ASIC v Sydney Investment House Equities Pty Ltd

Reported Decision : 253 ALR 616 69 ACSR 648

CITATION : ASIC v Sydney Investment House Equities Pty Ltd [2009] NSWSC 144

DECISION : Third defendant disqualified from managing corporations for 25 years and ordered to pay 90 per cent of ASIC's costs of the proceedings

CATCHWORDS : CORPORATIONS [1286] - Management and administration - Duties and liabilities of officers of corporation - Disqualification from management of corporations - By court order - Relevant principles.

Corporations Act 2001 (Cth) s 206C Supreme Court Act 1970 s 76 LEGISLATION CITED : Civil Procedure Act 2005 s 98 Uniform Civil Procedure Rules 2005 r 42.1 Supreme Court Rules 1970 Part 52A r 11

ASIC v Sydney Investment House Equities Pty Ltd [2007] NSWSC 1456 ASIC v Sydney Investment House Equities Pty Ltd [2008] NSWSC 1224 Australian Securities and Investments Commission v Australian Investors Forum Pty Ltd (No 3) (2005) 56 ACSR 204 Australian Securities and Investments Commission v Hutchings (2001) 38 ACSR 387 Australian Securities and Investments Commission v Parkes (2001) 38 ACSR 355 Australian Securities and Investments Commission v Pegasus Leveraged Options Group Pty Ltd (2002) 41 ACSR 561 Australian Securities and Investments Commission v White (2006) 58 ACSR 261 Domino Hire Pty Ltd v Pioneer Park Pty Ltd (In Liq) [2000] NSWSC 313 CASES CITED : Hughes v Western Australian Cricket Association (Inc) (1986) ATPR 40-748 Lewis v Nortex Pty Ltd (In Liq) [2006] NSWSC 480 Maguire v Makaronis (1997) 188 CLR 449 Platcher v Joseph (2003) 44 ACSR 277 Re HIH Insurance Ltd (in prov liq); Australian Securities and Investments Commission v Adler (2002) 42 ACSR 80 Re One.Tel Ltd (in liq); Australian Securities and Investments Commission v Rich (2003) 44 ACSR 682 Rich v Australian Securities and Investments Commission (2004) 220 CLR 129 Ronnoc Finance Ltd v Spectrum Network Systems Ltd NSWSC 19 November 1997 unreported Waters v P C Henderson (Australia) Pty Ltd NSWCA 6 July 1994 unreported

Australian Securities and Investments Commission (P) Sydney Investment House Equities Pty Ltd (D1) Sydney Investment House Capital Ltd (D2) Edwin James Goulding (D3) Stephen Geagea (D4) PARTIES : Sydney Investment House Pty Ltd (D5) Sydney Investment House (Newcastle) Pty Ltd (D6) Sydney Investment House (Beaconsfield) Pty Ltd (D7) Melbourne Investment House Pty Ltd (D8) Melbourne Investment House (Hawthorn) Pty Ltd (D9) Melbourne Investment House (Collingwood) Pty Ltd (D10)

COUNSEL : A J McInerney (P) No appearance - written submissions received (D3)

SOLICITORS : Kim Turner, Solicitor (P) In Person (D3)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

