THE High Court has granted leave for the corporate regulator to appeal a decision of a New South Wales court that overturned some penalties against James Hardie directors.
In April 2009, the NSW Supreme Court found that James Hardie's chief executive, board, some senior executives and the company itself had breached disclosure obligations through statements made about the adequacy of funding for the asbestos compensation fund in 2001.
The new ASIC chairman Greg Medcraft said the case sets important legal precedents about the responsibilities of directors and company officers, which is why the regulator is taking it all the way to the highest court for a final decision.
Medcraft said ASIC acknowledges that it has an obligation to conduct proceedings fairly but is seeking clarification of the nature, content and scope of the duty of fairness stated by the Court of Appeal.
"There is a public interest in seeking this clarification, as it has a significant effect on the conduct of civil enforcement proceedings by regulatory agencies such as ASIC."
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. In doing so, Medcraft said, the directors breached their duty to the company.