Australian Securities and Investments Commission v Healey

BACKGROUND 8 The Court has found that, in the course of participating in the resolutions approving the accounts of CPL, CPT and CRT for the financial year ending 30 June 2007, each of the directors contravened ss 180(1), 344(1) and 601FD(3) of the Act. Each of those provisions is a civil penalty provision (s 1317DA). In the case of Mr Nenna, contraventions have either been admitted or found of ss 180 and 601FD(3) of the Act. 9 A brief summary of facts as found in the liability judgment or as agreed between the parties is useful in providing background to the issues before the Court. I set this summary out below.

Introduction 10 The 2007 annual reports of CNP and CER failed to disclose significant matters: (a) in the case of CNP, the report failed to disclose some $1.5 billion of short-term liabilities by classifying them as non-current liabilities, and failed to disclose guarantees of short-term liabilities of an associated company of about US$1.75 billion that had been given after the balance date; (b) in the case of CER, the 2007 annual reports failed to disclose some $500 million of short-term liabilities that had been classified as non-current. 11 The information not disclosed: (a) included matters of significance to the assessment of the risks facing CNP and CER; and (b) was well known to the directors, or if not well known to them, included matters that should have been well known to them. 12 The omissions in the financial statements the subject of this proceeding were matters that could have been seen as apparent without difficulty upon a focusing by each director, and upon a careful and diligent consideration of the financial statements. 13 The directors are intelligent, experienced and conscientious people. There has been no suggestion that each director did not honestly carry out his responsibilities as a director. The contraventions did not involve knowledge on the part of any defendant that he was acting wrongly: cf Adler v Australian Securities and Investments Commission (2003) 46 ACSR 504 per Giles JA at [748]. 14 In the period leading up to 6 September 2007, the information regarding the state of the economy and fundraising was fundamentally positive. 15 The advice given to the non-executive directors by Centro's CEO and CFO would not have led the non-executive directors to hold any concerns about the Group's ability to raise debt or equity or the realisable value of its assets.

Information provided to the Board 16 Information was provided to the directors over a period of time which would have or should have provided each director with sufficient knowledge of what was contained within the Board papers and annexures. 17 The directors had before them information showing them that CER's short-term debt position was an important issue for the directors. 18 It was presented to the Board of CPL and CPT on 2 August 2007 that: (a) there was a significant deterioration of the global debt markets; (b) Centro had US$2.8 billion worth of bridge facilities to finance prior to 31 December 2007; (c) Centro US CMBS margins were anticipated to widen significantly from 50 bps to 85 to 90 bps; and (d) market evidence suggested a limited CMBS market at any price. 19 The four guarantees were granted in connection with the increase and the extension of the US$2.6 billion bridge facility of Super LLC and the extension of the US$350 million revolving credit facility of Centro NP LLC. The increase and the extension of the bridge facility was partly required due to the volatility in the US credit markets and the substantial increase in credit spreads. 20 The guaranteed amounts were due in December 2007, being very short-term debts. If the amounts were not paid in a timely manner, the guarantees could be called upon.

Knowledge of the directors 21 The information concerning short-term debt was put before the Board and was readily available to each director over a period of time. In summary, the knowledge of the directors as to short-term debt was as follows: (a) Mr Healey knew that CNP had substantial short-term debt in the order of $2.5 billion. (b) Mr Kavourakis was aware that CNP and CER had facilities that had to be refinanced within 12 months of 30 June 2007, not necessarily repaid. (c) Mr Hall, while he kept himself informed by means of the various papers provided by management and from the annual accounts, was not otherwise aware in July 2007 of the level of debt of CNP which was maturing within 12 months. Mr Hall had been given all the information referred to above, in the same way as the other directors. (d) Mr Cooper was aware, around the time of reviewing the Appendix 4E financial report, that CNP had debts maturing within the year of about $2.5 billion and read the Banking Facilities Review for CNP which provided a figure of $2 billion was due within six months. (e) Mr Goldie was aware there was substantial debt but could not recall the specific figures in September 2007. Mr Goldie was broadly aware in June 2007 of CNP's debt position. (f) Mr Scott was aware of the short-term debt position. 22 Thus, each director knew or should have known that CNP and CER had substantial short-term liabilities which were required to be repaid or refinanced during the year ending on 30 June 2008 as alleged by ASIC. 23 Each of the directors also had knowledge of the guarantees. 24 The directors knew that the guaranteed debt was to be repaid through CMBS issues which were intended to be made in the US market in the period from August to December 2007. 25 There was a risk as at August 2007 (which was not remote) that repayment through the CMBS issues may not be able to be obtained. The directors were aware of some problems with US CMBS transactions and their availability or demand. 26 There was a possibility that if the markets did not recover, or the banks did not come to Centro's assistance to extend existing finance facilities, Super LLC would need support. Entering into the guarantees involved legal obligations and potential liabilities.

Versions of the accounts 27 The information in version Draft #4 of the accounts, emailed on 5 September 2007, which was before the directors on 6 September 2007, included the current interest bearing liabilities in the balance sheet and note 18 (but without the reference to the Appendix 4E). 28 In regards to the final full and concise financial statements of CER that were prepared for and available to the BARMC and the Board at the meetings on 5 and 6 September 2007: (a) the final financial statements for CNP and CER (CPL, CPT, CRL and CRT) would have been completed prior to the BARMC meeting on 5 September 2007, but there were some cosmetic changes made at the request of PwC after that; (b) the full final financial statements would have been ready not long before the meeting; and (c) all the financial statements (both full and concise) were placed in a room at the Glen available for review. 29 There was a balance sheet of CRT and its controlled entities included in the audit committee pack sent out on 31 August 2007. It was identical to the balance sheet in the final signed accounts of CER, as lodged with ASIC. 30 Ms Hourigan sent a printer's proof of the CER concise financial report to the directors on 4 September 2007. The balance sheet in this report is in the same form as the final concise balance sheet in the CER annual report. 31 Each member of the BARMC has said that they read CER's full financial report at the Glen on one of 2, 3 or 4 September 2007. The full financial accounts of CER available to be read on those days were in the same form as those ultimately filed with ASIC and relied upon by ASIC in these proceedings.

Review of statements 32 Versions of both the full and concise financial statements of CNP and CER were made available to the directors prior to the relevant meetings. 33 The full financial statements were available for review by the directors in the meeting room in Centro's head office in the Glen from at least 2 September 2007. 34 Each of the members of the BARMC (Messrs Kavourakis, Hall and Cooper) attended the Glen to inspect the full financial statements between 2 September 2007 and 4 September 2007. In light of the evidence, there is considerable uncertainty about precisely what was available for review and what was contained in the full accounts at the time Mr Healey signed them. 35 Each of the directors had been provided with the concise financial statements of CNP and CER by emails sent by Ms Hourigan on 4 September 2007. 36 With the exception of Mr Hall, each of the directors read or believed they would have read the concise financial statements prior to the relevant meetings. 37 Mr Hall did not review the concise accounts because he had read the full financial statement at the Glen in any event. Mr Kavourakis did not read the balance sheets in the concise accounts for the same reason.

Requirement of directors to understand accounting Standards and note 1(w) 38 All directors had read or should have read and understood note 1(w). 39 Note 1(w) provided each director with sufficient knowledge of the accounting standard relating to classification of liabilities so that each director would have been able to read and understand the financial statements and apply his own knowledge to that task.

Deficiencies in the accounts 40 There has been a failure to comply with the relevant AASB's, and a failure to give a true and fair view, contrary to the provisions of ss 296 and 297 of the Act, and a failure to disclose information in the terms of ss 299 and 299A so as to not comply with s 298. 41 The entry into the guarantees was a material event occurring after the balance date, and was a matter or circumstance that may significantly affect CNP's operations in future financial years for the purposes of s 299. 42 Information regarding the entry into the guarantees was a matter that the members of CNP reasonably required knowledge of in order to make an informed assessment of the operations, financial position, business strategies and prospects for future financial years of CNP.

Reliance on management and systems 43 Centro had a competent and qualified CFO in Mr Nenna. 44 Centro had taken appropriate and adequate steps to manage the transition from AGAAP to AIFRS, which steps resulted in the preparation of a Centro accounting policy manual with input from both PwC and Moore Stephens. 45 Centro had retained competent and qualified external auditors, PwC, to audit the financial reports of CNP and CER, and: (a) PwC's undertaking as auditor specifically included verifying compliance with accounting standards; (b) PwC had complete access to staff and information to conduct its audit; (c) PwC's audit report for the relevant period which was received prior to 5 September 2007 did not raise any issues concerning the accounts or the competence or cooperation of management; and (d) PwC gave audit clearance for the Appendix 4E financial statements at the August 2007 BARMC and the final accounts at the September 2007 BARMC meeting. 46 The directors were assured by PwC, and by their audit plans, that PwC would audit the accounts to ensure their compliance with accounting standards. 47 The non-executive directors were assured by Centro's management that the accounts complied with accounting standards. Mr Scott was assured by Centro's CFO, Mr Nenna, and its chief accountant, Mr Belcher, that the accounts complied with accounting standards. 48 The non-executive directors and Mr Scott reasonably expected that the accounts would comply with AIFRS and that, if they did not for any reason comply, PwC or Centro's accounting staff would identify the error. 49 The non-executive directors and Mr Scott had no reason to expect that the staff of its independent expert auditors, PwC, would fail to appreciate the significance of any changes to the relevant standards. 50 PwC attended numerous meetings of the BARMC. Mr Stephen Cougle and Mr Peter Fekete (of PwC) gave the Appendix 4E accounts and the full financial statements audit clearance. 51 PwC did not raise any concerns regarding the accounts or the capability or diligence of management in the private sessions which management did not attend. Nor did PwC raise any such concerns in their separate private sessions with Mr Scott. 52 Neither Centro's management nor PwC brought to the directors' attention the change between the Appendix 4E and the final accounts. If the audit committee and the Board had been advised that a material error had been detected, this should have prompted them to enquire into the nature and reason for the error. 53 The CEO, CFO and Mr Belcher had signed a management representation letter for the Appendix 4E financial statements at the August 2007 BARMC meeting and the final accounts at the September 2007 BARMC meeting which the non-executive directors understood to convey assurance from them that the accounts were correct and in accordance with the accounting standards. Mr Scott signed the management representation letter after it had been signed by Mr Nenna and Mr Belcher and after Mr Scott had been separately assured by them that the accounts were relevantly compliant. 54 The CFO and Mr Belcher (who during the relevant period was the Group Financial Accounting Manager at Centro) had provided the directors with an "Accounting Issues" paper for the Appendix 4E financial statements at the August 2007 BARMC meeting and the final accounts at the September 2007 BARMC meeting which purported to identify the accounting issues which they felt needed to be drawn to their attention. That paper made no reference to any issue with regards to classification of liabilities or disclosure of post-balance date events. 55 The CFO and Mr Belcher had recommended to the Board that the accounts be approved, and Mr Cougle said at the September 2007 BARMC meeting that he could give comfort to the directors that the auditors had signed-off on the accounts. 56 No-one told the directors that the Appendix 4E financial statements contained an error which both management (Mr Belcher) and PwC (Mr Cougle) accepted should have been communicated.

