We're still going with the James Hardie saga, and the illfated board meeting of 15 February 2001 at which they decided to shift their asbestos compensation fund to the Netherlands and dud their asbestosis victims.
Now the High Court has weighed in and reinstated the right outcome – the James Hardie directors breached their duties when they approved an ASX release about the restructure which was materially misleading to the market.
Unanimously, and quite grumpily, the Court overturned the NSW Court of Appeal's finding that ASIC had not proved that the directors did approve the ASX release at their board meeting – notwithstanding that the minutes of the meeting expressly said that they had done so, and that nobody who was at the meeting was able to remember what happened. That is, the only direct evidence was the minutes, and yet the Court of Appeal decided they were wrong. The High Court said that's just silly.
In terms of important legal points to come out of this, that's pretty much it. The High Court has re-established what we've all always understood, which is that a contemporaneous written record of a meeting, particularly something official like minutes, is evidence of the truth of what it says, and will trump other evidence which is really just inference.
For companies, it's a simple truth that whoever drafts the minutes is king, and directors would always be well advised to actually read the draft minutes before they blithely approve them at their next meeting. They will be forever stuck with whatever the minutes say.
Meanwhile, the James Hardie directors now go back to the Court of Appeal to find out what their punishment will be. Way back at the first trial, the judge slotted them with big penalties and disqualifications. That's probably what they're still looking at.
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