FEDERAL COURT OF AUSTRALIA Australian Securities and Investments Commission v Fortescue Metals Group (No 2) [2011] FCAFC 68 Citation: Australian Securities and Investments Commission v Fortescue Metals Group (No 2) [2011] FCAFC 68 Appeal from: Australian Securities and Investments Commission v Fortescue Metals Group Ltd (No 5) [2009] FCA 1586 Parties: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION v FORTESCUE METALS GROUP LTD (ACN 002 594 872) and JOHN ANDREW HENRY FORREST File number(s): WAD 23 of 2010 Judges: KEANE CJ, EMMETT AND FINKELSTEIN JJ Date of judgment: 20 May 2011 Catchwords: CORPORATIONS – specificity in relation to declarations - variation of orders. Legislation: Corporations Act 2001 (Cth) ss 180(1), 674(2), 672(2A), 1041H, 1317E; Federal Court Rules r 7(3), O 35 Date of hearing: 22, 23, 24, 25, 29, 30 November 2010 Place: Perth Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 8 Solicitor for the Appellant: Mr Beau Deleuil and Ms Danielle Eaton of Mallesons Stephen Jaques Solicitor for the First Respondent: Mr Mark van Brakel and Mr Mark Hyde of Corrs Chambers Westgarth Solicitor for the Second Respondent: Mr James Scovell of Gadens IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION WAD 23 of 2010 ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA BETWEEN: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION Appellant AND: FORTESCUE METALS GROUP LTD (ACN 002 594 872) First Respondent JOHN ANDREW HENRY FORREST Second Respondent JUDGES: KEANE CJ, EMMETT AND FINKELSTEIN JJ DATE OF ORDER: 20 May 2011 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. The Court varies order 2 pronounced on 18 February 2011 by ordering: The order made on the 23 December 2009 be set aside and in lieu thereof: 2.1 With respect to the first respondent, pursuant to s 1317E of the Corporations Act 2001 (Cth) (the Act) the Court declares that: (a) From 23 August 2004 (after the first respondent's notification to the ASX by its letter of 23 August 2004) to 24 March 2005, the first respondent contravened s 674(2) of the 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 held by it that those provisions required it to notify the ASX, namely, information disclosing the material terms and effect of the CREC Framework Agreement, in circumstances where: i. that information was not generally available; and ii. a reasonable person would expect that information, if it were generally available, to have a material effect on the price or value of the first respondent's shares. (b) From 5 November 2004 (after the first respondent's notification to the ASX by its letter of 5 November 2004) to 24 March 2005, the first respondent contravened s 674(2) of the 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 held by it that those provisions required it to notify the ASX, namely, information disclosing the material terms and effect of the CHEC Framework Agreement, in circumstances where: i. that information was not generally available; and ii. a reasonable person would expect that information, if it were generally available, to have a material effect on the price or value of the first respondent's shares. (c) From 5 November 2004 (after the first respondent's notification to the ASX by its letter of 5 November 2004) to 24 March 2005, the first respondent contravened s 674(2) of the 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 held by it that those provisions required it to notify the ASX, namely, information disclosing the material terms and effect of the CMCC Framework Agreement, in circumstances where: i. that information was not generally available; and ii. a reasonable person would expect that information, if it were generally available, to have a material effect on the price or value of the first respondent's shares. 2.2 Also with respect to the first respondent, the Court declares that: (a) Between 23 August 2004 and 28 February 2005, the first respondent contravened s 1041H of the Act by engaging in a course of conduct in relation to a financial product, namely shares in the first respondent, that was misleading or deceptive or was likely to mislead or deceive investors in FMG, in that on the occasions set out in Schedule A to the Reasons for Judgment the first respondent misrepresented the material terms and effect of the CREC Framework Agreement. (b) Between 5 November 2004 and 28 February 2005, the first respondent contravened s 1041H of the Act by engaging in a course of conduct in relation to a financial product, namely shares in the first respondent, that was misleading or deceptive or was likely to mislead or deceive investors in FMG, in that on the occasions set out in paragraphs 3, 4, 5, 11, 12, 13, 14, 15 and 16 of Schedule A to the Reasons for Judgment, the first respondent misrepresented the material terms and effect of the CHEC Framework Agreement. (c) Between 5 November 2004 and 28 February 2005, the first respondent contravened s 1041H of the Act by engaging in a course of conduct in relation to a financial product, namely shares in the first respondent, that was misleading or deceptive or was likely to mislead or deceive investors in FMG, in that on the occasions set out in paragraphs 3, 4, 5, 11, 12, 13, 14, 15 and 16 of Schedule A to the Reasons for Judgment, the first respondent misrepresented the material terms and effect of the CMCC Framework Agreement. 