James Hardie judgement highlights strength of judicial system
- Date:17 Dec 2010
- Type:Media & Communications: Media Release
Today’s decision by the NSW Court of Appeal overturning previous findings that seven former James Hardie Industries Limited directors had breached their duties highlights the strength of Australia’s legal system and the value of having an independent judiciary and system of appeals.
On our initial reading of the judgement, the appeal has been decided on the particular facts of the case and on a matter of procedural fairness relating to the failure by ASIC to call a witness with relevant knowledge. As such, the case appears to represent an application of existing law rather than new law in the area of directors’ duties and responsibilities.
It is also important to note that the case essentially related to a matter of market disclosure rather than to whether James Hardie Industries or its directors had acted incorrectly in establishing the Medical Research and Compensation Foundation or in its funding.
“The outcome underlines the importance for directors of an appellant system of the highest standard, which the Australian Institute of Company Directors believes should apply across all areas of the law relating to directors, including areas like Occupational Health and Safety legislation where robust rights of appeal are not as readily available,” said John Colvin, Chief Executive Officer of the Australian Institute of Company Directors.
The result of the appeal also highlights the importance of applying proper procedures in regulatory proceedings, including the presentation and use of evidence.
The Australian Institute of Company Directors does not comment on the circumstances of individual directors or companies and so will not be commenting today on the specific details of the case or the appeal decision or on the circumstances of the individual directors involved.
However, the case is a reminder that all directors and boards have a responsibility to be diligent in their decision-making and highlights the risks involved. It also again puts the spotlight on continuous disclosure as a potentially extremely difficult area for listed companies and their boards.
Steve Burrell, General Manager Communications and Public Affairs
(02) 8248 6627 or 0407 708 485
Michelle Wood, Media and Government Relations Advisor
(02) 8248 6786 or 0466 655 115
The Australian Institute of Company Directors provides education, information and advocacy for company directors Australia wide, with offices in each state to cater for 28,000 members. Our members work in diverse corporations such as small-to-medium enterprises, the ASX200 corporations, public sector organisations, not-for-profit companies, large private companies and smaller private family concerns.