Section 295A letter 57 The management representation letter dated 5 September 2007 was not, as a matter of construction of the letter and of s 295A, a declaration of the opinion of the CEO and CFO as to the matters specified in s 295A(2)(a), (b) and (d) (there were no matters prescribed under paragraph (d)) and therefore did not satisfy the requirements of the section. 58 The Centro management representation letters were prepared by Mr Belcher using a PwC precedent with involvement from PwC. Draft management representation letters were included in the BARMC packs for the August and September BARMC meetings which were provided to PwC. Mr Cougle, Mr Cronin and Mr Fekete of PwC attended those BARMC meetings at which the draft management representation letters for the Appendix 4Es and the final accounts were tabled and signed. At no time did PwC or Moore Stephens raise any issue with regards to the Centro management representation letters. 59 In preparing the management representation letters Mr Belcher's aim was to comply with the relevant provisions of the Act. He would not have signed the letter if he did not think that the accounts complied with the Act or accounting standards. 60 Mr Scott believed that the letter complied with the requirements of s 295A. He also believed that Centro's solicitors had vetted the letter and held the necessary opinion required by s 295A at the time of signing the letter. 61 Mr Hall and Mr Cooper (of the BARMC) believed the management representation letters complied with the Act. 62 Mr Cooper expected management, including Centro's general counsel John Hutchinson, to "get it right". 63 Mr Hutchinson had previously been a partner of Freehills. He had also attended the August 2007 BARMC meeting at which the Appendix 4E management representation letter was tabled and signed. At that meeting, he presented the internal audit report to the BARMC. The equivalent letter for the final accounts was in the same form. Ms Hourigan, the legally qualified Centro company secretary, was present at both meetings. 64 The non-executive directors were entitled to place trust in PwC, Moore Stephens, the CFO, Mr Hutchinson, Mr Belcher and Ms Hourigan to ensure that the management representation letters provided to them complied with s 295A of the Act. Each of those people had expertise in the field and by their receipt of draft letters and attendance at BARMC meetings had ample opportunity to detect and inform the directors that the letters did not expressly provide for the opinion required by the section. 65 The directors did not read or familiarise themselves with s 295A of the Act. The directors (including Mr Scott) assumed a state of affairs and relied upon others. In receiving the management representation letter, each director failed to read it properly or at all to ensure compliance with s 295A, before approving the financial statements.

Consequence of omissions 66 It was reasonably foreseeable in August and September 2007 that: (a) the subsequent discovery and correction of a significant error in the classification of current liabilities in the accounts of CPL and CPT could lead to harm to the interests of CPL, CPTM and/or CPT; and (b) a failure to make the required disclosure in the CPL and CPT accounts of significant guarantees undertaken subsequent to the balance date could lead to harm to the interests of CPL, CPTM and/or CPT. 67 The reputation of CNP and CER as well managed and well governed entities was crucial to the maintenance of confidence in them in the financial market. The reputation of the entities was inevitably a matter of concern to the directors. The occurrence of breaches of the Act had the potential to damage the reputation of the entities in the financial market. 68 The revelation that CNP and CER had erred by not disclosing substantial on balance sheet debt liabilities, and that CNP had erred in not disclosing that it had guaranteed substantial off balance sheet liabilities of the US joint venture vehicle, was itself likely to lead to a loss of confidence. 69 A loss of confidence in the management of CNP and CER on the part of investors and other participants in the financial market was itself calculated to affect the market price of the securities of the entities, and therefore the interests of security holders and lenders. 70 The concern of the management that 'credit issues', meaning the availability of financial credit, might affect the reputation of the entities, and therefore their standing in the financial market, was shown by an email exchange between Mr Nenna and Mr Scott on 11 July 2007, in which Mr Nenna updated Mr Scott on meetings with relationship banks and particularly concerning the take-out of the JP Morgan bridge facility. 71 The omitted information was important to users of the accounts, particularly with respect to the assessment of the value of the securities which were quoted and traded on the ASX. 72 Throughout the period from 18 September 2007 to 15 February 2008 users of the CPL 2007 Accounts and the CPT 2007 Accounts, being persons interested in making decisions whether to acquire, hold or dispose of CNP stapled securities, were, uninformed about: (a) the extent of the current liabilities of CPL and the entities controlled by it; and (b) the extent to which CPL and CPTM, as responsible entity of CPT, had entered into guarantees relating to loans to Super LLC and Centro NP LLC which were due and payable on or before 31 December 2007 and details of those guarantees; where that information would have been likely to be relevant to or influential in respect of those decisions. 73 Throughout the period from 18 September 2007 to 15 February 2008 users of the CRT 2007 Accounts, being persons interested in making decisions whether to acquire, hold or dispose of CER stapled securities, were uninformed about the extent of the current liabilities of CRT and the entities controlled by it where that information would have been likely to be relevant to or influential in respect of those decisions. 74 Litigation by shareholders, including class actions, had by 2007 become increasingly common in circumstances where the share price of an entity had declined and there was information which had not been previously disclosed which might have influenced the price had it been earlier disclosed. 75 It was apparent in 2007 that an error in the accounts of a large publicly listed entity such as CNP or CER, or a failure by either of them to disclose a significant matter, could result in litigation against them. In addition, because they were publicly listed, such an error or failure could also well attract the attention of ASIC and be investigated. 76 The expenses incurred by CNP and CER in relation to proceedings commenced against those companies and its directors and officers in the Federal Court of Australia and in complying with an investigation by ASIC into the affairs of Centro are (as at 31 March 2011): (a) expenses incurred by CNP in relation to legal proceedings - $14,303,690; (b) expenses incurred by CER in relation to legal proceedings - $5,985,825; and (c) expenses incurred by CNP and CER in relation to ASIC's investigations into Centro - $2,034,771. 77 As at the date of delivery of these reasons, each of the figures set out above is likely to be higher.

