ASIC v Vines penalty reduced on appeal

In Geoffrey William Vines v Australian Securities & Investments Commission [2007] NSWCA 75, the New South Wales Court of Appeal partially allowed Vines' appeal against findings that he had breached his duty to act with reasonable care and diligence on certain occasions during the course of AMP's 1998–99 takeover bid for GIO Australia.

ASIC has announced that the New South Wales Court of Appeal has ordered that Geoffrey William Vines, a former Chief Financial Officer of GIO Australia Holdings Ltd (GIO), pay a pecuniary penalty of $50,000 for his conduct during the takeover bid. This penalty replaces the order made in 2006 by Justice Austin of the Supreme Court of New South Wales that Mr Vines be disqualified from managing a corporation for three years and pay a $100,000 pecuniary penalty.

The Court of Appeal also held that Mr Vines was a fit and proper person to manage a corporation and therefore, under the law that applied at the time, it declined to disqualify him and set aside Justice Austin’s disqualification order.

Section 1317EA of the Corporations Law, which dealt with the disqualification of directors at the time of Mr Vines’ conduct, was repealed with effect from 13 March 2000 and replaced by section 206C of the Corporations Act. The difference between the two provisions is that under the old law the court could not disqualify a person they considered fit and proper to manage a corporation. Under the new law the test is broader and the court can disqualify a person if they are satisfied that the disqualification is justified.

ASIC was ordered to pay Mr Vines’ costs of the appeal.