2. Select a case below to find, read, understand and present. Once a case has been selected by a group, that case is not open for other groups to select. 3. The length of the written assignment is to...

AUSTRALIAN SECURITIES AND INVESTMENT COMMISSION V/s MEREDITH
HELLICAR & ORS [2012] HCA 17
A. Issues to be addressed by High Court:
The important question which High Court was required to address in the above cited case was
whether failure on part of ASIC for not providing the evidence of the witness reduces the
strength of other evidences at large and expressing the responsibilities of executive and non-
executive directors along with other officers of the company.
B. Rule of Law:
Corporation Act 2001 - Section 180(1)
The judgment is in relation to section 180(1) of the Corporation Act 2001 which provides for the
duty of directors and other officers of company to exercise their powers with reasonable care and
due diligence. It is a provision resulting in civil penal proceedings and requires the officers to
make informed decisions with integrity and honesty.
C. Application of rule:
A
ief background and facts of the case are as under:
1. James Hardie Industries Ltd’s board of directors; herein after refe
ed as “JHIL”,
approved a proposal for restructure of James Hardie group of companies wherein two of
its subsidiaries with significant asbestos- related disease liabilities were separated and
entered into a deed of covenant and indemnity.
2. Accordingly, a foundation named Medical Research and Compensation Foundation was
established in order to fund the compensation claims made against the separated
companies by the people who are injured by its products.
3. The company, thereafter, gave the announcement to ASX detailing its separation and
claimed that the deposits in the foundation are sufficient to meet all compensation claims
whether present or future.
4. ASIC, in year 2007,
ought before the Supreme Court of New South Wales civil penalty
proceedings for contravening the provisions of section 180(1) of the Corporations Act
2001 against the directors of the company including three former executive directors,
seven former non-executive directors and the company secretary and presented at the
time of trail, the Fe
uary board meeting’s minutes of the company. Such minutes of the
oard recorded the draft of announcement to be made at ASX. ASIC provided that these
minutes were tabled and approved in Fe
uary’01 and later, in board meeting of April
2001, those were adopted and signed as accurate record.
5. ASIC alleged that each of them have
eached their duties towards the company by non
exercising due care and diligence with respect to the announcement approved for the
share market and was considered as misleading as it was underfunded by $1.5 billion.
6. On this, the company responded and claimed that the board minutes so offered by ASIC
to the court are forged and that they were evidently inco
ect in other aspects.
7. Two witnesses were presented by ASIC to give evidence about the board meeting denied
to recall the events, however, the witnesses of respondents provided that they have not
accepted such ASX announcement draft. Also, JHIC’s lawye
solicitor who attended and
supervised the preparation of the draft board minutes of the company’s Fe
uary board
meeting, Mr. David Ro
was not called upon by ASIC during the trial proceedings as
witness.
8. The trail judge of NSW Supreme Court, Gzell J, held that the board has approved the
draft announcement and that seven directors of the company
eached the provisions of
the act. Apart from this, the company secretary, Mr. Shafron, also held accountable for
not advising the board about the ambiguous minutes being drafted for announcement.
9. Thus, the court imposed penalties of $30,000 and ba
ed...