25 March 2003 until 30 June 2003 JHINV contravened s 674(2) of the Corporations Act in that, as a listed disclosing entity to which the subsection applied, it failed to notify the ASX in accordance with the ASX Listing Rules of information that it had ( ABN 60 Information ) which those provisions required it to notify the ASX, namely, that JHINV and its subsidiary JHIL had arranged for JHIL’s transfer out of the James Hardie group of companies by the following steps:
(a) the cancellation on 15 March 2003 of partly paid shares issued by JHIL to JHINV;
(b) the consolidation of JHIL’s share capital into one fully paid share held by JHINV on 15 March 2003;
(c) the reduction of JHIL’s share capital by approximately $1.5m and payment of that amount to JHINV on 31 March 2003;
(d) the execution of the ABN 60 Foundation Trust Deed by JHINV on 31 March 2003; | 367 |
nsw_caselaw:549ff7443004262463c68ec8:368 | nsw_caselaw:549ff7443004262463c68ec8 | decision | new_south_wales | nsw_caselaw | text/html | 2009-08-20 00:00:00 | Australian Securities and Investments Commission v Macdonald (No 12) [2009] NSWSC 714 | https://www.caselaw.nsw.gov.au/decision/549ff7443004262463c68ec8 | 2024-05-26T11:20:31.640652+10:00 | (e) the execution of a Deed of Covenant, Indemnity and Access by JHINV and JHIL on 31 March 2003;
(f) the issue of 1,000 shares by JHIL to the ABN 60 Foundation as trustee of the ABN 60 Trust on 31 March 2003; and
(g) the cancellation by JHIL of its one fully paid share owned by JHINV for no consideration on or about 14 April 2003;
in circumstances where:
(h) the ABN 60 Information was not generally available; and
(i) a reasonable person would expect, if it were generally available, the ABN 60 Information to have a material effect on the price or value of JHINV shares.
481 I will make the following disqualification orders under s 206C of the Corporations Act.
482 I will make an order that Peter Donald Macdonald be disqualified from managing a corporation for a period of 15 years.
483 I will make an order that Peter James Shafron be disqualified from managing a corporation for a period 7 years. | 368 |