2.3 With respect to the second respondent, pursuant to s 1317E of the Act the Court declares that: (a) On and from 23 August 2004 to 24 March 2005, the second respondent contravened s 674(2A) of the Act by reason of his knowing involvement in the first respondent's contravention of s 674(2) of the Act referred to in paragraph 2.1(a) above. (b) On and from 5 November 2004 to 24 March 2005, the second respondent contravened s 674(2A) of the Act by reason of his knowing involvement in the first respondent's contravention of s 674(2) of the Act referred to in paragraph 2.1(b) above. (c) On and from 5 November 2004 to 24 March 2005, the second respondent contravened s 674(2A) of the Act by reason of his knowing involvement in the first respondent's contravention of s 674(2) of the Act referred to in paragraph 2.1(c) above. (d) The second defendant contravened s 180(1) of the Act in relation to the first respondent, as a director and Chief Executive Officer of that corporation, by engaging in a course of conduct between 23 August 2004 and 24 March 2005 in respect of the CREC Framework Agreement, by which he failed to exercise his duties with the required degree of care and diligence by causing, authorizing, permitting or not preventing the first respondent engaging in the contraventions referred to in paragraphs 2.1(a) and 2.2(a) above. (e) The second defendant contravened s 180(1) of the Act in relation to the first respondent, as a director and Chief Executive Officer of that corporation, by engaging in a course of conduct between 5 November 2004 and 24 March 2005 in respect of the CHEC Framework Agreement, by which he failed to exercise his duties with the required degree of care and diligence by causing, authorizing, permitting or not preventing the first respondent engaging in the contraventions referred to in paragraphs 2.1(b) and 2.2(b) above. (f) The second defendant contravened s 180(1) of the Act in relation to the first respondent, as a director and Chief Executive Officer of that corporation, by engaging in a course of conduct between 5 November 2004 and 24 March 2005 in respect of the CMCC Framework Agreement, by which he failed to exercise his duties with the required degree of care and diligence by causing, authorizing, permitting or not preventing the first respondent engaging in the contraventions referred to in paragraphs 2.1(c) and 2.2(c) above. 2.4 The respondents pay the applicant's costs of and incidental to the proceeding. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION WAD 23 of 2010 ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA BETWEEN: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION Appellant AND: FORTESCUE METALS GROUP LTD (ACN 002 594 872) First Respondent JOHN ANDREW HENRY FORREST Second Respondent JUDGES: KEANE CJ, EMMETT AND FINKELSTEIN JJ DATE: 20 MAY 2011 PLACE: PERTH REASONS FOR JUDGMENT 1 On 18 February 2011, the Court pronounced the following orders: 1. The appeal be allowed. 2. The order made on 23 December 2009 be seat aside and in lieu thereof: 2.1 The Court declares that the First Respondent has contravened ss 674(2) and 1041H of the Corporations Act 2001 (Cth). 2.2 The Court declares that the Second Respondent has contravened ss 180(1) and 674(2A) of the Corporations Act 2001 (Cth). 2.3 The respondents pay the applicant's costs of and incidental to the proceeding. 3. The matter be remitted to a judge of the Federal Court of Australia. 4. The respondents pay the appellant's costs of the appeal. 2 The order as pronounced reflected the relief sought by the Australian Securities and Investments Commission (ASIC) in its notice of appeal. 3 On 15 March 2011, ASIC's solicitors wrote to the Court contending that greater specificity was required in relation to declarations made pursuant to s 1317E(2) of the Corporations Act 2001 (Cth) and seeking to have the order varied pursuant, inter alia, to O 35 r 7(3) of the Federal Court Rules (the FCR). 