Australian Securities and Investments Commission v John Barrie Loiterton & Ors [2004] NSWSC 172

New South Wales Supreme Court

CITATION : Australian Securities and Investments Commission v John Barrie Loiterton & Ors [2004] NSWSC 172 revised - 14/05/2004 20, 21, 24, 25, 26, 27, 28 and 31 March 2003 1, 2, 3, 4, 7, 8, 9, 10, 11, 14 and 15 April 2003 1, 5, 6, 7,12, 13, 14, 15, 20, 21, 22, 23, 26, 27, 28 and 29 May 2003 HEARING DATE(S) : 2, 3, and 4 June 2003 31 July 2003 15 September 2003 9 December 2003 JUDGMENT DATE : 1 April 2004 JURISDICTION: Equity Division JUDGMENT OF : Bergin J DECISION : See par. 586

CATCHWORDS : [CORPORATIONS] - Civil penalty proceedings under the Corporations Law as it existed in 1996 and 1997 relating to the preparation and publication of the statutory accounts of a public company and its subsidiaries - Application of sections 232, 318, 292, 295A, 298 and 1002G - Standing of the Australian Securities and Investments Commission to commence civil proceedings in its own name for an alleged breach of section 1002G. -Whether expert evidence required as to the 'materiality' of inside information for the purposes of section 1002G - [PRACTICE AND PROCEDURE] - Prosecutorial fairness in civil penalty proceedings against unrepresented defendants - Whether fairness achieved in prosecuting a claim for alleged contraventions of both section 232 (5) and section 1002G in respect of share trading - Application of Briginshaw standard in one but not the other case - Whether plaintiff's failure to provide a copy of transcript of a voluntary interview of a witness called by first defendant before witness was called rendered unfair the reliance on evidence in cross-examination admittedly inconsistent with that interview - [DIRECTORS] - Whether directors' conduct dishonest - Whether directors exercised appropriate degree of care and diligence - Whether circumstances existed to alert executive and non-executive directors to make further enquiry - Whether reliance can be placed on others in circumstances where there is knowledge that profits not real and/or there are circumstances that should have caused further enquiry as to nature of certain fees and profits. Companies (New South Wales) Code 1980 Companies Act 1961 (NSW) LEGISLATION CITED : Companies Act 1961 (Vic) Corporations Act 2001 (Cth) Corporations Law Adler & Anor v ASIC; Willaims v ASIC (2003) 46 ACSR 504 ASIC v Parkes (2001) 38 ACSR 355 ASIC v Sweeney [2001] NSWSC 114 Australian Growth Resources Corporation Pty Ltd (Rec and Mgrs appted) v Van Reesema & Ors (1988) 6 ACLC 529 Australian Securities Commission v Fairlie (1993) 11 ACLC 669 Briginshaw v Briginshaw (1938) 60 CLR 336 Chew v The Queen (1991) 173 CLR 626 Corporate Affairs Commission (NSW) v Transphere Pty Ltd & Eddie Solomon Holdings Inc (1988) 7 ACLC 205 Daniels & Ors (formerly practicing as Deloitte Haskins & Sells) v Anderson (1995) 37 NSWLR 438 Duke Group Ltd (in liq) v Pilmer (1998) 27 ACSR 1 Glover v Australian Ultra Concrete Floors Pty Ltd [ 2003] NSWCA 80 CASES CITED : In re Smith & Fawcett Ltd [1942] 1 Ch 304 Marchesi v Barnes and Keogh [1970] VR 434 Marra Developments Ltd v BW Rothe Pty Ltd [1977] 2 NSWLR 616 Nowlan v Marson Transport Pty Ltd (2001) 53 NSWLR 116 R v Byrnes & Hopwood (1995) 183 CLR 501 R v Rivkin [2004] NSWCCA 7 R v Towey (1996) 21 ACSR 46, (1996) 132 FLR 434 Rankin v Cooper (1907) 149 F 1010 Re HIH Insurance Ltd (in prov liq) and HIH Casualty and General Insurance Ltd (in prov liq); Australian Securities and Investments Commission v Adler & Ors (2002) 41 ACSR 72 Rich and Silbermann v ASIC (2003) 48 ACSR 6 R v Apostilides (1984) 154 CLR 563 White v Overland [2001] FCA 1333 Australian Securities and Investments Commission (Plaintiff) John Barrie Loiterton (First Defendant) PARTIES : Ian Robert Hall (Second Defendant) Ian Sapier (Third Defendant) Peter James Loiterton (Fourth Defendant) FILE NUMBER(S) : SC 3724/00 F P Carnovale and D J Price (Plaintiff) COUNSEL : John Barrie Loiterton (In Person) Ian Robert Hall (In Person) R J Brender (Third Defendant) SOLICITORS : Australian Securities and Investments Commisssion (Plaintiff) Gillis Delaney Brown (Third Defendant)