Declarations and relief from liability 78 The making of a declaration of contravention is a precondition to the imposition of pecuniary penalties and disqualification orders. 79 A declaration of contravention must specify the court that made the declaration, the civil penalty provision that was contravened, the person who contravened it, the conduct that constituted the contravention, and the corporation or registered scheme to which the conduct related: s 1317E(2). 80 On the assumption that declarations were to be made, discussion took place between the Court and the legal representatives for the parties as to the form of any declaration in this proceeding. 81 The parties eventually agreed upon the form of declarations. In the case of Mr Nenna, the form of declarations proffered by him in my view complies with the requirements of the Act and adequately covers the admission of facts made by him in this proceeding. Whilst ASIC proffered a different form of declarations relating to Mr Nenna, ASIC did not oppose the making of the declarations as proffered by Mr Nenna. I propose to make the declarations as proposed by Mr Nenna. 82 In making declarations, it is important to identify the 'conduct that constituted' the contraventions. It is not enough to merely recite, for example, that the directors approved and adopted the relevant financial statements in contravention of one of the provisions of the Act, without going further to identify the acts of negligence or failure to take the reasonable steps found to have occurred as identified in the liability judgment. As stated in Austin, R and Ramsay, I, Ford's Principles of Corporations Law (13th ed, Butterworths, 2007) at p 91; [3.400]: A difficulty for the courts will be to specify the conduct that constituted the contravention with sufficient but no too much particularity. Presumably the legislature had in mind a statement of fact rather than a statement applying the law to facts. 83 Sections 1317S and 1318 make substantially identical provision for the relief of persons who have or may have contravened a civil penalty provision (s 1317S) or who are or may be liable in respect of negligence, default, breach of trust or breach of duty in the capacity of, amongst others, an officer of the corporation (s 1318). 84 Both ss 1317S and 1318 involve three stages of inquiry: (a) whether the applicant for relief has acted honestly; (b) whether having regard to all the circumstances the applicant ought fairly to be excused; and (c) whether the applicant be relieved from liability wholly or in part, and if partly, to what extent. 85 As I have said, s 1317S is substantially similar to, and is derived from s 1318. Chief Justice Spigelman in Deputy Commissioner of Taxation v Dick (2007) 242 ALR 152 at [44]-[45], stated that: [44] Plainly, with respect to the power to impose pecuniary penalties, and probably also with respect to the power to make a disqualification order, parliament proceeded on the basis that the interpretation of s 1318 either required a clear extension of the reference to "civil proceedings" in s 1318 itself or a new parallel provision. Parliament chose the latter course. In so doing parliament proceeded on the assumption that s 1318 would not, of its own force, apply to proceedings for a penalty even if, by statute, any such "penalty" was recoverable by civil proceedings. [45] No doubt this choice was made, in part, as a matter of convenience in order to have all of the civil penalty provisions together in Pt 9.4B of the Act. The separate provision, now found in s 1317S, which operates in parallel with s 1318, may reflect the objective of establishing a regime involving a clear pyramid of enforcement containing a hierarchy of sanctions, increasing in seriousness from civil liability to civil penalty liability to criminal liability. The legislation was based on this regulatory philosophy as expounded by the Senate Standing Committee on Legal and Constitutional Affairs Report, Company Directors Duties: Report on the Social and Fiduciary Duties and Obligations of Company Directors 1989 (called the "Cooney Committee Report"): see generally H Bird, "The Problematic Nature of Civil Penalties in the Corporations Law" (1996) 14 C & SLJ 405; V Comino, "The Enforcement Record of ASIC Since the Introduction of the Civil Penalty Regime" (2007) 20 AJCL 183 esp at pp 185-91. 86 Neither s 1317S nor s 1318 operate to remove the breach, rather they operate as a dispensing power to excuse the contravener. In Dick, Santow J said at [78]: What is salient is that in the United Kingdom, dating back from s 32 of the English Companies Act 1907 (UK), later adopted in the Australian States, there is a consistent theme that the court should have power to relieve, in order that penal provisions or quasi penal provisions should not operate unfairly or harshly. Relief so extended does not strictly speaking exonerate the person in question by removing the breach; rather it operates as a dispensing power excusing the contravenor. "Exonerate" used in this s 1318 context has therefore the sense of taking a burden from a person who has committed a breach. It does not mean that the breach is deemed never to have occurred. Rather the person concerned seeks to satisfy the court that "having regard to all the circumstances of the case" he or she "ought fairly to be excused" so as to receive dispensation. 87 The first requirement is that the court must be positively satisfied that the applicant has acted honestly. A mere absence of dishonesty will not satisfy the requirements of the provisions. 88 For the purposes of this proceeding, I accept that a person acts honestly, in the ordinary meaning of the term, if the person's conduct is without moral turpitude, that is: (a) without deceit or conscious impropriety; (b) without intent to gain an improper benefit or advantage; and (c) without carelessness or imprudence that negates the performance of the duty in question. 89 If the person is found to have acted honestly, then an evaluative judgment needs to be made as to whether the applicant ought fairly to be excused, and then the exercise of the subsequent discretion to grant relief if this is appropriate. Relevant considerations at both stages include the degree to which the person's conduct fell short of the statutory standard of care and diligence, the seriousness of the contravention and its potential or actual consequences, impropriety such as deceptiveness or personal gain, and contrition. 90 In breach of duty cases, where there is an element of 'unreasonableness', the 'degree of unreasonableness' (the extent of departure from the required norm) remains a relevant matter for consideration in considering all the circumstance in making the evaluative judgement and exercising the residual discretion: see Australian Securities and Investments Commission v Vines (2005) 65 NSWLR 281 at [38]-[39]. 91 I do not regard the issue of general deterrence as a factor at the evaluative stage, but it is a factor at the stage of the exercise of the discretion in considering whether to grant relief from liability at all or in part. Undoubtedly, the making of the order imposing liability is discretionary and the court may take into account a wide range of factors. Logically then, if a matter is relevant to be considered by the court in deciding on the orders it will make following a contravention, that matter is relevant to be considered by the court in deciding whether to grant relief from liability in whole or in part. 92 It was submitted by ASIC in these proceedings (and I accept) that in approaching the exercise of discretion under ss 1317S and 1318 the Court has to be mindful of the balance which the Court of Appeal in Morley v Australian Securities and Investments Commission (No 2) [2011] NSWCA 110 said had to be struck: [125] Accepting that the need for personal deterrence is low, nonetheless general deterrence is in our view an important consideration given the nature and significance of the cash flow analysis contravention. As well, it is necessary that relief be granted appropriate to mark significant failure in performance of the duties of a senior executive of a large public corporation and to maintain public confidence in the law's upholding of corporate standards. [126] In a picturesque phrase, in Re One.Tel (In liquidation); Australian Securities and Investments Commission v Rich [2003] NSWSC 186; (2003) 44 ACSR 682 at [26] Bryson J observed that "[n]o-one should be sacrificed to the public interest". That was taken up in Australian Securities and Investments Commission v Beekink at [113]. Protection of the public, including by general deterrence, is at the heart of disqualification orders, and a delinquent officer against whom a disqualification order is made is not sacrificed. The phrase is a reminder that the public interest and the need to protect the public from repeated conduct or like conduct of others is balanced against the hardship to the officer. 93 A question has arisen as to the scope of the relief available. Sections 1317S and 1318 speak of liabilities to which a person would otherwise be subject, and a liability that might otherwise be imposed. 94 In ASIC v Vines at [50], Austin J said: The exoneration provision permits the court to grant relief from "liability" (including liability that may exist). In civil penalty proceedings, liability arises from the making of orders after a finding of contravention, rather than directly from the finding of contravention itself. 95 As is apparent from the wording of the Act, an application under s 1317S or s 1318 may be made in advance of and independently of any proceedings brought by ASIC or any other person. Relief available under an application is not limited by the fact that it has been made in a proceeding brought by ASIC and, if fully granted, would extend to liability of every kind arising from the contravention. 96 The question that has arisen is whether the making of a declaration of contravention (for which s 1317S provides in mandatory terms) is itself a liability to which a person would otherwise be subject but may be relieved. There have been cases in which the court has made a declaration of contravention but also made orders under s 1317S relieving an applicant wholly from 'liability'. However, in remarks upon the operation of s 1317S in Australian Securities and Investments Commission v Plymin (No 2) [2003] VSC 230; (2003) 21 ACLC 1237, Mandie J said at [7] that it: … may operate in relation to all or any of the orders which the Court may make, including a declaration, a prohibition order, a pecuniary penalty order and an order for compensation. If it appears to the Court having regard to all the circumstances of the case that the person ought fairly to be excused for the contravention, the Court is empowered not to subject the person to any liability or to subject the person to some only of the available orders, or perhaps, in some cases, to part only of some liability. (own emphasis) 97 In this proceeding, it is not necessary for the Court to decide this issue because in the circumstances as a matter of the exercise of the Court's discretion under ss 1317S and 1318, I have concluded that the appropriate course to take is to decline to relieve the defendants, or any of them, from the 'liability' (if it is a liability) of such declarations of contravention.

Penalties generally 98 I now turn to set out further applicable legal principles relating to penalty generally. 99 There are various reasons why a contravention of the Act should not go unpunished and the imposition of what might otherwise be regarded as a harsh penalty should be imposed. As Finkelstein J said in Australian Competition and Consumer Commission v ABB Transmission and Distribution Ltd (No 2) (2002) 190 ALR 169 at [16] in the context of anti-trust violations: It is generally accepted that protection of society is the ultimate end of punishment. Traditionally this end is sought to be achieved by the imposition of punishment that serves four functions: deterrence, retribution, reformation and incapacitation. By deterrence I mean both specific deterrence, where the punishment imposed is sufficiently unpleasant to deter the person from committing further breaches of the law, and general deterrence where the punishment is set to deter potential offenders from committing that offence. The object of general deterrence is to prevent future harmful conduct and should be seen as a fundamental goal of sentencing. For that reason general deterrence justifies the imposition of what might otherwise be regarded as a harsh penalty (that is a penalty that takes into account not only the offender's conduct, but the criminal propensity of others) for the individual concerned, to bring about a greater benefit for society as a whole. 100 In Adler v Australian Securities and Investments Commission [2003] NSWCA 131, Giles JA said at [748]: For both pecuniary penalty and disqualification the task is normative, and the nature of the conduct of the person found to have contravened the civil penalty provision is relevant. That a director fails to exercise care and diligence through neglectful inattention is one thing; it is another thing if a director fails to exercise due care and diligence with knowledge that he is acting wrongly, contrary to the interests of the company, and in his own interests. Provided procedural fairness is afforded, there is no error in characterising the director's conduct as dishonest, if it fairly bears that characterisation, when it comes to deciding whether a pecuniary penalty should be imposed and if so in what amount, or to deciding whether disqualification is justified and if so for what period. It would be nonsense if that could not be done. 101 It seems to have been the practice in cases where application is made to impose a pecuniary penalty and a disqualification from managing a corporation, consequent upon a finding of a contravention of the Act, for the court to consider first the issue of disqualification before considering whether a pecuniary penalty should be imposed: Australian Securities Commission v Forem-Freeway Enterprises Pty Ltd (1999) 30 ACSR 339; Rich v Australian Securities and Investments Commission (2004) 220 CLR 129; Australian Securities and Investments Commission v MacDonald (No 12) (2009) 259 ALR 116; Australian Securities and Investments Commission v Citrofresh International Ltd (No 3) (2010) 268 ALR 303 ([2010] FCA 292). 102 However, it is always necessary to consider all the available penalties, and impose the appropriate penalty from the range available having regard to the circumstances of the proceeding. For instance, as I have determined, disqualification bans and pecuniary penalties are not the appropriate penalty in the case of the non-executive directors, but in the case of Mr Scott the imposition of a pecuniary penalty is appropriate although a disqualification ban is inappropriate. This is principally because it would be inappropriate to ban the directors (including Mr Scott) from acting as directors having regard to the circumstances of the contraventions and their past and future contribution to the corporate world, whilst in the case of Mr Scott a penalty in addition to making declarations of contravention is necessary to act as a general deterrent in the case of a chief executive officer. 103 I make mention of one other matter as to the imposition of penalties generally. ASIC produced a table summarising the decisions of the courts on disqualification and pecuniary penalties. It was accepted, however, that the guidance which can be obtained from other decisions is limited, as each decision is closely related to its own facts. The facts in such cases tend to be highly complex and the circumstances of each person under consideration are special to that person. In my view, whilst some cases may be similar, no decision raises the same or sufficiently similar circumstances surrounding the contraventions that occurred here and the circumstances of each defendant, looking both at the time of the contraventions and subsequently.

