 to “the parties” I am, of course, referring to ASIC and the first defendant only.
35 First, on the basis of the agreed facts, and the first defendant’s admission, I am satisfied that the first defendant contravened s 674(2) of the Act. Thus, as the parties submit, and as I have noted, a declaration of contravention under s 1317E(1) must be made. The form of the proposed declaration conforms to the requirements of s 1317E(2) of the Act, as it existed at the time of the contravention. This declaration is otherwise in an appropriate form.
36 Secondly, the first defendant’s contravention was serious: s 1317G(1A)(c)(iii). Whether a contravention is “serious” is a question of fact: Australian Securities and Investments Commission v Newcrest Mining Ltd [2014] FCA 698; 101 ACSR 46 (Newcrest) at [57]; Australian Securities and Investments Commission v Hochtief Aktiengesellschaft [2016] FCA 1489; 117 ACSR 589 at [98].
37 Here, the Orebody Report, which was the basis for the first defendant’s awareness of the orebody information, was provided to its executive officers, including the second defendant and the third defendant; its contravention occurred over a period of time (almost a month); and, during the period in which it was required, but failed, to notify the ASX of the orebody information, approximately 31.06 million of its shares (with a total value of approximately AU$2.063 billion) were traded on the ASX.
38 Further, and in any event, the first defendant admits that its contravention was serious within the meaning of s 1317G(1A)(c)(iii). In Newcrest at [57], Middleton J accepted an admission for that purpose.
40 Of course, the Court is not bound by the parties’ proposal as to the amount of the penalty. However, the question for the Court is whether the proposal fixes an appropriate amount. As fixing the amount of a civil penalty is not an exact science, there is a permissible range in which it cannot be said that one amount is, necessarily, more appropriate that another amount for the penalty. Therefore, the Court will not depart from a proposed amount (assuming it to be appropriate) merely because it might have been disposed to impose another, appropriate amount. Further, in these matters, the Court can expect that the relevant regulator (here, ASIC) will be in a position to offer informed submissions as to the effects of the contravention in question, and the level of penalty necessary to achieve statutory compliance: Commonwealth v FWBII at [47] – [48] and [60].
41 Fourthly, the purpose of a civil penalty is primarily, if not wholly, protective in promoting the public interest in statutory compliance. Unlike criminal proceedings, notions of retribution and rehabilitation do not have a role: Commonwealth v FWBII at [55]; Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113, 254 FCR 68 (ABCC v CFMEU) at [98]. The object of a pecuniary penalty is to put a price on contravention that is sufficiently high to deter the contravenor (specific deterrence) and others who might be tempted to contravene (general deterrence): see ABCC v CFMEU at [98].
42 Fifthly, the penalties that have been proposed in other cases can provide guidance to the Court. However, that guidance should not be deployed mechanically in the sense of working backwards or forwards from other more or less serious cases. All the circumstances of the given case must be evaluated: Flight Centre Ltd v Australian Competition and Consumer Commission (No 2) [2018] FCAFC 53; 260 FCR 68 at [69]; Australian Competition and Consumer Commission v Universal Music Australia Pty Ltd (No 2) [2002] FCA 192; 201 ALR 618 at [34]. In the present case, I have been provided with a summary of prior cases where pecuniary penalties were imposed for contraventions of continuous disclosure obligations.
1. The extent to which the information not disclosed would have been expected to and (if applicable) did affect the price of the contravening company’s shares (s 674(2)(c)).
2. The extent to which the information, if not generally available, would have been discoverable upon inquiry by a third party (s 676(2)).
3. The extent (if any) to which acquirers or disposers of the company’s shares were materially prejudiced by the non-disclosure (s 1317G(1A)).
4. The extent to which (if at all) the contravention was the result of deliberate or reckless conduct by the corporation.
5. The extent to which the contravention was the result of negligent conduct by the corporation.
6. The period of time over which the contravention occurred.
7. The existence, within the corporation, of compliance systems in relation to its disclosure obligations including provisions for and evidence of education and internal enforcement of such systems.
8. Remedial and disciplinary steps taken after the contravention and directed to putting in place a compliance system or improving existing systems and disciplining officers responsible for the contravention.
9. The seniority of officers responsible for the non-disclosure and whether they included directors of the company.
10. Whether the directors of the corporation were aware of the facts which ought to have been disclosed and, if not, what processes were in place at the time, or put in place after the contravention to ensure their awareness of such facts in the future.
11. Any change in the composition of the board or senior managers since the contravention.
12. The degree of the corporation’s cooperation with the regulator including any admission of contravention.
13. The prevalence of the particular class of non-disclosure in the wider corporate community.
44 There are other factors that are also relevant to the imposition of penalty, such as the size and financial position of the contravening company, and whether the company has been found to have engaged in similar conduct in the past: ABCC v CFMEU at [104].
45 In the Joint Submissions, the parties addressed a number of these factors with reference to the Statement of Agreed Facts and Admissions, which, they say, support the conclusion that the proposed penalty of $750,000 is an appropriate penalty in all the circumstances.
46 With respect to the considerations that point towards the need for a penalty of a significant size, relative to the statutory maximum of $1 million, the parties referred to the first defendant’s standing as a mining and metals company, and the RT Group’s market capitalisation ([11] and [13] above; see also [12]); the fact that the contravention occurred over a period of almost one month, at which time a substantial number of the first defendant’s shares were traded on the market ([24] – [26] above); and the fact that the Orebody Report (and, hence, the orebody information) was received by executive officers within the first defendant ([20] above).
47 The parties also point to a number of mitigating factors. ASIC accepts that the contravention was not deliberate or reckless; that the contravention did not arise out of a failure to exercise due care and skill; and that no officer or employee of the first defendant knowingly, wilfully, fraudulently, or dishonestly contravened any legal obligation under statute or the general law.
48 The agreed facts record that, in the period 21 December 2021 to 17 January 2013, the first defendant assessed the implications of the orebody information. As I have noted, the parties agree that the assessment was undertaken carefully. It consisted of a review of the value of the RTCM coal projects and a reassessment of the business direction of those projects. However, in undertaking its review, the first defendant did not appreciate that it was necessary to notify the ASX of the orebody information, even though it had in place processes designed to ensure that it complied with its continuous disclosure obligations.
49 In this regard, the RT Group had implemented continuous disclosure standards as part of its corporate governance standards. These standards were overseen by a Continuous Disclosure Committee, which functioned as an independent management committee. It was responsible for determining whether information relating to the first defendant required disclosure. The standards required the first defendant to make immediate disclosure to listing authorities of any information that a reasonable person would expect to have a material effect on the price or value of the first defendant’s securities, in accordance with the RT Group’s rules.
50 In the course of oral submissions, I asked how, given these processes, the contravention occurred? Were the first respondent’s compliance processes adequate or inadequate?
51 Leading counsel for ASIC, Mr Darke SC, submitted that the apparent failure of these processes, on this occasion, did not mean that, necessarily, they were inadequate. Mr Darke submitted that, given the processes described in the Statement of Agreed Facts and Admissions, it can be said that the first defendant took its compliance obligations seriously and that the contravention was the result of inadvertent error.
52 Leading counsel for the first defendant, Mr Young QC, supported this characterisation. He emphasised the agreed fact that the first defendant’s assessment of the orebody information was carefully undertaken. He submitted that the receipt and consideration of the Orebody Report overlapped the Christmas and New Year period. He referred to the report as a “fairly technical document” concerning “very recent