4 The Court invited the parties to make submissions in relation to the appropriate form of order. ASIC proposed the following in lieu of order 2: 2. The order made on the 23 December 2009 be set aside and in lieu thereof: 2.1 With respect to the first respondent, pursuant to s 1317E of the Corporations Act 2001 (Cth) (the Act) the Court declares that: (a) On and from 23 August 2004 to 24 March 2005, the first respondent contravened s 674(2) of the 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 held by it that those provisions required it to notify the ASX, namely, information disclosing the material terms and effect of the CREC Framework Agreement, in circumstances where: i. that information was not generally available; and ii. a reasonable person would expect that information, if it were generally available, to have a material effect on the price or value of the first respondent's shares. (b) On and from 5 November 2004 to 24 March 2005, the first respondent contravened s 674(2) of the 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 held by it that those provisions required it to notify the ASX, namely, information disclosing the material terms and effect of the CHEC Framework Agreement, in circumstances where: i. that information was not generally available; and ii. a reasonable person would expect that information, if it were generally available, to have a material effect on the price or value of the first respondent's shares. (c) On and from 5 November 2004 to 24 March 2005, the first respondent contravened s 674(2) of the 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 held by it that those provisions required it to notify the ASX, namely, information disclosing the material terms and effect of the CMCC Framework Agreement, in circumstances where: i. that information was not generally available; and ii. a reasonable person would expect that information, if it were generally available, to have a material effect on the price or value of the first respondent's shares. 2.2 Also with respect to the first respondent, the Court declares that: (a) Between 23 August 2004 and 28 February 2005, the first respondent contravened s 1041H of the Act by engaging in a course of conduct in relation to a financial product, namely shares in the first respondent, that was misleading or deceptive or was likely to mislead or deceive investors in FMG, in that on the occasions set out in Schedule A to the Reasons for Judgment the first respondent misrepresented the material terms and effect of the CREC Framework Agreement. (b) Between 5 November 2004 and 28 February 2005, the first respondent contravened s 1041H of the Act by engaging in a course of conduct in relation to a financial product, namely shares in the first respondent, that was misleading or deceptive or was likely to mislead or deceive investors in FMG, in that on the occasions set out in paragraphs 3, 4, 5, 11, 12, 13, 14, 15 and 16 of Schedule A to the Reasons for Judgment, the first respondent misrepresented the material terms and effect of the CHEC Framework Agreement. (c) Between 5 November 2004 and 28 February 2005, the first respondent contravened s 1041H of the Act by engaging in a course of conduct in relation to a financial product, namely shares in the first respondent, that was misleading or deceptive or was likely to mislead or deceive investors in FMG, in that on the occasions set out in paragraphs 3, 4, 5, 11, 12, 13, 14, 15 and 16 of Schedule A to the Reasons for Judgment, the first respondent misrepresented the material terms and effect of the CMCC Framework Agreement. 2.3 With respect to the second respondent, pursuant to s 1317E of the Act the Court declares that: (a) On and from 23 August 2004 to 24 March 2005, the second respondent contravened s 674(2A) of the Act by reason of his knowing involvement in the first respondent's contravention of s 674(2) of the Act referred to in paragraph 2.1(a) above. (b) On and from 5 November 2004 to 24 March 2005, the second respondent contravened s 674(2A) of the Act by reason of his knowing involvement in the first respondent's contravention of s 674(2) of the Act referred to in paragraph 2.1(b) above. (c) On and from 5 November 2004 to 24 March 2005, the second respondent contravened s 674(2A) of the Act by reason of his knowing involvement in the first respondent's contravention of s 674(2) of the Act referred to in paragraph 2.1(c) above. (d) The second defendant contravened s 180(1) of the Act in relation to the first respondent, as a director and Chief Executive Officer of that corporation, by engaging in a course of conduct between 23 August 2004 and 24 March 2005 in respect of the CREC Framework Agreement, by which he failed to exercise his duties with the required degree of care and diligence by causing, authorizing, permitting or not preventing the first respondent engaging in the contraventions referred to in paragraphs 2.1(a) and 2.2(a) above. (e) The second defendant contravened s 180(1) of the Act in relation