ASIC seeks leave to appeal Hardie decision

The corporate watchdog has announced it will seek to appeal a decision which
overturned bans on seven former directors of James Hardie Industries applying to the
High Court for special leave.
Last month the full bench of the NSW Court of Appeal overturned a ruling that found
the non-executive directors misled the Australian Stock Exchange (ASX) about the
company's ability to fund asbestos claims.
In doing so the directors, including former chairwoman Meredith Hellicar, were no
longer banned from serving on company boards until 2014.
On Friday the Australian Securities and Investments Commission (ASIC) said it had
filed applications in the High Court for special leave to appeal the decision.
In a statement, ASIC said the judgment by the NSW Court of Appeal raised several
issues of importance concerning the watchdog's obligations in relation to the civil
penalty proceeding.
One of those was ASIC's decision not to call a partner for one of James Hardie's
main external legal advisers Allens Arthur Robinson, David Robb, to give evidence
during the proceedings.
In handing down the judgment on December 17, Chief Justice James Spigelman said Mr
Robb could have testified as to whether the directors at a February board meeting
agreed to sign off on the misleading statement to the ASX.
"The failure to call one of the legal advisers of JHIL undermined the cogency of
ASIC's case," Justice Spigelman said.
If granted leave, ASIC will contend that the Court of Appeal erred in describing the
scope and content of its obligation and how that view affected the outcome of the
appeal.
Furthermore, ASIC will seek to challenge some of the conclusions reached by the
court in assessing whether the James Hardie board approved the ASX announcement,
which was claimed to be misleading.
ASIC chairman Tony D'Aloisio said the watchdog is seeking to clarify the content and
scope of its obligation during the civil penalty proceedings.
"Seeking this clarification is inthe public interest, as it will be of considerable
significance for how regulatory agencies such as ASIC conduct civil enforcement
proceedings," Mr D'Aloisio.
"ASIC is also seeking to uphold the finding of the trial judge that the directors of
James Hardie approved the ASX announcement made by the company and in doing so
breached their duty to the company."
The directors whose appeals were successful were Ms Hellicar and former
non-executive directors Michael Brown, Michael Gillfillan, Martin Koffel, Dan
O'Brien, Greg Terry, and Peter Willcox.
ormer chief financial officer Phillip Morley had his appeal dismissed while former
general counsel Peter Shafron's appeal was dismissed in part.