THE corporate regulator has been handed the opportunity to continue its fight against former Australian Wheat Board director Andrew Lindberg.
The Court of Appeal of the Supreme Court of Victoria today allowed the appeal by ASIC against the decision made by Justice Robson on 9 December 2009 to permanently stay ASIC’s second civil penalty case against Lindberg, finding that there was no abuse of process in the commencement by ASIC of a second claim.
Three years after commissioner Terence Cole QC released his multi-volume report into AWB's payment of kickbacks to Iraq, ASIC was left holding the can. It announced in December last year that it would appeal the Supreme Court decision to halt half of its proceedings against Lindberg.
In halting the case, Justice Robson said this element of ASIC’s case against Lindberg would be vexatious and oppressive. He said that to pursue it would bring the administration of justice into disrepute.
It is expected that in its appeal, ASIC will raise what it considers to be the judge’s erroneous interpretation of its statement of claim.
In his written decision, Justice Robson suggested Lindberg suffered “strain and stress and humiliation of sitting through the opening”, which resulted in “considerable publicity … that was especially damaging to Lindberg’s credit and reputation”.
ASIC’s second case concerns allegations that Lindberg misled the AWB board about its internal investigation - known as Project Rose - and the United Nations’ Volcker Inquiry into the Iraqi Oil-for-Food scandal.
The Court of Appeal overturned the trial judge’s ruling that ASIC had acted unreasonably in failing to include these allegations in the first proceedings and held that his honour had overlooked three matters:
The evidence from the Cole Inquiry was not in a form that could be relied upon in Court.
Commissioner Cole had not found wrong-doing on the part of Lindberg.
The evidence that ASIC had properly employed its limited resources to launch the first proceeding before it was statute barred.
The Court of Appeal found that ASIC officer Brendan Caridi’s evidence as to ASIC’s conduct leading up to the filing of the first proceeding was clear cogent and consistent and in no respect misleading. The court also found that ASIC’s setting of priorities in the investigation was entirely appropriate and it would have been quite improper for ASIC to have included the matters the subject of the second proceeding in its December 2007 pleading.
The trial of ASIC’s first case against Lindberg—which has been adjourned pending the appeal outcome—concerns allegations that Lindberg contravened sections of the Corporations Act arising from AWB entering into contracts for the supply of wheat to Iraq.
ASIC commenced civil penalty proceedings in the Supreme Court of Victoria against six former directors and officers of AWB in December 2007.
The matter will return for a directions hearing before Justice Robson on 24 February 2010.
ASIC said today it will not be commenting further on this matter.