to the first respondent, as a director and Chief Executive Officer of that corporation, by engaging in a course of conduct between 5 November 2004 and 24 March 2005 in respect of the CHEC Framework Agreement, by which he failed to exercise his duties with the required degree of care and diligence by causing, authorizing, permitting or not preventing the first respondent engaging in the contraventions referred to in paragraphs 2.1(b) and 2.2(b) above. (f) The second defendant contravened s 180(1) of the Act in relation to the first respondent, as a director and Chief Executive Officer of that corporation, by engaging in a course of conduct between 5 November 2004 and 24 March 2005 in respect of the CMCC Framework Agreement, by which he failed to exercise his duties with the required degree of care and diligence by causing, authorizing, permitting or not preventing the first respondent engaging in the contraventions referred to in paragraphs 2.1(c) and 2.2(c) above. 2.4 The respondents pay the applicant's costs of and incidental to the proceeding. 5 The respondents do not consent to the orders proposed by ASIC; but they do not contest the Court's power to vary the order of 23 December 2010 pursuant to O 35 r 7(3) of the FCR. Nor do they suggest that they would be prejudiced by the variation sought by ASIC. They proposed the following: 2. The order made on the 23 December 2009 be set aside and in lieu thereof: 2.1 With respect to the first respondent, pursuant to s 1317E of the Corporations Act 2001 (Cth) (the Act) the Court declares that: (a) From 23 August 2004 (after the first respondent's notification to the ASX by its letter of 23 August 2004) to 24 March 2005, the first respondent contravened s 674(2) of the 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 held by it that those provisions required it to notify the ASX, namely, information disclosing the material terms and effect of the CREC Framework Agreement, in circumstances where: i. that information was not generally available; and ii. a reasonable person would expect that information, if it were generally available, to have a material effect on the price or value of the first respondent's shares. (b) From 5 November 2004 (after the first respondent's notification to the ASX by its letter of 5 November 2004) to 24 March 2005, the first respondent contravened s 674(2) of the 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 held by it that those provisions required it to notify the ASX, namely, information disclosing the material terms and effect of the CHEC Framework Agreement, in circumstances where: i. that information was not generally available; and ii. a reasonable person would expect that information, if it were generally available, to have a material effect on the price or value of the first respondent's shares. (c) From 5 November 2004 (after the first respondent's notification to the ASX by its letter of 5 November 2004) to 24 March 2005, the first respondent contravened s 674(2) of the 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 held by it that those provisions required it to notify the ASX, namely, information disclosing the material terms and effect of the CMCC Framework Agreement, in circumstances where: i. that information was not generally available; and ii. a reasonable person would expect that information, if it were generally available, to have a material effect on the price or value of the first respondent's shares. 2.2 Also with respect to the first respondent, the Court declares that: (a) Between 23 August 2004 and 28 February 2005, the first respondent contravened s 1041H of the Act by engaging in a course of conduct in relation to a financial product, namely shares in the first respondent, that was misleading or deceptive or was likely to mislead or deceive investors in FMG, in that on the occasions set out in Schedule A to the Reasons for Judgment the first respondent misrepresented the material terms and effect of the CREC Framework Agreement. (b) Between 5 November 2004 and 28 February 2005, the first respondent contravened s 1041H of the Act by engaging in a course of conduct in relation to a financial product, namely shares in the first respondent, that was misleading or deceptive or was likely to mislead or deceive investors in FMG, in that on the occasions set out in paragraphs 3, 4, 5, 11, 12, 13, 14, 15 and 16 of Schedule A to the Reasons for Judgment, the first respondent misrepresented the material terms and effect of the CHEC Framework Agreement. (c) Between 5 November 2004 and 28 February 2005, the first respondent contravened s 1041H of the Act by engaging in a course of conduct in relation to a financial product, namely shares in the first respondent, that was misleading or deceptive or was likely to mislead or deceive investors in FMG, in that on the occasions set out in paragraphs 3, 4, 5, 11, 12, 13, 14, 15 and 16 of Schedule A to the Reasons for Judgment, the first respondent misrepresented the material terms and effect of the CMCC Framework Agreement. 