Australian High Court upholds appeals by Fortescue against ASIC
03 Oct 2012
The High Court of Australia yesterday upheld the appeals by Andrew Forrest and Fortescue Metals Group against the Full Federal Court's decision favouring the Australian Securities and Investments Commission (ASIC).
The case centred around statements by Fortescue to the market in 2004 of having contracted the building of components of its Pilbara iron ore project to Chinese state-owned enterprises.
According to ASIC, Fortescue had breached the misleading or deceptive provisions (section 1041H) and continuous disclosure (section 674), and that Forrest had failed to discharge his statutory directors' duty of care and diligence (section 180).
The case boiled down to the message communicated when Fortescue said it had a "binding contract", and whether the communication was misleading or deceptive.
At first instance, ASIC's case focused on whether Fortescue had made dishonest claims about the market and whether it had a genuine and / or reasonable basis for making the statements.
It was held that all that Fortescue had done was to make statements to the effect that it was of the opinion that it had binding contracts and since it held that opinion honestly, there had been no breach.
