Things To Think About

How do you solve a problem like the phoenix?  The University of Melbourne’s final report on Regulating Fraudulent Phoenix Activity was published this fortnight; recommendations include a licensing framework for directors and free company searches available for all.  Are you convinced the proposals would work?  (Hat tip to Matt Peckham for this interview with the lead researcher.) Not sure what all the fuss is about?  Revisit ACCC v Harrison & ors [2016] FCA 1543 to see how this type of conduct frustrates the efforts of regulators (in that case, the TI Ombudsman and ACMA).  And some laws designed to protect members of the community – for example, statutory guarantees under the Australian Consumer Law – assume and depend upon the continuation of a corporation’s business for efficacy.

A couple of pieces made me think about the human complexion of corporate disclosure this fortnight.  In his speculative piece touching on the Fox subpoenas, Professor Langevoort explores the difficulties US lawyers (particularly in-house counsel) face when advising a company whether an internal scandal requires disclosure to the market; here at home, QBE announced a 20% reduction in the 2016 short-term incentive for its Group CEO, owing to his “personal decisions” considered “inconsistent with the board’s expectations” (speculated to be non-disclosure of a personal relationship with another employee).  Mr Neal’s comments to the Financial Times highlight the emotional and practical difficulties faced by employees trying to determine which matters are truly private.

Notable Litigation Actions

It’s not too often you see an appeal against acquittal, let alone a successful one.  Hats off to SA EPA for giving it a go: Wood v Adelaide Resource Recovery Pty Ltd [2017] SASCFC 13.  (I must admit, I thought the right to appeal an acquittal in SA was granted only to the DPP (see: s352 Criminal Law Consolidation Act 1935 (SA)).  If anyone knows the legislative basis for the SA EPA’s power, please let me know.)

Meanwhile, Yahoo!7 was sentenced for its sub judice contempt.  Justice John Dixon noted the company’s failure to produce evidence of its, or its holding companies’, financial standing, yet determined that $300,000 would represent “a real and substantial financial imposition” on it.  It’s difficult not to conclude that this was guesswork.  The current inability of the DPP to insist upon corporate offenders adducing evidence of financial status, for the purposes of a plea hearing, is a practical problem putting sentencing courts in an unenviable position.  Also note the court’s criticism of Yahoo!7 for not leading evidence from a representative of the board during the plea, and its rejection of the company’s statements of contrition.  The Queen v Johnson and Yahoo!7 Pty Ltd [2017] VSC 45.

The prosecution of Downer EDI for WHS offences continues to provide interesting rulings.  The Victorian Court of Appeal has now published its reasons for rejecting the accused’s application for review of the trial judge’s decision not to certify for an interlocutory appeal.  While this judgment concerns particulars and drafting, it doesn’t add anything new to the jurisprudence on those matters.  I note the decision here because it addresses the much more interesting matter of defence counsel’s obligation to object to the form of a charge or particulars well in advance of trial; the court admonished defence counsel for their submission that

“they had no obligation to raise questions of this kind before trial.  Indeed, according to the submission, it would have been inconsistent with their duty to their client for them to have done so, as this would have enabled the prosecution to correct the defects identified  (if such they were) and hence rectify a flawed case.”  [35]

Unfortunately, the court did not explain what the consequence of such behaviour would be for an accused.  It’s hard not to conclude, after a survey of Victorian jurisprudence in particular, that the only consequence  for the accused would be the one intended.   Downer EDI Works Pty Ltd v The Queen [2017] VSCA 27.

Curious about the state of knowledge a person must have to be considered an accessory to a contravention of s727 of the Corporations Act 2001 (Cth)? Then set aside half an hour to digest Gore v ASIC [2017] FCAFC 13.

Melbournians will be interested to see that the VBA and Melbourne City Council filed charges in the Corkman Pub matter this fortnight, against the corporate developer and two of its officers.

Law & Policy Updates

The ACCC has announced its priorities for 2017: “misleading and deceptive practices, anti-competitive conduct and unfair contract terms affecting small businesses.”  Allens has prepared a snapshot.

ASIC published Report 512 ASIC regulation of corporate finance: July to December 2016 (REP 512), which “provides statistical data, highlights key focus areas, and includes relevant guidance about ASIC’s regulation“.

Remember Anthony Cook v The Queen [2016] VSCA 231?  In that case, the VSCA said jurors must parade before the accused in the dock.  It’s caused a number of conviction appeals; the Victorian Government has introduced The Jury Directions and Other Acts Amendment Bill 2017 to “clarify that jury parades are not an essential part of the jury empanelment process“.

Overseas, the Government of Canada has supported all the recommendations of the Standing Committee on Finance regarding tax evasion.

Event Calendar

20-21 March 2017: ASIC Annual Forum (Sydney)

20-21 July 2017: Competition Matters 2017 (Wellington)

27-28 July 2017: ACCC & AER Regulatory Conference (Brisbane)

Submissions Open

Inquiry into consumer protection in the banking, insurance and financial sector (submissions close 7 March 2017) Senate Standing Committee on Economics

ASIC consultation paper proposing to consolidate and clarify Australia’s market integrity rules (submissions close 7 March 2017) ASIC

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