Australian Securities and Investments Commission, in the matter of Chemeq Limited (ACN 009 135 264) v Chemeq Limited (ACN 009 135 264) [2006] FCA 936

FEDERAL COURT OF AUSTRALIA

Australian Securities and Investments Commission, in the matter of Chemeq Limited (ACN 009 135 264) v Chemeq Limited (ACN 009 135 264) [2006] FCA 936 CORPORATIONS – continuous disclosure obligations – contravention – failure to disclose cost increases in construction of major production facility – failure to disclose lack of commercial significance of publicised grant of patent in the United States – admission of contraventions – agreed proposed orders – agreement as to appropriate penalties – purpose of continuous disclosure requirements – principles informing penalty discretion – factors relevant to penalty in non-disclosure contraventions – approach by court to agreements as to appropriate penalties – principle of judicial restraint – not to be equated to limitations in judicial review – effect of contraventions on market for company shares – lack of dishonesty – absence of adequate compliance systems – post contravention establishment of detailed compliance system – cooperation with regulator – admission of contraventions – substantial change to composition of Board of Directors and senior management – relevance of effect of penalty on shareholders induced by non-disclosure to acquire shares or not dispose of them – declarations made – penalties imposed in terms proposed Corporations Act 2001 (Cth) s 674, s 676, s 677, s 111AC, s 111AD, s 111AE, s 92, s 1317DA, s 1317E, s 1317G(1A),

Rich v Australian Securities and Investments Commission (2000) 220 CLR 129 cited Australian Securities and Investments Commission v Donovan (1998) 28 ACSR 583 cited Australian Securities and Investments Commission v Alder (2002) 42 ACSR 80 cited Australian Competition and Consumer Commission v ABB Transmission Distribution Ltd (No 2) (2002) 190 ALR 169 cited Australian Competition and Consumer Commission v Real Estate Institute of Western Australia (1999) 161 ALR 69 cited NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 cited Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd [2002] FCA 619 cited Yeung K, Securing Compliance: A Principled Approach (Hart Publishing, 2004, Ch 4) AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION v CHEMEQ LIMITED (ACN 009 135 264) CHEMEQ LIMITED (ACN 009 135 264) v AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION WAD 294 OF 2004 FRENCH J 24 JULY 2006 PERTH IN THE FEDERAL COURT OF AUSTRALIA