Disqualification 104 Although there has been a considerable number of cases which have set out the principles, propositions and circumstances which should be taken into account in determining whether, and for what period, an order should be made disqualifying a person from managing a corporation, in Rich v Australian Securities and Investments Commission (2004) 220 CLR 129 at [48] McHugh J stated that Santow J's judgment in Re HIH Insurance Ltd (in prov liq) and HIH Casualty and General Insurance Ltd (in prov liq); Australian Securities and Investments Commission v Adler (2002) 42 ACSR 80 was the leading authority on the reasons for a court exercising its power under ss 206C or 206E of the Act. It has been referred to and followed in most cases dealing with the subject. 105 The propositions expounded by Santow J in ASIC v Adler must, however, be considered in the light of the decision of the High Court in Rich. Justice Santow's propositions, which followed from his analysis of the cases up to that time, were as follows: [56] The cases on disqualification gave orders ranging from life disqualification to 3 years. The propositions that may be derived from these cases include: (i) 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; (ii) 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; (iii) Protection of the public also envisages protection of individuals that deal with companies, including consumers, creditors, shareholders and investors; (iv) The banning order is protective against present and future misuse of the corporate structure; (v) The order has a motive of personal deterrence, though it is not punitive; (vi) The objects of general deterrence are also sought to be achieved; (vii) In assessing the fitness of an individual to manage a company, it is necessary that they have an understanding of the proper role of the company director and the duty of due diligence that is owed to the company; (viii) Longer periods of disqualification are reserved for cases where contraventions have been of a serious nature such as those involving dishonesty; (ix) In assessing an appropriate length of prohibition, consideration has been given to the degree of seriousness of the contraventions, the propensity that the defendant may engage in similar conduct in the future and the likely harm that may be caused to the public; (x) 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 conduct; (xi) A mitigating factor in considering a period of disqualification is the likelihood of the defendant reforming; (xii) 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: • character of the offenders; • nature of the breaches; • structure of the companies and the nature of their business; • interests of shareholders, creditors and employees; • risks to others from the continuation of offenders as company directors; • honesty and competence of offenders; • hardship to offenders and their personal and commercial interests; and • offenders' appreciation that future breaches could result in future proceedings; (xiii) Factors which lead to the imposition of the longest periods of disqualification (that is disqualifications of 25 years or more) were: • large financial losses; • high propensity that defendants may engage in similar activities or conduct; • activities undertaken in fields in which there was potential to do great financial damage such as in management and financial consultancy; • lack of contrition or remorse; • disregard for law and compliance with corporate regulations; • dishonesty and intent to defraud; • previous convictions and contraventions for similar activities; (xiv) In cases in which the period of disqualification ranged from 7-12 years, the factors evident and which lead to the conclusion that these cases were serious though not "worst cases", included: • serious incompetence and irresponsibility; • substantial loss; • defendants had engaged in deliberate courses of conduct to enrich themselves at others' expense, but with lesser degrees of dishonesty; • continued, knowing and wilful contraventions of the law and disregard for legal obligations; • lack of contrition or acceptance of responsibility, but as against that, the prospect that the individual may reform; The difficulty with Roussi's case is that disqualification for 10 years was ordered, as this was the period of disqualification that the ASC had sought. Had a longer period been applied for, Einfeld J may have considered giving a longer period; (xv) The factors leading to the shortest disqualifications, that is disqualifications for up to 3 years were: • although the defendants had personally gained from the conduct, they had endeavoured to repay or partially repay the amounts misappropriated; • the defendants had no immediate or discernible future intention to hold a position as manager of a company; • in Donovan's case, the respondent had expressed remorse and contrition, acted on advice of professionals and had not contested the proceedings. [Citations omitted] 106 In Elliott v Australian Securities and Investments Commission; Plymin v Australian Securities and Investments Commission (2004) 10 VR 369; 205 ALR 594; 48 ACSR 621; [2004] VSCA 54 the Victorian Court of Appeal likened many of the items in Santow J's list to sentencing principles, observing that matters going to aggravation and mitigation need to be considered and accorded proper weight, but above all else, protection of the public and deterrence, specific and general, must also be given appropriate consideration. 107 In Rich at [52] McHugh J said that both Santow J's list and the comments of the Victorian Court of Appeal indicated that factors taken into account in the criminal jurisdiction - retribution, deterrence, reformation, contrition and protection of the public - were also central to determining whether a disqualification order should be made and, if so, the appropriate period of disqualification. 108 As to the nature and seriousness of the contraventions, McHugh J gave examples, by reference to the decided cases, of the kinds of contraventions which have been held to justify the making of disqualification orders: [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, making improper use of the position of director to gain an advantage for that person or for others to the detriment of the company, making inappropriate use of company funds, engaging in misleading and deceptive conduct, permitting corporations to trade while insolvent, operating unregistered schemes unlawfully or carrying on a business such as a securities business or an investment advice business without a licence and failing to comply with administration obligations. In substance, the nature of these contraventions is little different from those which attract the sanctions of the criminal law. [Citations omitted] 109 I accept that the purpose of a disqualification order is not only protective, it is also punitive. It may be imposed by way of punishment and for general deterrence: Australian Securities and Investments Commission v Vizard (2005) 145 FCR 57; 219 ALR 714; 54 ACSR 394; [2005] FCA 1037 at [35]. 110 As I have indicated, Santow J's propositions from his decision in Adler need to be considered in light of the decision of the High Court in Rich. Justice Austin pointed out in Australian Securities and Investments Commission v Vines (2006) 58 ACSR 298 at [35]-[38]: [35] ... The High Court's decision, that proceedings in which an application is made for a disqualification order are proceedings for the imposition of a penalty, for the purposes of the privilege against exposure to a penalty, has very little effect on the propositions. It directly affects only proposition (v), to the extent that a disqualification order should now be regarded as involving the imposition of a penalty. [36] The majority judges in the High Court did not directly consider the principles to be applied by the court when considering whether to make a disqualification order, and if so, the period of disqualification. However, McHugh J considered that topic at some length. His general thesis, expounded at [41], was that although judges frequently said that the purpose of the disqualification provisions is protective, what they did in practice was little different from what judges do in determining what orders or penalty should be made for offences against the criminal law. [37] His Honour enumerated some factors that the courts take into account, in what he referred to as a "synthesis from which the judges make a value judgment concerning whether to order disqualification and, if so, the period of disqualification that should be imposed" (at [43]): • whether the defendant now is or in future will be a fit and proper person to manage corporations; • the size of any losses suffered by the corporation, its creditors and consumers; • legislative objectives of personal and general deterrence; • contrition on the part of the defendant; • the gravity of the misconduct; • the defendant's previous good character; • prejudice to the defendant's business interests; • personal hardship; and • the willingness of the defendant to render assistance to statutory authorities and administrators. [38] He referred to Santow J's 15 propositions with approval, and set them out: at [49]. He remarked (at [50]) that some of the propositions go to the protection of the public, while others relate to considerations that reduce the period of disqualification and therefore benefit the defendant, and still others (such as propositions (v) and (vi)) recognise that the disqualification provisions also have objectives of personal and general deterrence, strongly resembling sentencing principles under the criminal law. 111 In Australian Securities and Investments Commission v White (2006) 58 ACSR 261; [2006] VSC 239 at [18], Hargrave J referred to what McHugh J had said in Rich and very usefully distilled the analysis of McHugh J into four general categories of important matters to which courts have regard when determining whether to order disqualification and if so for what period: (a) the nature and seriousness of the contraventions; (b) protection of the public; (c) retribution and deterrence; and (d) mitigating factors. 112 That general deterrence is a factor to be taken into account was affirmed by the Full Court of the Federal Court of Australia in Australian Securities and Investments Commission v Beekink (2007) 238 ALR 595; 61 ACSR 305; [2007] FCAFC 7 at [83] where it was held that the overwhelming weight of authority was that general deterrence was a factor to be taken into account in deciding whether, and if so for what period, disqualification ought to be imposed. 113 In Beekink the Full Court of the Federal Court made the following observations about the operation of general deterrence in the overall scheme of things: [80] In Re HIH at [56] Santow J derived fifteen propositions from earlier authorities as guiding principles or relevant factors in the exercise of the power to order disqualification. In Rich v Australian Securities and Investments Commission (2004) 220 CLR 129 at [48], McHugh J described Santow J's decision as the leading authority on the subject. [81] Although the first four propositions distilled by Santow J go to the public protection nature of the order, proposition (vi) states that the objects of general deterrence are also sought to be achieved. Santow J cited the decision of Australian Securities Commission v Donovan (1998) 28 ACSR 583 at 602 as authority for this principle. [82] The authorities dealing with the exercise of the power were collected in a footnote in the majority judgment in Rich: at [34] n 86. The only authority which casts any doubt on the role of general deterrence is the decision of Madgwick J in Australian Securities Commission v Forem-Freeway Enterprises Pty Ltd (1999) 17 ACLC 511 at [41]. [83] In our view, the observations of Madgwick J in Forem-Freeway were limited to the question of the period of any disqualification. In any event, the overwhelming weight of authority is that general deterrence is a factor to be taken into account in deciding whether, and if so for what period, disqualification ought to be imposed. [84] This was explained by McHugh J in Rich at [50]-[52]. His Honour accepted that the authorities show that deterrence, both personal and general, are central factors in determining whether an order for disqualification should be made and, if so, for what period. [85] The principle is well illustrated in the remarks of Cooper J in Donovan at 607-8. His Honour was satisfied that as a personal deterrent and as a deterrent to others "who may be minded to engage in like conduct", a director should be disqualified for a period of three years. [86] Cooper J dealt with the position under the previous terms of the legislation. The section then in force was not identical to the present s 206C of the Act. Nevertheless, the section has its genesis in the provision to which Cooper J referred and, in particular, in the Corporate Law Reform Bill 1992. His Honour cited, at 602, a passage from the Public Exposure Draft and Explanatory Paper of the Bill which states in plain terms the importance of general deterrence. [87] In Re HIH, Santow J dealt with s 206C of the Act when imposing disqualification orders on Mr Adler and Mr Williams. It is noteworthy that his Honour cited the decision of Cooper J in Donovan as an authority for his sixth proposition, namely that general deterrence is an objective. [88] In the present case, the learned primary judge apparently recognised that general deterrence is a factor. He referred at [23] to the observations of Finkelstein J in Australian Securities and Investments Commission v Vizard (2005) 219 ALR 714 at 723. He also referred elsewhere in his judgment to passages from Re HIH. [89] Nevertheless, in our view, with respect to his Honour, it is plain that he did not take general deterrence into account at all when deciding not to make a disqualification order against Mr Beekink. This is clear in the passage at [106] of his Honour's judgment which we have reproduced above. His Honour said that disqualification was not warranted to protect the public and personal deterrence was not required by that means. The absence of any reference to general deterrence shows quite clearly that his Honour did not consider it. [90] Indeed, it is clear from the whole of his Honour's reasoning on the question of disqualification that he paid no regard to general deterrence. The whole tenor of his reasoning was that Mr Beekink is a person of exemplary character who was guilty only of a lapse in attention which was unlikely to recur. [91] It seems to us, with respect, that his Honour gave too much weight to the personal considerations affecting Mr Beekink without considering that part of the protective nature of the order which is concerned with providing a deterrent to other persons involved in the management of corporations. 114 The consequences of the contravention are relevant to the determination of a period of disqualification or other penalty. For example, in Re One.Tel Ltd (in liq); Australian Securities and Investments Commission v Rich (2003) 44 ACSR 682, Bryson J, in the course of considering the agreed orders against the defendant, said that: [21] The admitted facts show disturbingly serious failures in a person holding office as Managing Director of a large company listed on ASX, on whose due compliance with the duties of a director depended interests, of various kinds but all significant, of thousands of persons as creditors, investors and employees of One.Tel and companies associated with it, and also of more than 2 million persons who were to some degree involved as customers in the business destiny of One.Tel. All of these persons had something to lose, at the least in terms of inconvenience and for thousands of them much more, if the business failed. Taken together the breaches of duty which Mr Keeling has acknowledged have brought about a commercial enormity, a corporate collapse on a very large scale in the context of the Australian economy. 115 ASIC also submitted that parts of the recent penalty decision in MacDonald were instructive to illustrate the application of the principles. In that case, three defendants (MacDonald, Shafron and Morley) were found to have breached s 180 by failing to inform the Board of shortcomings or limitations of various materials put to the Board of James Hardie in relation to funding available in future to meet asbestos claims. 116 Periods of disqualification were imposed in circumstances where the Court at first instance found that: (a) both MacDonald and Shafron were fit persons to manage a corporation; (b) both MacDonald and Morley had exemplary testimonials and the need for personal deterrence was low; (c) there was low propensity to engage in similar misconduct; and (d) all three defendants (and their families) had suffered as a result of publicity surrounding the Special Commission of Inquiry into James Hardie's conduct, and in Morley's case the prospect of him holding directorships or senior executive positions was severely limited. 117 ASIC submitted that given the contraventions in question (breaches of s 180), the underlying conduct involved (failure to inform the Board of material matters) and the mitigating circumstances relied upon by each of MacDonald, Shafron and Morley, the pecuniary penalties imposed against those defendants are instructive in this proceeding where similar mitigating factors are relied upon. I accept this submission, but again stress that each case must be examined in light of the facts and circumstances before the Court in each proceeding.