2941/06 AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION v SYDNEY INVESTMENT HOUSE EQUITIES PTY LTD & ORS JUDGMENT 1 HIS HONOUR: In this matter I delivered my substantive judgment on 21 November 2008: ASIC v Sydney Investment House Equities Pty Ltd [2008] NSWSC 1224 ("my judgment"). I amended my judgment on 28 November 2008 and again on 4 March 2009. I made orders in accordance with my judgment on 28 November 2008 and amended one of those orders on 4 March 2009. My judgment of 21 November 2008 as amended on 28 November 2008 and 4 March 2009 is referred to as "my judgment". 2 In my judgment I found that the third defendant ("Mr Goulding") had committed extensive breaches of his duties as a director, although I rejected other claims by the plaintiff ("ASIC") that he had committed breaches. In addition, ASIC during the trial or during final submissions abandoned some claims it had originally made in the proceedings. The findings that ASIC in the end sought are set out in [505] - [514] of my judgment and the findings that I made are set out in [517] - [534] of my judgment. 3 The breaches that I found and the reasons for which I made the findings are addressed in detail in my judgment. I do not propose to repeat those matters in extenso in this judgment, which should be read together with my judgment. The breaches concerned the contribution of moneys by investors to Equities and Capital respectively and subsequent dealings with those moneys. The moneys were contributed on terms set out in documents issued to the prospective investors, respectively, the Equities Information Memorandum and the Capital Prospectus ("the documents"). 4 The breaches that I found to have been committed by Mr Goulding covered a wide range of seriousness. One was as trifling as failing to cause each of Equities and Capital to lodge one report with ASIC, although I refused to find that in doing so Mr Goulding had any motive of concealment, as ASIC had submitted. 5 ASIC does not in these proceedings seek the imposition of a penalty on Mr Goulding. Nor does it seek compensation. A late attempt to amend to seek compensation was refused by me on 6 December 2007: ASIC v Sydney Investment House Equities Pty Ltd [2007] NSWSC 1456. ASIC does however seek Mr Goulding's disqualification from managing corporations. It submits that the appropriate period of disqualification in the circumstances of this case is between 25 years and life. The provision under which the disqualification is sought is s 206C of the Corporations Act 2001 (Cth) ("the CA"), which provides as follows: " 206C Court power of disqualification - contravention of civil penalty provision (1) On application by ASIC, the Court may disqualify a person from managing corporations for a period that the Court considers appropriate if: (a) a declaration is made under section 1317E (civil penalty provision) that the person has contravened a civil penalty provision; and (b) the Court is satisfied that the disqualification is justified. Note: The civil penalty provisions are subsection 180(1) and (2), 181(1) and (2), 182(1) and (2), 183(1) and (2), 209(2), 254L(2), 256D(3), 259F(2), 260D(2) or 344(1) or section 588G. (2) In determining whether the disqualification is justified, the Court may have regard to: (a) the person's conduct in relation to the management, business or property of any corporation; and (b) any other matters that the Court considers appropriate."

ASIC had earlier sought injunctive relief under s 1101B of the CA, but did not ultimately pursue that claim. 6 The law as to the manner in which the disqualification provisions are to be applied has been the subject of discussion in a number of cases. In Rich v Australian Securities and Investments Commission (2004) 220 CLR 129 McHugh J said at [47]: "Many and varied are the contraventions of the Corporations Act that give rise to applications for the disqualification of a person from managing corporations. Those contraventions are the grounds for the exercise of the court's discretion to order disqualification. The nature and seriousness of the contraventions are important matters to which the courts have regard when determining whether to order disqualification. Contraventions under the Corporations Act and its predecessor legislation that have been found to enliven the court's discretion include breaches of directorial duties of honesty, good faith and due care and diligence (103), making improper use of the position of director to gain an advantage for that person or for others to the detriment of the company (104), making inappropriate use of company funds (105), engaging in misleading and deceptive conduct (106), permitting corporations to trade while insolvent (107), operating unregistered schemes unlawfully or carrying on a business such as a securities business or an investment advice business without a licence (108) and failing to comply with administration obligations (109). In substance, the nature of these contraventions is little different from those which attract the sanctions of the criminal law." (Citations omitted, emphasis in original) 7 In Re HIH Insurance Ltd (in prov liq); Australian Securities and Investments Commission v Adler (2002) 42 ACSR 80 at [56] Santow J set out what his Honour identified as the guiding principles or relevant factors relating to disqualification. In Rich McHugh J stated those 15 propositions as follows at [49]: "The fifteen propositions formulated by Santow J are as follows ( Adler (2002) 42 ACSR 80 at 97-99):