2.3 With respect to the second respondent, pursuant to s 1317E of the Act the Court declares that: (a) On and from 23 August 2004 to 24 March 2005, the second respondent contravened s 674(2A) of the Act by reason of his knowing involvement in the first respondent's contravention of s 674(2) of the Act referred to in paragraph 2.1(a) above. (b) On and from 5 November 2004 to 24 March 2005, the second respondent contravened s 674(2A) of the Act by reason of his knowing involvement in the first respondent's contravention of s 674(2) of the Act referred to in paragraph 2.1(b) above. (c) On and from 5 November 2004 to 24 March 2005, the second respondent contravened s 674(2A) of the Act by reason of his knowing involvement in the first respondent's contravention of s 674(2) of the Act referred to in paragraph 2.1(c) above. (d) The second defendant contravened s 180(1) of the Act in relation to the first respondent, as a director and Chief Executive Officer of that corporation, by engaging in a course of conduct between 23 August 2004 and 24 March 2005 in respect of the CREC Framework Agreement, by which he failed to exercise his duties with the required degree of care and diligence by causing, authorizing, permitting or not preventing the first respondent engaging in the contraventions referred to in paragraphs 2.1(a) and 2.2(a) above. (e) The second defendant contravened s 180(1) of the Act in relation to the first respondent, as a director and Chief Executive Officer of that corporation, by engaging in a course of conduct between 5 November 2004 and 24 March 2005 in respect of the CHEC Framework Agreement, by which he failed to exercise his duties with the required degree of care and diligence by causing, authorizing, permitting or not preventing the first respondent engaging in the contraventions referred to in paragraphs 2.1(b) and 2.2(b) above. (f) The second defendant contravened s 180(1) of the Act in relation to the first respondent, as a director and Chief Executive Officer of that corporation, by engaging in a course of conduct between 5 November 2004 and 24 March 2005 in respect of the CMCC Framework Agreement, by which he failed to exercise his duties with the required degree of care and diligence by causing, authorizing, permitting or not preventing the first respondent engaging in the contraventions referred to in paragraphs 2.1(c) and 2.2(c) above. 2.4 The respondents pay the applicant's costs of and incidental to the proceeding. 6 We consider that the respondents' proposal reflects more precisely with the Court's conclusion that the first respondent contravened s 674(2) of the Corporations Act 2001 (Cth) after its initial disclosure of information about the framework agreements and that, in relation to each of the framework agreements, there was one contravention. 7 It should be noted that neither party seeks any variation to orders 1, 3 and 4 of the orders pronounced on 18 February 2011. 8 Accordingly, we would vary the orders of 18 February 2011 by ordering: The order made on the 23 December 2009 be set aside and in lieu thereof: 2.1 With respect to the first respondent, pursuant to s 1317E of the Corporations Act 2001 (Cth) (the Act) the Court declares that: (a) From 23 August 2004 (after the first respondent's notification to the ASX by its letter of 23 August 2004) to 24 March 2005, the first respondent contravened s 674(2) of the 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 held by it that those provisions required it to notify the ASX, namely, information disclosing the material terms and effect of the CREC Framework Agreement, in circumstances where: i. that information was not generally available; and ii. a reasonable person would expect that information, if it were generally available, to have a material effect on the price or value of the first respondent's shares. (b) From 5 November 2004 (after the first respondent's notification to the ASX by its letter of 5 November 2004) to 24 March 2005, the first respondent contravened s 674(2) of the 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 held by it that those provisions required it to notify the ASX, namely, information disclosing the material terms and effect of the CHEC Framework Agreement, in circumstances where: i. that information was not generally available; and ii. a reasonable person would expect that information, if it were generally available, to have a material effect on the price or value of the first respondent's shares. (c) From 5 November 2004 (after the first respondent's notification to the ASX by its letter of 5 November 2004) to 24 March 2005, the first respondent contravened s 674(2) of the 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 held by it that those provisions required it to notify the ASX, namely, information disclosing the material terms and effect of the CMCC Framework Agreement, in circumstances where: i. that information was not generally available; and ii. a reasonable person would expect that information, if it were generally available, to have a material effect on the price or value of the first respondent's shares. 