Forge v Australian Securities and Investments Commission

The appeal in *Forge v Australian Securities and Investments Commission* concerned declarations of contravention of the *Corporations Law*, disqualification orders, and pecuniary penalties. The Australian Securities and Investments Commission (ASIC) alleged breaches of directors' duties and related party transaction provisions. The appeal was heard by Handley, Santow, and McColl JJA.

The central legal issues before the Court of Appeal included whether proceedings validly continued under the *Corporations Act 2001* (Cth) after their commencement under the *Corporations Law*, whether the fourth appellant qualified as an "officer" under s 232 of the *Corporations Law*, and whether the primary judge erred in finding contraventions of ss 232(2), (4), and (6) and s 243ZE of the *Corporations Law*. Further questions arose regarding the applicable test for "honestly" in s 232(2), the effectiveness of purported shareholder ratification of contraventions, and whether a separate hearing on penalty was appropriate in civil penalty proceedings. The admissibility of expert evidence on ultimate legal issues was also considered.

The Court of Appeal dismissed the appeal, save for one ground, and remitted the matter to the Equity Division for a hearing solely on the issue of penalty. The appellants were ordered to bear three-quarters of the costs of the appeal, and the primary judge's order regarding ASIC's costs of the proceedings below was upheld.