1 Disqualification orders are designed to protect the public from the harmful use of the corporate structure or from use that is contrary to proper commercial standards. 2 The banning order is designed to protect the public by seeking to safeguard the public interest in the transparency and accountability of companies and in the suitability of directors to hold office. 3 Protection of the public also envisages protection of individuals who deal with companies, including consumers, creditors, shareholders and investors. 4 The banning order is protective against present and future misuse of the corporate structure. 5 The order has a motive of personal deterrence, though it is not punitive. 6 General deterrence is an object of the legislation. 7 In assessing the fitness of an individual to manage a company, it is necessary that the individual have an understanding of the proper role of the company director and the duty of due diligence that is owed to the company. 8 Longer periods of disqualification are reserved for cases where contraventions have been of a serious nature such as those involving dishonesty. 9 In assessing an appropriate length of prohibition, consideration is given to the degree of seriousness of the contraventions, the propensity of the defendant to engage in similar conduct in the future and the likely harm that may be caused to the public. 10 It is necessary to balance the personal hardship to the defendant against the public interest and the need for protection of the public from any repeat of the defendant's conduct. 11 A mitigating factor in considering a period of disqualification is the likelihood of the defendant reforming. 12 The eight criteria to govern the exercise of the court's powers of disqualification set out in Commissioner for Corporate Affairs (WA) v Ekamper (1987) 12 ACLR 519 have been influential. It was held that in making such an order it is necessary to assess: (a) the character of the defendant; (b) the nature of the breaches; (c) the structure of the company or companies and the nature of its or their business; (d) the interests of shareholders, creditors and employees; (e) the risks to others from the continuation of the defendant as a director; (f) the honesty and competence of the defendant; (g) hardship to the defendant and to his or her personal and commercial interests; and (h) the defendant's appreciation that future breaches could result in future proceedings. 13 Factors that have led to the imposition of the longest periods of disqualification (that is, disqualifications of twenty-five years or more) include: (a) large financial losses; (b) high propensity that the defendant may engage in similar activities or conduct; (c) activities undertaken in fields in which there was potential to do great financial damage such as in management and financial consultancy; (d) the defendant's lack of contrition or remorse; (e) disregard for the law and compliance with corporate regulations; (f) dishonesty and intent to defraud; and (g) previous convictions and contraventions for similar activities. 14 In cases in which the period of disqualification ranged from seven years to twelve years, the factors that led to the conclusion that these cases were serious though not the 'worst cases', included: (a) serious incompetence and irresponsibility; (b) substantial loss; (c) the fact that the defendant had engaged in deliberate courses of conduct to enrich himself or herself at others' expense, but with lesser degrees of dishonesty; (d) continued, knowing and wilful contraventions of the law and disregard for legal obligations; and (e) lack of contrition or acceptance of responsibility, although that must be weighed against the prospect that the defendant may reform. 15 The factors leading to the shortest disqualifications (that is, disqualifications for up to three years) were: (a) although the defendant had personally gained from the conduct, he or she had endeavoured to repay or partially repay the amounts misappropriated; (b) the defendant had no immediate or discernible future intention to hold a position as manager of a company; and (c) the defendant had expressed remorse and contrition, acted on advice of professionals and had not contested the proceedings against him or her." 8 A useful recent summary of the law is contained in the judgment of Hargrave J in the Supreme Court of Victoria in Australian Securities and Investments Commission v White (2006) 58 ACSR 261 at [18] - [24]. His Honour summarised what had been laid down by McHugh J as follows at [18]: "The principles to be applied in determining whether a disqualification order is justified and if so, the period of disqualification, have been considered in many cases. In Rich v Australian Securities and Investments Commission (2004) 220 CLR 129 McHugh J reviewed the authorities for the purpose of determining whether an application for a disqualification order exposed the defendant officer to a penalty. In deciding that the power to make disqualification orders was not merely protective, but also involved the imposition of a penalty, McHugh J identified, by reference to the decided cases, four general categories of important matters to which courts have regard when determining whether to order disqualification and, if so, for what period:

(1) the nature and seriousness of the contraventions; (2) protection of the public; (3) retribution and deterrence; (4) mitigating factors. (at [47] - [58])" 9 Hargrave J also provided a useful conspectus of the periods of disqualification imposed in recent serious cases at [30] - [39] of his judgment. In Australian Securities and Investments Commission v Parkes (2001) 38 ACSR 355 Austin J imposed a 25 year disqualification. In Australian Securities and Investments Commission v Hutchings (2001) 38 ACSR 387 Windeyer J imposed a life disqualification, with a right to apply on 3 months notice, after 5 years for a variation of the period of the disqualification. In Australian Securities and Investments Commission v Pegasus Leveraged Options Group Pty Ltd (2002) 41 ACSR 561 Davies AJ imposed a 30 year disqualification. In Platcher v Joseph (2003) 44 ACSR 277 Stone J imposed a 25 year disqualification. In Australian Securities and Investments Commission v Australian Investors Forum Pty Ltd (No 3) (2005) 56 ACSR 204 Palmer J imposed a 25 year disqualification. And in White the disqualification that Hargrave J imposed on the principal offenders was for life. 10 As to the question of costs, by s 98 of the Civil Procedure Act 2005 the costs of proceedings are in the discretion of the Court, as they were previously under s 76 of the Supreme Court Act 1970. By r 42.1 of the Uniform Civil Procedure Rules 2005 ("the UCPR") (previously Part 52A r 11 of the Supreme Court Rules 1970) "the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs." 11 The basis upon which this discretion should be exercised was stated as follows by Toohey J in the Federal Court in Hughes v Western Australian Cricket Association (Inc) (1986) ATPR 40-748 at 48,136: "The discretion must of course be exercised judicially. There are decisions, both of Australian and English courts, that throw light on the way in which the discretion is to be exercised. I shall not refer to those decisions in any detail; I shall simply set out in a summary way what I understand to be their effect. 1 Ordinarily, costs follow the event and a successful litigant receives his costs in the absence of special circumstances justifying some other order. Ritter v Godfrey [1920] 2 KB 47. 2 Where a litigant has succeeded only upon a portion of his claim, the circumstances may make it reasonable that he bear the expense of litigating that portion upon which he has failed. Forster v Farquhar [1893] 1 QB 564. 3 A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the party's costs of them. In this sense, 'issue' does not mean a precise issue in the technical pleading sense but any disputed question of fact or of law. Cretazzo v Lombardi (1975) 13 SASR 4 at 12."

Although costs are in the discretion of the Federal Court by statute, it has no rule corresponding to UCPR r 42.1, but in my view that does not detract from the applicability of the principles. 12 In relation to the position in this Court, in Waters v P C Henderson (Australia) Pty Ltd NSWCA 6 July 1994 unreported Mahoney JA (with whom Kirby P and Priestley JA agreed), quoted with approval the following passage from Ritchie's Supreme Court Procedure: "Where the proceedings involve multiple issues the application of the rule that costs follow the event may involve hardship where a party succeeds on some issues and yet fails on others. Particularly is this so where, for example, a defendant succeeds on issues that occupy the bulk of the time taken by the proceedings. Nevertheless unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed."

Santow J considered the application of these principles in Ronnoc Finance Ltd v Spectrum Network Systems Ltd NSWSC 19 November 1997 unreported, as did I in Domino Hire Pty Ltd v Pioneer Park Pty Ltd (In Liq) [2000] NSWSC 313. And see my judgment in Lewis v Nortex Pty Ltd (In Liq) [2006] NSWSC 480 at [19] - [22]. 13 The breaches committed by Mr Goulding that I found established that were matters of considerable seriousness included:

(1) Entering into agreements to lend investors' money to persons to whom lending was not authorised or on terms which were not authorised by the documents: see my judgment [172] and [175]; and lending money to entities in which Mr Goulding was interested in breach of the conflict of interest requirements imposed on directors: see my judgment [180]. (2) Entering into 31 "rollover" transactions whereby Capital issued redeemable preference shares in return for debts owing to Equities by entities which were at the time insolvent. (3) Misappropriation of some $4.2 million contributed by investors that, on the evidence, has been lost. (4) Causing or permitting Equities to conduct an unregistered managed investment scheme. (5) Causing or permitting Equities and Capital to carry on an unauthorised financial services business. (6) Engaging in misleading or deceptive conduct by making representations in the Equities Information Memorandum concerning the manner of application of the moneys to be invested. (7) Entering into transactions with certain investors which gave benefits not available to other investors but were detrimental to Newcastle, the company whose assets were disposed of, and also entering into a transaction with Kevin Smith by which Newcastle, Melbourne and Hawthorn assumed liabilities without receiving any countervailing benefit. 14 The claims of contravention that ASIC either abandoned or that were found against it are as follows:

(1) In relation to Breach 1, the making of loans, ASIC originally complained not only of the loans made by Equities in Section A of this claim and the loans made by Capital in Section B, but also in Section C of 12 loans made by other companies in the SIH Group. Upon it being pointed out during the course of the trial that there was no pleading basis for the claim in respect of the Section C loans, ASIC withdrew it. See my judgement [15]. This claim had involved a deal of evidence concerning the entry into of those Section C loans. (2) Also in relation to Breach 1, ASIC had complained of the making of advances under the loans complained of as well as the act of entry into the Loan Agreements. That complaint was persisted with, but I found that there was no pleading basis for it and rejected the claim. See my judgment [518]. That claim also involved a deal of evidence about the making of advances. (3) Also in relation to Breach 1, I found in the case of 5 of the loans by Equities in Section A that it had not been established that the relevant companies were insolvent at the time of entry into the Loan Agreements. See my judgment [156], [166]. However, they were found to be insolvent some months later. In light of this, it cannot be said that the contest about insolvency (which was considerable) really involved any wasted effort. (4) In relation to Breach 5, while I found that Mr Goulding's conduct in causing or permitting Capital to fail to lodge certain reports constituted a breach of duty, I refused to make a finding that in doing so he had a motive of concealment: see my judgment [524]. However, the amount of additional evidence concerning this aspect was trifling. (5) In relation to Breach 6, I found that the conduct of Mr Goulding in causing or permitting Equities and Capital to breach s 911A of the CA constituted breaches of duty by Mr Goulding. However, I refused to make such a finding in relation to Mr Goulding's dealings with a Mr Winning: see my judgment [527]. Again, the amount of evidence concerning this was trifling. (6) In relation to Breach 7, I refused to make a finding that Mr Goulding had personally provided unauthorised financial services as claimed by ASIC. However, the evidence that went to Breach 7 was also the evidence that was used to establish Breach 6. (7) As to Breach 8, causing or permitting the advertisement of financial products by Equities, this claim failed because the evidence was not sufficient to establish the placement of any advertisement in any particular newspaper. In relation to radio advertisements, it was not established that they were advertisements of financial products. See my judgment [421], [529]. There was a deal of evidence concerning the advertisements. (8) In relation to Breach 9, causing or permitting Equities and Capital to engage in misleading or deceptive conduct, ASIC originally alleged about 95 separate statements said to convey misrepresentations by Equities and Capital. This was reduced to allegations concerning 13 statements in total, all contained in the documents. See my judgment [422], [530], [531]. As these were written statements, little evidence was required to prove them. There was considerable evidence in support of the abandoned statements including evidence concerning representations made orally. However, a good deal of that was also relevant to Breach 6 relating to financial services contraventions which was found to have been established. 15 Turning to the seriousness of the contraventions found to be established, in the course of argument a question arose as to the extent to which Mr Goulding's conduct should be regarded as intentionally dishonest. Put another way, was it the result of ignorance or of an utter disregard of duties that he knew he was under? There is some indication that on occasions he deliberately did what he knew was wrong. His submissions contained a litany that he had taken professional advice and had acted in accordance with it. There is virtually no evidence of him acting in accordance with what professional advice he had received, but, as noted at [270] of my judgment, in at least one regard it would appear that Mr Goulding acted deliberately in doing precisely the things that his legal advice indicated must not be done. 16 On the other hand, a great deal of the evidence and of the manner in which he conducted his case bespoke ignorance or lack of understanding of basic duties of a company director. In my judgment at [248] and [249] I spoke of a misapprehension on Mr Goulding's part that all the moneys of the SIH Group were under his control and that "if he made a contribution to one entity in the Group, then he was justified in making a drawing against some other entity in the Group". I referred also to Mr Goulding's attitude that the companies and their funds were his to dispose of as he thought fit without attention to the matters he should have considered as a director of the relevant company or the formalities he should have attended to. 17 The sums of money dealt with and lost were considerable. Mr Goulding appears to have taken some $700,000, being the total of the items ATM Withdrawals, Directors' Fees, and Directors' Loans in the table at [215] of my judgment. As to the characterisation of the third of these items see my judgment at [221]. Furthermore, he paid some $3.3 million to entities in which he was interested without any attention to his duties relating to the conflict of interests. In face of the heavy duty referred to in Maguire v Makaronis (1997) 188 CLR 449 at 465 to show the righteousness of transactions entered into by a person under fiduciary duties Mr Goulding mostly gave no evidence at all of justification and such justifications on his part as appear from the evidence or were enunciated in submissions are illusory. He expressed no contrition for his actions but restricted himself to putting forward (not on oath) illusory justifications for them. 18 In Parkes Austin J summarised his reasons for imposing a 25 year disqualification. In citing and referring to what his Honour said I do not lose sight of the fact that each matter must be determined on its own individual facts and that penalties are not, as it were, to be transferred from case to case: Re One.Tel Ltd (in liq); Australian Securities and Investments Commission v Rich (2003) 44 ACSR 682 at [26] per Bryson J; Rich at [53] per McHugh J; White at [23] per Hargrave J. However, Parkes was a case not dissimilar from the present and what his Honour said helps to highlight factors that are important in the present case. I set out what his Honour said at [181], taking the liberty of numbering his Honour's bullet points for ease of reference: "After careful consideration, I have decided that I should accede to the plaintiff's submission that a prohibition for 25 years is appropriate. In reaching this conclusion, I take into account the following factors:

[1] the contraventions that I have found include some very serious contraventions; [2] those contraventions have led to loss and damage on the part of companies and investors, contrary to the protective purpose of the relevant provisions of the Corporations Law; [3] the defendant's field of activity, management and financial consultancy, is an area where the potential to do damage is especially high, compared, say, with a defendant whose expertise is in making cement; [4] the defendant's contraventions have been recurrent, arising in the context of three different sets of companies; [5] until the end, the defendant asserted explanations for what he had done which I have found to be implausible, and this suggests to me that he has no contrition; [6] all of these facts lead me to believe that there is a high propensity that the defendant will engage in similar conduct if only a short period of the prohibition is imposed; [7] I am conscious of the fact that a prohibition for 25 years will effectively prevent the defendant from managing a corporation for the rest of his life, but it will not prevent him from earning income as an employee, using his undoubted financial skills under proper supervision." 19 The considerations mentioned in his Honour's first three points essentially apply in this case. As to the fourth point, Mr Goulding's contraventions have not arisen in the context of three different sets of companies, but they were committed over a protracted period of three or four years. As to the fifth point, so far as explanation is concerned, in general none has been given. In so far as a justification was given for Mr Goulding taking large sums of money from the companies, the justification was that he had provided services to them for which he had not otherwise been remunerated. This, of course, could not justify the unauthorised taking of money by a director. I cannot be satisfied that he has any contrition for his actions. He has made claims of contrition only in very recent written submissions. But he has not entered the witness box and given evidence of contrition that was on oath and would be subject to cross examination. Particularly in the absence of evidence, there must be the gravest doubt as to whether his understanding of a director's duties has improved. So far as the sixth point is concerned, like Austin J I have come to the conclusion that there is a high propensity that Mr Goulding will engage in similar conduct if a short period of prohibition is imposed. As to the seventh point, Mr Goulding is 47 years of age. A prohibition for 25 years, the minimum sought by ASIC, will effectively prevent Mr Goulding from managing a corporation for the rest of his life, but will not prevent him from earning income as an employee using his skills under proper supervision. 20 I have borne in mind the penalty imposed on the fourth defendant Mr Geagea, by Hammerschlag J by agreement between ASIC and Mr Geagea. The disqualification was for five years. He was also ordered to pay $60,000 towards ASIC's costs: see his Honour's reasons given on 9 May 2008. Bearing in mind that Mr Geagea was not advantaged by any moneys taken and that he acted under the influence of Mr Goulding I do not think that a disqualification of Mr Goulding for 25 years is disproportionate to the five year disqualification imposed on Mr Geagea. 21 Mr Goulding has complained in his submissions that he has been unfairly treated by ASIC and that this should be taken into account in fixing the period of disqualification. I am not able to conclude that there has been any substantial unfairness towards him and certainly not bias or a bigoted approach that "was and is an obscene abuse of power at the taxpayer expense". On the contrary, a large body of serious breaches of duty has been established against him. Any disadvantage that he has suffered has in general terms been inherent in ASIC discharging its public duty of pursuing him in respect of those breaches. If there were any unfairness in his treatment it could not, however, detract from two of the principal factors in the assessment of the disqualification: first, the necessity of protection of the public; and, secondly, the element of retribution and deterrence that is expressed in the disqualification. 