find the latest legal job
Corporate Counsel and Company Secretary
Category: Generalists - In House | Location: Newcastle, Maitland & Hunter NSW
· Highly-respected, innovative and entrepreneurial Not-for-Profit · Competency based Board
View details
Chief Counsel and Company Secretary
Category: Generalists - In House | Location: Newcastle, Maitland & Hunter NSW
· Dynamic, high growth organisation · ASX listed market leader
View details
In-house Projects Lawyer | Renewables / Solar | 2-5 Years PQE
Category: Generalists - In House | Location: All Australia
· Help design the future · NASDAQ Listed
View details
Insurance Lawyer (3-5 PAE)
Category: Insurance and Superannuation Law | Location: Brisbane CBD & Inner Suburbs Brisbane QLD
· Dynamic organisation ·
View details
Legal Counsel
Category: Corporate and Commercial Law | Location: North Sydney NSW 2060
· 18 month fixed term contract · 3-5 years PQE with TMT exposure
View details
Bound to fail

Bound to fail

A leading Australian corporate lawyer has labelled as “pathetic” the key argument put forward by Peter Shafron’s counsel in the failed High Court appeal by the former James Hardie general counsel.

Greg Golding (pictured), a senior partner at King & Wood Mallesons, addressed an exclusive audience of leading general counsel at the Tonkin General Counsel Summit in Sydney yesterday (9 October).

Golding addressed the topic of The High Court and the C-Suite: Implications of Shafron for company executives below board level with KWM solicitor Victoria Ngomba.

Golding, who has previously acted for James Hardie in negotiations with the NSW Government, criticised the argument put forward by Shafron’s legal counsel during his High Court appeal that he was only an officer of the company when acting as a company secretary.

At the time he was with James Hardie, Shafron held the dual roles of general counsel and company secretary. Shafron’s legal advisers included Middletons partner Murray Deakin and high-profile barristers Bret Walker SC and Richard Lancaster SC.

“Peter ran this pathetic argument in the High Court that he was only an officer when acting as a company secretary,” said Golding.  “ [Shafron’s argument was that] in performing that job the definition of a company secretary depends on the fact and circumstances, but it is essentially administrative in nature and, therefore, advising on ASX compliance and advising the board on ASX assessment were not really within the ambit of what he was doing.

“I personally think that argument was hopeless and the High Court agreed.”

When handing down its judgment in May, the High Court rejected the argument put forward by Shafron’s counsel that contraventions alleged against him concerned his responsibilities as an “officer” of the company, and thus should not be subjected to s180(1) of the Corporations Act 2001.

The High Court ruled that Shafron’s responsibilities with James Hardie as company secretary and general counsel were indivisible and must be viewed as a composite whole.

A key man
The High Court found that Shafron had breached the Act by failing to discharge his duties as an officer of the company with the degree of care and due diligence that a reasonable person in his position would have exercised.

In particular, the Supreme Court of NSW found that Shafron had failed to advise the board of James Hardie that an actuarial study he had commissioned to predict asbestos-related liabilities suffered from critical limitations.

This finding was affirmed by the NSW Court of Appeal.

In the High Court, Shafron argued that his failure to advise the board was done in his capacity as general counsel, therefore officers’ duties did not apply.

Individuals can also be deemed to be an officer of a company if they participate in making decisions that affect a whole or substantial part of the company.

Golding said that Shafron was intimately involved in the decision making during his time at James Hardie, stating that he was “up to his eyeballs” in the decision made by James Hardie in 2001 to separate from two subsidiaries facing substantial asbestos-related personal injury claims.

He also believed Shafron’s failure to inform the Board of aspects of the actuarial analysis was an abdication of his responsibilities.

“That is a pretty egregious breach in my view – the failure to give the Board the actuarial reports that underlined the recommendation [by senior management] to set up the Foundation.”

Like this story? Read more:

QLS condemns actions of disgraced lawyer as ‘stain on the profession’

NSW proposes big justice reforms to target risk of reoffending

The legal budget breakdown 2017

Bound to fail
lawyersweekly logo
Promoted content
Recommended by Spike Native Network
more from lawyers weekly
LCA president Fiona McLeod SC
Aug 17 2017
Where social fault lines meet the justice gap in Aus
After just returning from a tour of the Northern Territory, LCA president Fiona McLeod SC speaks wit...
Marriage equality flag
Aug 17 2017
ALHR backs High Court challenge to marriage equality postal vote
Australian Lawyers for Human Rights (ALHR) has voiced its support for a constitutional challenge to ...
Give advice
Aug 17 2017
A-G issues advice on judiciary’s public presence
Commonwealth Attorney-General George Brandis QC has offered his advice on the public presence of jud...
APPOINTMENTS
Allens managing partner Richard Spurio, image courtesy Allens' website
Jun 21 2017
Promo season at Allens
A group of lawyers at Allens have received promotions across its PNG and Australian offices. ...
May 11 2017
Partner exits for in-house role
A Victorian lawyer has left the partnership of a national firm to start a new gig with state governm...
Esteban Gomez
May 11 2017
National firm recruits ‘major asset’
A national law firm has announced it has appointed a new corporate partner who brings over 15 years'...
opinion
Nicole Rich
May 16 2017
Access to justice for young transgender Australians
Reform is looming for the process that young transgender Australians and their families must current...
Geoff Roberson
May 11 2017
The lighter side of the law: when law and comedy collide
On the face of it, there doesn’t seem to be much that is amusing about the law, writes Geoff Rober...
Help
May 10 2017
Advocate’s immunity – without fear or without favour but not both
On 29 March 2017, the High Court handed down its decision in David Kendirjian v Eugene Lepore & ...