12-244MR Decision in High Court appeal by Fortescue Metals Group and Andrew Forrest
Tuesday 2 October 2012
The High Court of Australia today upheld the appeals of Fortescue Metals Group Ltd and its Chairman and former CEO Andrew Forrest against the unanimous decision of the Full Court of the Federal Court of 18 February 2011.
‘ASIC brought the case because it raised issues of integrity of the capital markets. Compliance with continuous disclosure goes to the heart of ASIC’s strategic priority of fair and efficient financial markets. Observation of our continuous disclosure laws is essential, not only for investors but for the broader capital markets,’ ASIC Deputy Chairman Belinda Gibson said.
The High Court considered that the central question in the case was whether the statements made by Fortescue to the ASX and in various media releases were misleading or deceptive.
On the facts and evidence in this particular case, the statements made by Fortescue were found not to be misleading or deceptive to investors. They were considered to be an accurate general description of the agreement that had been made. As a result, the High Court also found that Fortescue did not contravene the continuous disclosure requirements of the Corporations Act 2001 (Corporations Act). The Court did not consider it necessary to discuss the requirements of the continuous disclosure provisions of the Corporations Act in any detail.
Ms Gibson said ASIC would review the judgment and its implications further.
‘We will now assess what impact the High Court’s decision has on disclosure requirements. The judgement does raise for discussion what the market would regard as a sufficient statement about the nature and content of an agreement, and what is necessary to ensure the market is properly informed for the purposes of making investment decisions,’ Ms Gibson said.
‘That is something we will be carefully considering, in conjunction with the ASX.’
On 29 September 2011 (refer: 11-214MR) the High Court of Australia granted special leave for Fortescue and Andrew Forrest to appeal against the Full Federal Court of Australia’s decision of 18 February 2011.