Pecuniary penalty 118 There is no reason why the court should not, in respect of a single contravention, impose a period of disqualification as well as a pecuniary penalty: ASC v Donovan (1999) 28 ACSR 583 at 602; Australian Securities and Investments Commission v Vines (2006) 58 ACSR 298 at 317; Australian Securities and Investments Commission v Citrofresh International Ltd (No 3) (2010) 268 ALR 303; [2010] FCA 292 at [21]. 119 When it is proposed to make a disqualification order, the consideration of whether to impose a pecuniary penalty, and if so in what amount, attracts the principle of 'totality', that is to say it is important to ensure that the "aggregate amount is just and appropriate": Australian Securities and Investments Commission v Vines (2006) 58 ACSR 298 at 318. This applies equally if the appropriate order is a pecuniary penalty and declarations, without there being any disqualification order. 120 In ASIC v Adler (2002) 42 ACSR 80, Santow J set out a number of principles and propositions in relation to the power and discretion to impose a pecuniary penalty, as follows: [125] It is well established that the principal purpose of a pecuniary penalty is to act as a personal deterrent and a deterrent to the general public against a repetition of like conduct: Australian Securities Commission v Donovan, above; Trade Practices Commission v CSR Ltd [1991] ATPR 52-135. In Donovan, the court said: If compliance with the appropriate standards of commercial conduct within the management of corporations by deterrents is the objective, then any penalty should be no greater than is necessary to achieve this objective. Otherwise severity above that figure would be oppressive. [126] Following a review of the relevant cases, I have attempted to summarise the propositions that may be derived. I recognise that, as with banning orders, there is no simple mechanical process for quantifying the appropriate penalty but some guidance can be derived from the principles and factors that are identified below. I should add that in a context where honesty or propriety of purpose is involved, the sphere of discourse applicable to economic legislation such as antitrust law is wholly distinct from corporations law with its emphasis on proper purpose and honesty; see more generally the discussion by ALRC in "Securing Compliance - Civil and Administrative Penalties in Australian Federal Regulation" discussion paper 65, April 2002 esp Ch 18. These propositions have guided me in the present case: (i) the pecuniary penalty has a punitive character, but it is principally a personal and general deterrent to prevent the corporate structure from being used in a manner contrary to commercial standards. The penalty should be no greater than is necessary to achieve this object: Australian Securities Commission v Donovan at 608; (ii) to determine whether compensation is to be paid and in what amount it is necessary to consider the prospect of the respondent paying such compensation and the hardship to the defendant from such payment. Compensation has been ordered for an amount less than that lost even though there was little prospect of any of it being recovered: Australian Securities Commission v Forem-Freeway at 351-2; (iii) the capacity of the defendant to pay is a relevant consideration in determining a pecuniary penalty: Australian Securities Commission v Forem-Freeway at 351-2; (iv) in assessing a pecuniary penalty it is important to consider the consequences of an associated disqualification order for the defendant. If the making of such an order has significant consequences, they may operate as a factor in favour of a lesser penalty. Where the disqualification order does not have significant consequences for the defendant, the prohibition order is likely to be only marginally relevant: Re Tasmanian Spastics Association at 751-2; (v) it is important to assess whether the order will prejudice the rehabilitation of the defendant: ASC v Forem-Freeway at 352; (vi) the size of the penalty is a question of discretion. The circumstances of one case should not dictate the size of the penalty on another case: Australian Securities Commission v Donovan at 608; (vii) in Australian Securities Commission v Forem-Freeway civil compensation of $200,000 was ordered. This amount was lower than the losses to the company concerned. This amount was ordered, even though it was highly unlikely that the amount would ever be paid as the respondent was bankrupt. In this case it was held that precision in the amount was therefore unnecessary: Australian Securities Commission v Forem-Freeway at 351; (viii) a fine was not ordered in Australian Securities Commission v Forem-Freeway. However the ASC was given liberty to apply at a later stage in relation to this matter. The court held that the personal hardship to the respondent, the unintended punitive consequences of the other orders and the lack of capacity to pay, justified such order: Australian Securities Commission v Forem-Freeway at 351-2; (ix) factors leading to the order of a penalty in the range of $20,000 - $40,000 included: • defendant was aware of impropriety of actions; • no intention to deprive company permanently of funds; • amounts in question not large; • no deliberate falsification of accounts; • cases classed as being serious misconduct, but not worst cases. Re Tasmanian Spastics Assn at 752; ASC v Donovan at 609; (x) relevant factors leading to the court to order the lower range penalties in the range of $4000-$5000 included: • remorse and contrition shown; • efforts to repay misappropriated funds; • acted upon the advice of professionals; • did not contest the proceedings, or sought to save costs in proceedings; • tended to not involve dishonesty, but negligence or carelessness; • previous unblemished character; • further contraventions unlikely. ASC v Donovan at 609; ASC v Spencer (1997) 25 ACSR 143 at 144-145. 121 As noted by the Full Court of the Federal Court of Australia in Beekink, difficulties arise in trying to discern a universal formula based on pecuniary penalties imposed in previous cases: [118] There are three difficulties in attempting to classify the amounts of pecuniary penalties by reference to common factors in other cases. First, the breaches tend to take a wide variety of forms. Second, the value of money erodes over time. [119] The third reason is that in recent years the courts have been more concerned with the need for the imposition of higher civil penalties to reflect community expectations of the standards to be imposed on company directors; see for example Finkelstein J in Vizard at [33]. [120] This is particularly so at a time when the commercial community demands ever greater financial rewards from the benefit of public office. The expectation of such rewards must be accompanied by an expectation of higher penalties when those in office slip from the standards imposed upon them under the law. 122 Again, I accept that the courts have emphasised the importance of general deterrence, and the need to ensure that the detriment suffered by a defendant does not undermine the need to impose penalties that will achieve general deterrence. 123 In Australian Competition Consumer Commission v High Adventure Pty Ltd [2005] FCAFC 247 at [11], the Full Court of the Federal Court stated: [By] focusing on the detriment to the respondents the judge ignored both the seriousness of the contravention as well as the need to fix upon an appropriate penalty by reference to the need to deter future contraventions. As the cases to which the judge was referred show, the principal, if not the sole, purpose for the imposition of penalties for a contravention of the antitrust provisions in Part IV is deterrence, both specific and general. … [A]s deterrence (especially general deterrence) is the primary purpose lying behind the penalty regime, there inevitably will be cases where the penalty that must be imposed will be higher, perhaps even considerably higher, than the penalty that would otherwise be imposed on a particular offender if one were to have regard only to the circumstances of that offender. In some cases the penalty may be so high that the offender will become insolvent. That possibility must not prevent the Court from doing its duty for otherwise the important object of general deterrence will be undermined. 124 The importance of general deterrence - including in cases where the defendant has already suffered significant detriment as a result of his conduct - was echoed by the NSW Supreme Court in R v Fodera [2007] NSWSC 1194 at [66]-[67], where Bell J noted the following in sentencing a professional defendant: [66] Mr Tobin submitted that it was appropriate to have regard to the fact that the offender has suffered the loss of his ability to practice as a chartered public accountant and that he had been subject to widespread publicity and public vilification connected with the present charge against the background of the collapse of HIH. The extra curial punishment to which the offender has been subject is a matter that I take into account but, again, it is not a factor that is to be given significant weight. [67] In sentencing the offender for the Soc Gen prospectus offence Latham J extracted a passage from the judgment in DPP v Bulfin [1998] 4 VR 114 at 131-132 in which the Victorian Court observed that the prospects of rehabilitation of white collar offenders are generally high and that the consequences of discovery and punishment on the offender and his or her family are frequently devastating. The court pointed to the risk of allowing considerations of this kind to distract attention from the importance of general deterrence. I agree with her Honour that these observations are apposite in dealing with the present offender.

