Australian Securities and Investments Commission v MacDonald (No 12)

The Australian Securities and Investments Commission (ASIC) brought proceedings against MacDonald in the Federal Court of Australia, alleging breaches of civil penalty and other provisions under the Corporations Act. The primary dispute centred on whether MacDonald should be relieved from liability under sections 1317S(2) and 1318(1) of the Act. The Court was also required to determine whether MacDonald acted honestly and if prohibition orders should be made under sections 206C or 206E. Additionally, ASIC sought pecuniary penalty orders under sections 1317G(1) and 1317G(1A) of the Act. The Court had to consider whether separate issues constituted a group of discrete issues, and if so, whether an order for costs should be made when the plaintiff succeeds on one separate issue and fails on another.

The Court examined the conduct of MacDonald in detail, assessing the honesty and reasonableness of his actions. It was determined that MacDonald's actions did not meet the threshold for relief under sections 1317S(2) and 1318(1) of the Act. The Court found that MacDonald had not acted honestly and therefore was not entitled to relief from liability. In assessing the appropriateness of prohibition orders, the Court found that MacDonald's conduct warranted such orders under sections 206C and 206E of the Act. Regarding pecuniary penalties, the Court held that MacDonald should be subject to penalty orders under sections 1317G(1) and 1317G(1A) due to the seriousness of the breaches. The Court also ruled on the costs issue, determining that separate issues did constitute a group of discrete issues and that costs should not be awarded where the plaintiff succeeds on one separate issue and fails on another.

The Court made several orders, including prohibition orders against MacDonald under sections 206C and 206E of the Corporations Act. MacDonald was also subject to pecuniary penalty orders under sections 1317G(1) and 1317G(1A). The Court declined to make an order for costs as the plaintiff only succeeded on one separate issue. These decisions underscore the importance of honesty and reasonableness in corporate conduct and the Court's approach to relief, prohibition orders, penalties, and costs in civil penalty proceedings.