Most people are aware from reports in the press and media about the large law suits that have been making their way through the NSW courts over the past few years, brought by ASIC against the former directors of James Hardie Industries Ltd. Broadly, ASIC have argued the directors contravened a number of provisions of the Corporations Law/Act (both were engaged) when they approved a draft ASX announcement at the now infamous board meeting held on 15 February 2001. The ASX announcement included a claim that under a proposed corporate restructuring, aimed at quarantining asbestos claims against members of the James Hardie group into one entity, the new entity would be “fully funded” to meet present or future asbestos claims.
Much of the contest centered around whether the minutes of that board meeting were accurate – was the draft ASX announcement in fact tabled and did the board in fact resolve to approve it.
At first instance in the NSW Supreme Court, in a 351 page judgment handed down in April 2009, Gzell J held for the most part in ASIC’s favour. You can read his Honour’s judgment here. At paragraph  his Honour makes a remark which could be seen as largely summing up his view of the evidence lead by the defendants, when he says: “…I reject the chorus of non-recollection from the non-executive directors who gave evidence…”.
On appeal, in a judgment almost as long, Spigelman CJ, Beazley and Giles JJA of the NSW Court of Appeal in a unanimous judgment handed down in December 2010 largely overturned the judgment at first instance and found for the directors. You can read their Honours’ judgment here.
The High Court heard ASIC’s appeal two weeks ago, on 25, 26 and 27 October 2011 (you can read the transcript here (25 October), here (26 October) and here (27 October). There was interesting debate between the bench and counsel as to the evidentiary value to be accorded minutes kept as official records of meetings, even where they do not strictly qualify for the statutory presumption as to constituting prima facie evidence or conclusive evidence subject to proof to the contrary.
Their Honours were robust in their questioning of counsel particularly, so the transcript shows, of counsel for the directors. A betting man might place his money on a win for ASIC when the High Court hands down their judgment, which is unlikely to be until some time next year. Watch this space for further developments.