Parity 125 In these proceedings, there are a number of defendants, and the question of parity arises. 126 Relevant authorities on the principle of parity were collected by Gzell J in MacDonald as follows: [319] In Postiglione v R (1997) 189 CLR 295; 145 ALR 408; [1997] HCA 26 it was held that the parity principle of sentencing requires that there should not be a marked disparity between sentences imposed on co-offenders which gives rise to a justifiable sense of grievance. [320] In Lowe v R (1984) 154 CLR 606 at 609; 54 ALR 193 at 194; [1984] HCA 46 Gibbs CJ said it was obviously desirable that persons who have been parties to the commission of the same offence should, if other things are equal, receive the same sentence. But other things are not always equal and such matters as the age, background, previous criminal history and general character of the offender, and the part which he or she played in the commission of the offence, have to be taken into account. [321] As Finkelstein J said in Australian Competition and Consumer Commission v ABB Transmission and Distribution Ltd (No 2) (2002) 190 ALR 169; [2002] FCA 559 at [40]: [40] Next there is the parity principle. The principle is that "[w]here other things are equal persons concerned in the same crime should receive the same punishment; and where other things are not equal a due discrimination should be made": R v Tiddy (1969) SASR 575 at 577. The principle requires little explanation. Consistency in punishment is an attribute of a rational and fair system of justice. [322] Other things being equal, there must be, as Austin J said in Vines 2005 at [45], a persuasive rationale for any difference in the disqualification periods for each of the defendants.

Totality 127 Courts have recognised that the totality principle - an established criminal law sentencing principle - is applicable when civil penalties are imposed for multiple contraventions. 128 I have already touched upon the totality principle. The totality principle (as it applies to civil penalties) was briefly summarised in ACCC v Telstra Corporation Limited [2010] FCA 790 as follows: [229] Application of the totality principle requires the Court to review the entirety of the conduct and to determine whether the proposed penalty is appropriate 'as a whole'. The purpose of the exercise is to ascertain whether the proposed penalty is just and appropriate for the entirety of the contravening conduct, looking at the degree of misconduct involved. [230] The rationale underlying the totality principle is to ensure that the proposed penalty is not out of proportion with the conduct giving rise to the contraventions when viewed collectively, and to ensure the penalty is accordingly just and appropriate from the perspective of that collective assessment. 129 While there has been some divergence in the manner in which the totality principle has been applied in the context of determining pecuniary penalties for multiple contraventions, the approach adopted in a number of recent decisions has been for the court to determine the appropriate pecuniary penalty for each contravention and apply a discount to the aggregate amount. This delineates the appropriate penalty for individual contraventions and quantifies the extent to which the totality principle has been taken into account in the aggregate penalty. 130 In relation to disqualification periods, when determining the disqualification period to be imposed for multiple contraventions, the court should impose a disqualification period for each individual contravention and then take into account the totality principle to arrive at a total effective disqualification period. 131 However, in this proceeding, I propose to treat the various contraventions of the Act by each defendant as arising out of the one event. This was the approach accepted by ASIC and contended for by the defendants. It is unnecessary to adopt the approach otherwise undertaken by the courts in determining the appropriate penalty for individual contraventions.

SERIOUSNESS OF CONTRAVENTIONS 132 The following can be said in relation to the seriousness of the contraventions as is apparent from the findings in the liability judgment, and explains the need for the making of declarations and not relieving any of the defendants from liability, even taking into account all the matters submitted in favour of the defendants. 133 I indicate that in considering the defendants' applications for relief under ss 1317S and 1318 I am influenced by the seriousness of the contraventions and the need for general deterrence. It is the seriousness of the contraventions that precludes me from exercising my discretion to relieve any of the defendants from liability, having regard to the principles of general deterrence. There are many circumstances in favour of the directors and Mr Nenna, which would indicate that they could be otherwise fairly excused, but the seriousness of the contraventions and possible consequences of the conduct which resulted in the contraventions makes me refuse relief from liability in whole or in part. 134 I briefly summarise the matters which indicate the seriousness of the contraventions and the possible consequences of the conduct resulting from the contraventions. 135 In the light of the significance of the matters that the directors knew, if they had been conscious of what their duty required of them they could not have, nor should they have, certified the truth and fairness of the financial statements, and approved the directors' reports, in the absence of the disclosure of those significant matters. If they had understood and applied their minds to the financial statements and recognised the importance of their task, each director would have questioned each of the matters not disclosed. 136 Each director, in reviewing financial statements and directors' reports, needed to enquire further into the matters revealed by those statements and reports. The fact that they did not do so demonstrates in the circumstances a failure by each of them to understand and appreciate what their duty required them to do. 137 I accept ASIC's submission that the conduct of the directors in this proceeding is not merely that of neglectful inattention. On the other hand, it is not a case of any director failing to exercise due care and diligence with knowledge that he is acting wrongly, contrary to the interests of the company. Undoubtedly, the directors did not properly apprehend their duties, but the circumstances in which they found themselves in this position were unusual. Whilst they did not obtain legal advice as to these specific duties, they did retain and properly rely on a range of professional people and organisations in carrying out their responsibilities placed upon them as directors. The Court has found, however, that each director did not go far enough. 138 The nominal and relative amounts, in dollars, of the misclassifications between current and non-current interest bearing liabilities were large and significant. Similarly the post-balance date events not disclosed (the guarantees) were also large, material and significant. 139 The information not disclosed was a matter of significance to the assessment of the risks facing CNP and CER. Giving that information to shareholders and the market is one of the fundamental purposes of the requirements of the Act that financial statements and reports must be prepared and published. The importance of the financial statements is one of the fundamental reasons why the directors are required to approve them and resolve that they give a true and fair view. 140 As explained in Mr Lonergan's third report, the omitted information was important to users of the accounts, particularly with respect to the assessment of the value of the securities which were quoted and traded on the ASX. Mr Lonergan's opinions (set out at [473] of the liability judgment) the answers to Questions 2 and 3 (for CNP) and 5 and 6 (for CER) establish that the omitted information was information that for the purposes of s 674 of the Act (the continuous disclosure requirement) would be expected by a reasonable person to have a material effect on the price or value of the securities: see s 677. In this respect, the contraventions resulted in the possibility, and perhaps the likelihood, of an uninformed market for securities of CNP and CER for at least the period of three months from 18 September 2007 to 17 December 2007. 141 There were possibly persons who, because of this uninformed market, either purchased securities during this period but would not otherwise have done so, or did not dispose of shares when they otherwise would have done so. 142 The significance of the omitted information to the market, and the seriousness of the failure to disclose it, was recognised by the entities upon discovering the possibility of misclassifications in early January 2008, and asking the ASX to impose trading halts. Further, the importance of the market being fully informed, and therefore efficient, has been highlighted in a number of cases, in particular by French J (as he then was) in Australian Securities and Investments Commission, Re Chemeq Ltd v Chemeq Ltd (2006) 58 ACSR 169 at [42]-[46], in the judgment of Finkelstein J in Australian Securities and Investments Commission v Fortescue Metals Group Ltd (2011) 190 FCR 364 at [232]-[233] and by Gzell J in ASIC v MacDonald at [310].

