Australian Securities and Investments Commission v LGSS Pty Ltd (No 2) [2024] FCA 665

Federal Court of Australia

Australian Securities and Investments Commission v LGSS Pty Ltd (No 2) [2024] FCA 665 File number(s): NSD 847 of 2023

Judgment of: O'CALLAGHAN J

Date of judgment: 20 June 2024

Catchwords: BANKING AND FINANCIAL INSTITUTIONS – "greenwashing" – where defendant contravened ss 12DB(1)(a) and 12DF(1) of the Australian Securities and Investments Commission Act 2001 (Cth) by making false or misleading representations, and engaging in conduct liable to mislead the public in relation to investments made by superannuation fund – form of declarations

Legislation: Australian Securities and Investments Commission Act 2001 (Cth) ss 12DB(1)(a), 12DF(1)

Cases cited: Australian Securities and Investments Commission v LGSS Pty Ltd [2024] FCA 587 Rural Press Ltd v Australian Competition and Consumer Commission (2003) 216 CLR 53

Division: General Division

Registry: New South Wales

National Practice Area: Commercial and Corporations

Sub-area: Regulator and Consumer Protection

Number of paragraphs: 6

Date of hearing: Determined on the papers

Counsel for the Plaintiff: J Hewitt SC with J Buncle

Solicitor for the Plaintiff Australian Securities and Investments Commission

Counsel for the Defendant HK Insall SC with AE Smith

Solicitor for the Defendant Allens

ORDERS NSD 847 of 2023

BETWEEN: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION Plaintiff

AND: LGSS PTY LTD ACN 078 003 497 AS TRUSTEE FOR LOCAL GOVERNMENT SUPER ABN 28 901 371 321 Defendant

order made by: O'CALLAGHAN J DATE OF ORDER: 20 JUNE 2024

THE COURT DECLARES THAT:

1. During the Relevant Period, LGSS, in trade or commerce, made representations in connection with the supply of financial services, and the promotion of the supply of financial services, in contravention of s 12DB(1)(a) of the ASIC Act, in that: (a) LGSS made the representation at item 1 of Annexure A from 25 May 2021 to 28 February 2023, but contrary to that representation it in fact held the investments identified in Table 1 of Annexure B, each of which were investments in companies that derived more than 10% of their revenue from gambling; (b) LGSS made the representation at item 2 of Annexure A from 25 May 2021 to 1 March 2023, but contrary to that representation it in fact held the investments identified in Table 1 of Annexure B, each of which were investments in companies that derived more than 10% of their revenue from gambling; (c) LGSS made the representation at item 5 of Annexure A from 28 October 2021 to 1 March 2023, but contrary to that representation it in fact held the investments identified in Table 1 of Annexure B, each of which were investments in companies that derived more than 10% of their revenue from gambling; (d) LGSS made the representation at item 6 of Annexure A from 28 October 2021 to 1 March 2023, but contrary to that representation: (i) it in fact held the investments identified in Table 1 of Annexure B, each of which were investments in companies that derived more than 10% of their revenue from gambling; and (ii) it in fact held the investments identified in Table 4 of Annexure B, each of which were investments in companies that derived revenue from oil tar sands; (e) LGSS made the representation at item 11 of Annexure A from 19 January 2022 to 8 August 2023, but contrary to that representation it in fact held the investments identified in Table 1 of Annexure B, each of which were investments in companies that derived more than 10% of their revenue from gambling; and (f) LGSS made the representation at item 13 of Annexure A from October 2021 to May 2023, but contrary to that representation it in fact held the investments identified in Table 5 of Annexure B, each of which were investments in companies that derived one-third or more of their revenue from coal mining; (g) LGSS made the representation at item 15 of Annexure A from 20 December 2022 to March 2023, but contrary to that representation it in fact held the investments identified in Table 3 of Annexure B, each of which were investments in companies that derived revenue from Russia; (h) LGSS made the representation at item 16 of Annexure A from 20 December 2022 to March 2023, but contrary to that representation it in fact held the investments identified in Table 3 of Annexure B, each of which were investments in companies that derived revenue from Russia; (i) LGSS made the representation at item 17 of Annexure A from May 2022 to April 2023, but contrary to that representation it in fact held the investments identified in Table 3 of Annexure B, each of which were investments in companies that derived revenue from Russia; (j) LGSS made the representation at item 18 of Annexure A from 20 December 2022 to March 2023, but contrary to that representation: (i) it in fact held the investments identified in Table 1 of Annexure B, each of which were investments in companies that derived more than 10% of their revenue from gambling; and (ii) it in fact held the investments identified in Table 4 of Annexure B, each of which were investments in companies that derived revenue from oil tar sands. 2. During the Relevant Period, LGSS, in trade or commerce, engaged in conduct that was liable to mislead the public as to the characteristics of the investments made by LGSS on behalf of Active Super in contravention of s 12DF(1) of the ASIC Act, in that: (a) LGSS engaged in the conduct referred to in sub-paragraphs (a) to (j) in Declaration 1 above; (b) LGSS made the representation at item 19 of Annexure A from 1 July 2022 to 1 May 2023, but contrary to that representation: (i) it in fact held the investments identified in Table 1 of Annexure B, each of which were investments in companies that derived more than 10% of their revenue from gambling; (ii) it in fact held the investments identified in Table 3 of Annexure B, each of which were investments in companies that derived revenue from Russia; (iii) it in fact held the investments identified in Table 4 of Annexure B, each of which were investments in companies that derived revenue from oil tar sands; (c) LGSS made the representation at item 20 of Annexure A from 25 May 2021 to 30 June 2022, but contrary to that representation it in fact held the investments identified in Table 5 of Annexure B, each of which were investments in companies that derived revenue one third or more of their revenue from coal mining.