Australian Securities and Investments Commission v Healey [2011] FCA 717

FEDERAL COURT OF AUSTRALIA

Australian Securities and Investments Commission v Healey [2011] FCA 717 Citation: Australian Securities and Investments Commission v Healey [2011] FCA 717

Parties: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION v BRIAN HEALEY, ANDREW THOMAS SCOTT, SAMUEL KAVOURAKIS, JAMES WILLIAM HALL, PAUL ASHLEY COOPER, PETER GRAHAM GOLDIE, LOUIS PETER WILKINSON and ROMANO GEORGE NENNA

File number: VID 750 of 2009

Judge: MIDDLETON J

Date of judgment: 27 June 2011

Catchwords: CORPORATIONS – Directors and officers – Duties – Functions – Division of functions between Board and management – Non-executive directors – Duties of non-executive directors – Degree of skill required of non-executive directors – Extent to which directors entitled to rely on judgment and advice of management and experts – Duties of chief executive officer – Statutory duty of care and diligence – Standard of care – Duty to read and understand financial statements – Duty to apply background knowledge to review of financial statements NEGLIGENCE – Directors – Failing to take reasonable steps to secure compliance by a company of its obligations in relation to accounting records – Nature of what is required – Relevance of belief that others discharging the obligation – Reliance on others – Whether reliance on internal and external processes discharges duties of directors – Negligence not mistake STATUTES - Corporations Act 2001 (Cth) – ss 180, 344, 601FD, 294, 295A, 296, 297, 298, 299, 200A – Interplay between s 180 and s 344 of the Corporations Act 2001 (Cth) PRACTICE AND PROCEDURE – Pleadings – Principles regarding unpleaded case – Whether parties can depart from pleaded case – No case to answer submission – Election – Procedure in Federal Court of Australia – Federal Court Rules – Order 35 Rule 1 – s 31A of the Federal Court of Australia Act 1976 (Cth) EVIDENCE – Onus and standard of proof in civil penalty proceedings