SUBMISSIONS OF ASIC AS TO APPROPRIATE PENALTIES 143 As regulator, the position taken by ASIC is to be carefully considered and given due weight by the Court. ASIC's role is to protect the public interest and maintain corporate standards. Nevertheless, the Court has the advantage of hearing and being able to consider all the submissions of the parties, and to then determine the fair, just and appropriate penalty after considering all the facts and circumstances. 144 ASIC opposed the applications by the defendants pursuant to ss 1317S and 1318 of the Act for relief. 145 ASIC submitted that orders of the Court declaring contraventions under s 1317E of the Act in relation to each defendant should be made. 146 ASIC further submitted that in respect of each defendant there be periods of disqualification or pecuniary penalties within the range or in the order of the periods and amounts set out in the following table: Name of Defendant Disqualification Pecuniary Penalty $ Brian Healey 0.5 - 1.5 years 30,000 - 60,000 Andrew Thomas Scott 3 years 100,000 Samuel Kavourakis 0.5 - 1.5 years 30,000 - 60,000 James William Hall 0.5 - 1.5 years 30,000 - 60,000 Paul Ashley Cooper 0.5 - 1.5 years 30,000 - 60,000 Peter Graham Goldie 0.5 - 1.5 years 30,000 - 60,000 Louis Peter Wilkinson 0.5 - 1.5 years 30,000 - 60,000 Romano George Nenna 3 years 100,000

147 For the purposes of that allocation, ASIC submitted that the following approach would be appropriate: (a) the total disqualification and pecuniary penalty for contraventions in relation to CPL be approximately two-thirds of the periods and amounts specified above, and each of those contraventions have the same allocation; (b) the total disqualification and pecuniary penalty for contraventions in relation to CPT be approximately two-thirds of the periods and amounts specified above and each of those contraventions have approximately the same allocation; (c) the penalties for respective contraventions in relation to CPL and CPT be concurrent; and (d) the total disqualification and pecuniary penalty for contraventions in relation to CRT be approximately one-third of the periods and amounts specified above and each of those contraventions have the same allocation. 148 The result for Mr Healey, for example, would be as follows (assuming an order in the middle of the suggested range): Contravention Disqualification Penalty Concurrence

1. CPL s 180 4 months $15,000
2. CPL s 344 4 Months $15,000
3. CPT s 601FD(1)(b) 4 months $15,000 Concurrent with 1
4. CPT s 601FD(1)(f) 4 months $15,000 Concurrent with 2
5. CRT s 601FD(1)(b) 2 months $7,500
6. CRT s 601FD(1)(f) 2 months $7,500

149 ASIC sought to apply the relevant principles by adopting the four general categories of important matters to which courts have regard when determining whether to order disqualification and if so for what period: (a) the nature and seriousness of the contraventions, including their consequences; (b) protection of the public and the public interest; (c) retribution and deterrence; and (d) mitigating factors. 150 ASIC submitted that the Court could differentiate between the directors in imposing penalties, but did not go so far as submitting the Court should so differentiate. 151 ASIC submitted that there is a public interest in the upholding by the law of corporate standards: see Morley v Australian Securities and Investments Commission (No 2) [2011] NSWCA 110 at [125]. It was then submitted that this is of particular significance when the contravening conduct has resulted in an uninformed market in the securities of publicly listed entities. 152 The fact that the directors' contraventions arose, in ASIC's submission, from the failure by each of them to understand and appreciate what their duty required them to do requires the Court to give consideration, in the light of their evidence, to whether it is likely that the public needs to be protected from similar conduct engaged in the future. While ASIC accepted that the risk of such conduct by the defendants was low, nevertheless ASIC contended that the affidavits of some of the non-executive directors disclosed a reluctance to accept that they breached their duties as directors. 153 In summary, ASIC submitted that the contraventions by the directors were of such seriousness, and had such consequences, that the Court ought not to find that any of them ought fairly to be excused, and that in each case a period of disqualification and a pecuniary penalty was justified. 154 ASIC submitted that general deterrence was an important factor (both as to determining the extent of any relief from liability and as to imposing disqualification and pecuniary penalties) in order to ensure that directors and officers of listed corporations are mindful of the consequences both to themselves and the corporations they manage or direct of a failure to appreciate and carry out their duties with the requisite care and diligence. 155 ASIC further submitted that in determining the extent of any relief from liability and as to imposing disqualification and pecuniary penalties, the Court should determine that the public interest in upholding corporate standards required, in the case of these directors, weight to be given to retribution due to the seriousness of the consequences of the contravention. 156 With regard to the non-executive directors, as the nature and consequences of their contraventions is essentially the same, ASIC has submitted the same range of penalties for each of them. However, as I have indicated, it was submitted that it would be open to the Court to find that differentiation between them is justified on the basis of their differing responsibilities within the Centro companies. This might involve the Court giving consideration to how far short of the required degree of care and diligence each director's conduct fell. In this way, the Court could, if it thought fit, give effect to the aspect of the principle of parity that requires due discrimination to be made when things are not equal: Australian Competition and Consumer Commission v ABB Transmission and Distribution Ltd (No 2) (2002) 190 ALR 169; [2002] FCA 559 at [40]. 157 With regard to Mr Scott, ASIC submitted that the above aspect of the principle of parity does make it appropriate that the penalties imposed upon him be substantially greater than the other directors. In relation to Mr Scott, it was submitted that: (a) he was a highly remunerated CEO whose statutory duties of care and diligence were enhanced by his contractual obligation to perform his duties with the appropriate degree of skill and efficiency; (b) he was responsible to the Board for the performance of Mr Nenna and the other members of management; and (c) he had the additional responsibility within the Centro companies of joining with Mr Nenna in providing the declaration under s 295A that in his opinion the financial statements and notes complied with the accounting standards and gave a true and fair view. 158 It was submitted that Mr Scott's involvement in the affairs of the entities was closer, wider and deeper than the other directors. As the CEO his duties under the Act were said to be enhanced by his contractual duties. It was submitted Mr Scott had a greatly enhanced duty with respect to the scrutiny of the financial statements with a view to satisfying himself that they complied with the requirements of the Act. It was submitted that on his own evidence Mr Scott gave those matters little if any attention, and he relied on Mr Nenna and Mr Belcher to attend to such matters. 159 ASIC did accept that Mr Scott expressed his deep regret for the errors in the accounts and their consequences on the shareholders, the company and the public. He acknowledged that he made mistakes in his review of the accounts and that he should have identified and questioned the short-term debt and guarantee issues. 160 In relation to Mr Healey, ASIC submitted that it could be concluded that he had an enhanced responsibility with respect to the financial statements and reports because as Chairman greater responsibilities fell upon him. 161 It was also submitted by ASIC that each of the members of the BARMC had the additional responsibility for accounting and reporting matters referred to in the BARMC Charter. 162 With regard to Mr Nenna, ASIC submitted that the nature of his contravention was significantly different from and more serious than that of the non-executive directors and represented a failure to meet the required degree of care and diligence which was on par with that of Mr Scott. 163 ASIC acknowledged that there was no allegation of dishonesty on the part of Mr Nenna, nor that he had made any personal gain from his contravening conduct. ASIC submitted, however, that on the evidence provided in his affidavit sworn on 14 June 2011, Mr Nenna has failed to establish that he acted honestly, in the sense that he has not established that he acted without the carelessness or imprudence that negates the performance of the duty in question for the purposes of s 1317S or s 1318. It was submitted that the evidence raises and does not dispel the inference that in fact Mr Nenna was reckless in the performance of his duties in relation to the disclosure of short term liabilities in that he neither knew nor cared what disclosures were made in the accounts in that regard. 164 Further, it was submitted that Mr Nenna's evidence offers no explanation whatsoever for the fact that the accounts and directors' reports failed to disclose the guarantees, he having a central role in negotiating and recommending to the Board that the guarantees be given, and he must have been aware of the need to consider the disclosure of post-balance date events in the final accounts. 165 It was submitted that Mr Nenna had a direct personal involvement in the conduct which led to the directors' contraventions, and that he bears a heavy share of the responsibility for the consequences of the contraventions and his admitted negligence, which is of a very serious order and is inexcusable. 166 It was further submitted that Mr Nenna's evidence of the work pressure that he was experiencing and of the resultant personal stress and effects on his personal and family life should not lead the Court to conclude either that he should fairly be excused for his dereliction of duty in September 2007 or that he should be relieved from liability to any extent.