22 The conclusion that I have come to is that the period of disqualification to be imposed on Mr Goulding under s 206C of the CA should be 25 years. 23 So far as costs are concerned, ASIC submits that, as it was substantially successful against Mr Goulding, he should be the subject of a general order to pay ASIC's costs of the proceedings. ASIC says that no portion of the case which it withdrew or in which it failed was sufficiently discrete to justify it being treated separately, so far as costs are concerned. 24 In my view, the matters adverted to in items (3), (4), (5) and (6) in [14] above certainly do not justify any detraction from a general costs order in ASIC's favour. However, there was a considerable amount of evidence put on and some time taken at trial relating to the matters adverted to in items (1), (2), (7) and (8) in [14] above, although the evidence relating to (8) also largely had other uses. Of these matters, those in (1) and (8) were withdrawn by ASIC and not pursued to the end of the trial. ASIC pursued the matters in (2) and (7) to the end of the trial and failed on them. Each of items (1), (2) and (7) was supported by a body of evidence that was not otherwise of utility in the trial. In my view it would not be just for the costs of preparing this evidence and conducting these four matters at the trial to be visited upon Mr Goulding because of ASIC's general success in the proceedings. In a trial in which the affidavit and exhibit evidence was voluminous, which spanned 23 days and in which there have been copious written submissions it is not easy to put a figure on what proportion of the costs should be attributed to these matters. Doing my best to make an estimate, as judges are enjoined to do, it is my view that justice will be done if I order that Mr Goulding pay 90% of ASIC's costs of the proceedings. ASIC does not oppose the making of an order in these terms. ASIC also properly concedes that Mr Goulding should have credit against these costs for any part of the $60,000 in costs ordered against Mr Geagea that is paid. 25 Something should be said specifically about one matter of complaint by Mr Goulding that, if established, could potentially require reflection in the quantum of the costs order made against him. This concerned the number of amendments to ASIC's pleading and consequent changes of course in the direction of its case. The case was tried on the fifth amended statement of claim. However, by reason of Mr Goulding's complaints in this regard, ASIC has presented me by way of submission with an analysis of the course of the amendments and I have carefully considered the history of that course. Two things should be said about the amendments that were allowed. The first is, that in every case they were occasioned by changes in the factual situation which faced ASIC after the last amendment had been sought. Secondly, in every instance, they added to the case that ASIC sought to make against Mr Goulding. They did not withdraw any material or mean that any effort which had previously been made either by ASIC or Mr Goulding was wasted. In these circumstances, in my view there is no just complaint about the course of the amendments that ASIC in fact succeeded in obtaining. On the last occasion, a major amendment sought by ASIC was refused by me because I thought it was unfair that it should be brought into the trial at the stage at which it was sought: see ASIC v Sydney Investment House Equities Pty Ltd [2007] NSWSC 1456. In my view, there was not, by reason of the course of amendment, any reason to diminish the quantum of the costs order against Mr Goulding.

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