The court based its order on a prospect of inconsistent findings
Australia’s Federal Court agreed to hear the Australian Securities and Investments Commission’s case against a mining corporation separately from and subsequently to ASIC’s case against a director and a senior manager on liability for alleged contraventions of the Corporations Act 2001 (Cth).
In June 2022, Wiluna Mining Corporation Limited – the plaintiff in Australian Securities and Investments Commission v Wiluna Mining Corporation Ltd [2026] FCA 824 – announced to the market the outcome of a capital raising by prospectus.
ASIC requested declarations of contravention and costs against Wiluna. ASIC alleged that:
As against a director and a senior manager of Wiluna at the time, ASIC sought declarations of contravention, an order to pay a pecuniary penalty, an order disqualifying them from managing a corporation for a period, and costs.
ASIC asserted that the director, the second defendant:
Specifically, ASIC argued that the director allowed the announcement’s release, failed to take reasonable steps to ensure that the announcement was not false or misleading, and failed to make Wiluna qualify or correct the announcement or otherwise disclose the omitted information.
ASIC then claimed that the senior manager, the third defendant, contravened s 1309 by:
Wiluna did not challenge ASIC’s case against it and issued formal admissions to that effect. Wiluna asked the court to determine the case against it separately and before the final hearing of the case against the director and the senior manager.
ASIC agreed that the court could proceed as Wiluna proposed.
Regarding key aspects of ASIC’s case, the director invoked the privilege against exposure to a civil penalty, also known as penalty privilege. The director asked the court to hear the case against Wiluna separately from and after its liability case against the director and the senior manager.
The senior manager said he would abide by the result of the proceedings.
Wiluna entered an administration process. The administrators of the deed of company arrangement recommended a capital raising, the payment of an amount into a trust account for creditors, and Wiluna’s relisting.
The Federal Court of Australia ordered that it would hear the plaintiff’s case against the first defendant separately from and subsequently to the case against the other two defendants regarding liability for the claimed breaches of the Corporations Act.
After determining whether the director and the senior manager had contravened the Corporations Act as alleged, the court would allow any party to request the listing of the proceedings for case management.
First, the court decided that the director’s defence would require him to convince the court to issue findings inconsistent with the potential findings supporting the declaratory relief against Wiluna.
According to the court, if it made the declarations ASIC sought against Wiluna at this stage, then the director’s present defence would include at least a denial of matters that would have served as a basis for issuing declaratory orders against Wiluna.
Next, the court held that the fact that ASIC presently sought no penalty against Wiluna did not significantly favour the director’s requested orders. The court reiterated that the potential inconsistency was the significant factor.
Third, the court found that the issue of apprehended bias would seemingly only arise if inconsistent findings were possible because the issue would be an additional reason why a potential inconsistency in findings would favour the director’s requested approach.
However, if the court had seen no possible inconsistency, it would have found no apprehension of bias if the same judge would have issued a declaration of contravention against one defendant and then addressed the rest of the case against the remaining defendants.