2.2 Also with respect to the first respondent, the Court declares that: (a) Between 23 August 2004 and 28 February 2005, the first respondent contravened s 1041H of the Act by engaging in a course of conduct in relation to a financial product, namely shares in the first respondent, that was misleading or deceptive or was likely to mislead or deceive investors in FMG, in that on the occasions set out in Schedule A to the Reasons for Judgment the first respondent misrepresented the material terms and effect of the CREC Framework Agreement. (b) Between 5 November 2004 and 28 February 2005, the first respondent contravened s 1041H of the Act by engaging in a course of conduct in relation to a financial product, namely shares in the first respondent, that was misleading or deceptive or was likely to mislead or deceive investors in FMG, in that on the occasions set out in paragraphs 3, 4, 5, 11, 12, 13, 14, 15 and 16 of Schedule A to the Reasons for Judgment, the first respondent misrepresented the material terms and effect of the CHEC Framework Agreement. (c) Between 5 November 2004 and 28 February 2005, the first respondent contravened s 1041H of the Act by engaging in a course of conduct in relation to a financial product, namely shares in the first respondent, that was misleading or deceptive or was likely to mislead or deceive investors in FMG, in that on the occasions set out in paragraphs 3, 4, 5, 11, 12, 13, 14, 15 and 16 of Schedule A to the Reasons for Judgment, the first respondent misrepresented the material terms and effect of the CMCC Framework Agreement. 2.3 With respect to the second respondent, pursuant to s 1317E of the Act the Court declares that: (a) On and from 23 August 2004 to 24 March 2005, the second respondent contravened s 674(2A) of the Act by reason of his knowing involvement in the first respondent's contravention of s 674(2) of the Act referred to in paragraph 2.1(a) above. (b) On and from 5 November 2004 to 24 March 2005, the second respondent contravened s 674(2A) of the Act by reason of his knowing involvement in the first respondent's contravention of s 674(2) of the Act referred to in paragraph 2.1(b) above. (c) On and from 5 November 2004 to 24 March 2005, the second respondent contravened s 674(2A) of the Act by reason of his knowing involvement in the first respondent's contravention of s 674(2) of the Act referred to in paragraph 2.1(c) above. (d) The second defendant contravened s 180(1) of the Act in relation to the first respondent, as a director and Chief Executive Officer of that corporation, by engaging in a course of conduct between 23 August 2004 and 24 March 2005 in respect of the CREC Framework Agreement, by which he failed to exercise his duties with the required degree of care and diligence by causing, authorizing, permitting or not preventing the first respondent engaging in the contraventions referred to in paragraphs 2.1(a) and 2.2(a) above. (e) The second defendant contravened s 180(1) of the Act in relation to the first respondent, as a director and Chief Executive Officer of that corporation, by engaging in a course of conduct between 5 November 2004 and 24 March 2005 in respect of the CHEC Framework Agreement, by which he failed to exercise his duties with the required degree of care and diligence by causing, authorizing, permitting or not preventing the first respondent engaging in the contraventions referred to in paragraphs 2.1(b) and 2.2(b) above. (f) The second defendant contravened s 180(1) of the Act in relation to the first respondent, as a director and Chief Executive Officer of that corporation, by engaging in a course of conduct between 5 November 2004 and 24 March 2005 in respect of the CMCC Framework Agreement, by which he failed to exercise his duties with the required degree of care and diligence by causing, authorizing, permitting or not preventing the first respondent engaging in the contraventions referred to in paragraphs 2.1(c) and 2.2(c) above. 2.4 The respondents pay the applicant's costs of and incidental to the proceeding. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Keane CJ, Emmett and Finkelstein JJ. Associate: Dated: 20 May 2011