The directors 167 At the outset, I observe that there is much to be said in favour of the directors, including Mr Scott, which touches upon the nature of the contraventions, the protection of the public, retribution and personal deterrence, and mitigation. 168 I have taken each of these matters in to account in considering the directors' applications for relief from liability, but for the reasons already indicated consider that the need for general deterrence is the important factor that in the exercise of my discretion leads me to refuse those applications. 169 As the Court has already found, the directors are intelligent, experienced and conscientious people. In approving the relevant accounts, the non-executive directors operated in accordance with a set of well-established corporate governance practices, relied on expert accounting advice in so doing, and relied on the operation of a number of "safety nets" designed to ensure that the accounts which were presented to the Board were true and correct. 170 The Board's corporate governance structures were in accordance with the recommendations contained in the ASX's Corporate Governance Principles and Recommendations. In particular, the majority of the Board was comprised of independent directors; the chairman of the Board was an independent director; the role of the chairman and the CEO were exercised by different people; the Board had established an audit committee (BARMC); the BARMC was structured so that it had three members, consisting only of independent non-executive directors; and was chaired by an independent director who was not Chairman of the Board. The BARMC had a formal charter which set out the committee's roles and responsibilities, composition, structure and membership and provided for the committee to report to the Board on matters relevant to the committee's roles and responsibilities. 171 The objectives, roles and responsibilities of the BARMC as set out in the BARMC Charter were in accordance with the recommendations contained in the Australian Institute of Company Directors joint publication with the Institute of Internal Auditors Australia and the Auditing and Assurance Standards Board entitled Audit Committees: A Guide to Good Practice. The BARMC was given responsibility to oversee the company's relationship with the external audit and the audit function generally, oversee the preparation of the financial statements and oversee the company's financial controls and systems. 172 Further, as the Court found, the BARMC (and other Board members) operated under a set of practices and procedures which accorded with good practice. 173 All of the Board's corporate governance practices and procedures referred to above were followed in the process of approval of the relevant financial statements which are the subject of this proceeding. 174 One of the key features of the board's corporate governance practices and procedures in relation to financial reporting was the presence of a number of safety nets designed to ensure that the accounts presented to the Board for approval were correct. As I have observed the non-executive directors reasonably expected that accounts produced by the accounting staff of the Centro Group would comply with AIFRS and that, if they did not for any reason comply, PwC or Centro's accounting staff would identify the error. 175 In this proceeding, it has been seen that the safety nets failed due to no fault of the non-executive directors. 176 It is also relevant to consider the actions of the directors once the errors were identified. Once the issue of a potential misclassification did come to the attention of the Board, steps were very quickly taken by the Board to ascertain how that error came about, including retaining KPMG, Freehills and Middletons to undertake an independent investigation into the matter. The Board's conduct between December 2007 and February 2008 readily permits the inference that, had the non-executive directors been informed of the error in the Appendix 4E, they would not have approved the accounts until the matter had been thoroughly investigated. This was the effect of Mr Cooper's oral evidence which he has elaborated upon in his affidavit as follows: [5] Had the error in the 4E statements or the difference between the Appendix 4E statements and the final financial reports been brought to my attention before the final statements were signed in September 2007, it would certainly have been a notable topic at BARMC and Board meetings and would have provoked a series of questions by me, and I believe, other directors, including asking how it had occurred, was it an indicator of a systemic issue and why should the Board be confident that the current interest bearing liabilities numbers were right. Had the error in the 4E statements been brought to the Board's attention at the time, the Board would have taken the same or similar steps as were undertaken in December 2007 when the misclassification was ultimately found, including undertaking an independent investigation into whether Centro's liabilities were properly classified. 177 Further, it is important to appreciate that the liability judgment has attracted widespread publicity. The acts and omissions of the directors, as recorded in the liability judgment, have already been the subject of widespread public dissemination. Against such a backdrop of widespread public analysis and associated embarrassment and reputational damage for each of the directors, the need for the imposition of a disqualification order or pecuniary penalty for reasons of general deterrence is much less than it would otherwise be. The actions of the directors were not indicative of any wider lack of appreciation of the significance and demands of their role, and were isolated in the circumstances of this proceeding. 178 In considering whether the directors' contravening conduct caused harm to others (which is relevant to consideration of the seriousness of the contraventions), the effects of the GFC and Centro's difficulties refinancing its short-term liabilities that emerged in late 2007 are not to be equated with the effects of the contravening conduct. The evidence in this proceeding does not necessarily support any assumption being made that Centro's difficulties in refinancing its debt in November and December were caused by the understatement of CPL and CPT's current interest bearing liabilities in the order of $1.4 billion, the misrecording of approximately $500 million of CRT's debt as non-current rather than current, the omission of reference to the guarantees, or the deficiencies in the s 295A letter. For the purposes of the penalty hearing, the consequences of the contravening conduct may be assessed on the basis that the contraventions contributed to the market not having information that would have been relevant to making decisions regarding investment in CNP and CER securities. 179 Moreover, the Court has found that the advice given to the non-executive directors by Mr Scott and Mr Nenna at the relevant time would not have led them to hold any concerns about the Group's ability to raise debt or equity or the realisable value of its assets. 180 The question of contrition is a relevant factor. The directors acted as they did in good faith, and believing that they were discharging their duties properly. To the extent that they failed to discharge their duties, they have taken responsibility for their actions and expressed their regret that the errors were not identified. Some directors could have gone further in the way they expressed their remorse, but I am mindful that each director still faces litigation. I am satisfied each director realises that they failed in their responsibilities. I am satisfied that each director took his role and responsibility extremely seriously. They are professional men who care deeply about their reputations. For these particular defendants, declarations of contravention will have a significant adverse impact. 181 Further, and as is detailed in the affidavits of Mr Cooper and Mr Healey, and in the affidavit of Mr Maxsted (who is the Chairman of Transurban Group, holds numerous other directorships, worked with the Centro Group whilst CEO of KPMG, and provided affidavit evidence in support of the non-executive directors), the directors acted promptly, openly and responsibly when refinancing difficulties emerged in December 2007 and when the possible classification errors were identified in early 2008. Their post-contravention conduct (taken at a time before proceedings were brought or in contemplation) weighs favourably in the Court's consideration. 182 I also take into account the skill and abilities of the directors as company directors, and their future contribution to commercial life. 183 Further, there is no element on the part of any director of obtaining personal gain, flagrancy of the breach, impropriety (or consciousness of another's impropriety) or deceptiveness. 184 The conduct of the directors which this Court has found to be in contravention of their statutory duties was undertaken honestly and by intelligent, experienced and conscientious people. While this Court has found that their conduct fell short of what was required, they are not people from whom the public must be protected in the future. On the contrary, they were and remain men with valuable experience and skills of benefit to the public. Any disqualification order would have far-reaching consequences for their capacity to obtain engagement as directors of public companies in the future, and such would not be in the public interest. 185 There are additional factors to take into account supporting the non-executive directors: (a) each has a hitherto unblemished history as a director of a listed corporation - this is not a case where the contravening conduct is part of a larger pattern of reckless or illegal conduct from which the public requires protection; (b) while each has been found to have relied too heavily on management and expert auditors in being satisfied that the accounts were conforming, it is not likely that they will repeat conduct of this kind; (c) none of them sought to conceal the errors that were made but, on the contrary, took immediate and responsible steps to investigate and inform the market as soon as they were aware that the accounts of CPL, CPT and CRT may have misstated the current liabilities; and (d) supporting character evidence has been filed by highly respected public company directors who regard the non-executive directors as men of the highest calibre and who still have a valuable contribution to make to the financial world. 186 In considering the position of the non-executive directors, the Court needs to carefully consider is the need for a penalty sufficient to act as a general determent, but taking into account the many factors I have indicated in favour of the non-executive directors. 187 Contrary to the submissions of the non-executive directors, I do not consider this is a case where a mere warning 'not to do it again', without more, is appropriate. A judicial reprimand in the form of merely finding a contravention (without appropriate declarations) is not a substitute for punishment, and is not appropriate here. The Roman law prescribed moneat lex antequam puniat ("let the law warn before it punishes"). However, I do not regard the directors as being in any need of a warning. Each non-executive director had important responsibilities, should have known of their obligations and of the potential consequences of their failure to act in the way the Court has found was appropriate. 188 Nor do I consider that the position taken by ASIC is appropriate, particularly in relation to disqualification orders. If the orders I propose are sufficient for general deterrence (which I think they are), then in light of the evidence before the Court as to the contribution made and to be made by the non-executive directors to company boards, and the circumstances in which the contraventions occurred, to make a disqualification order is unnecessary and excessive. The punishment element (which a disqualification order encompasses), has already been inflicted by the failure to relieve from liability and the making of the declarations in light of the reputational damage already inflicted upon these particular directors. The reputational damage to the defendants, including the directors, and the effect it has and will have on them, cannot be underestimated in the case of these particular directors. 189 The question of whether to impose a pecuniary penalty in the range of $30,000 to $100,000 needs to be separately considered, particularly if no disqualification order is being made. It is unlikely the non-executive directors will offend again. I have no doubt a lesson has been learnt. From materials placed before the Court, it would appear that practices may have already changed in relation to corporate behaviour in dealing with financial statements by audit committees and boards following from the liability judgment, which each non-executive director is well aware. 190 If, as I consider, the making of the declarations is sufficient to be of general deterrence then no further penalty needs to be imposed, even taking into account the seriousness of the offences. Even in considering general deterrence, the penalty must be framed in light of the circumstances of the contraventions, including the single and isolated nature of the contraventions, and the fact that the non-executive directors acted conscientiously and honestly in otherwise carrying on their responsibilities. 191 Therefore, the appropriate course, which in my view will have a substantial impact on the non-executive directors, is to refuse the applications for relief from liability, and to make the declarations as sought by ASIC. I think this is sufficient to 'send the message' to the community that the Court strongly disapproves of the conduct giving rise to the contraventions, but at the same time is appreciative of the circumstances of the non-executive directors, the circumstances leading to the contraventions, and subsequent events. 192 I have also considered whether the non-executive directors should be treated differently as between each other, and whether there is a persuasive reason to differentiate between, for instance, the Chairman, or the members of BARMC, and the other non-executive directors. 193 There may well be good reason for so differentiating in other proceedings involving various members of a board. However, in this proceeding, ASIC focussed on treating the non-executive directors as all having the same care and responsibility. Whilst pleading each individual non-executive director's responsibilities and background, the proceeding was in essence one involving the Board as a whole having the same responsibility with respect to the financial statements. 194 Undoubtedly, the backgrounds of each non-executive director are different and there were different responsibilities placed upon each director. However, the part played by each non-executive director in the contravention of the Act as pleaded by ASIC, as one event, was the same with each non-executive director in their capacity as a director approving the financial statements on 6 September 2007. 195 As I have said, ASIC did not contend I should differentiate between the non-executive directors. The non-executive directors themselves did not direct any submissions as to there being any greater responsibility on any particular one non-executive director. 196 In these circumstances, I do not differentiate between the non-executive directors in considering the appropriate penalties.

The position of Mr Scott 197 There is also a great deal to say in favour of Mr Scott. There is no doubt Mr Scott was an outstanding executive involved in the Centro Group. 198 An indication of the extent to which Mr Scott devoted himself to the affairs of the Centro Group and his prodigious work ethic is illustrated by para [29] of his affidavit sworn 20 July 2011: I worked very hard to achieve and maintain the enormous and rapid growth of the Group, and to which I have referred. By mid 2007, and for many years previous, my average work day in my employment in the Group was as follows: (a) if I was in Melbourne, I would arrive at my office in Glen Waverley between 8:30am and 9:00am. I would leave the work place between 8:00pm to 9:00pm. At home, I usually worked from 10:30pm to 1:30am. Thus, I averaged and on week days, a 15 hour working period each day. At the weekend, I usually worked 10 hours on each of Saturday and Sunday. Thus, my normal working week averaged above 90 hours; (b) I spent about a third to half my time travelling during 2007, (and in the preceding years) as the group expanded internationally. My records show that over 50% of my work days (excluding weekends, public holidays and annual leave) were spent interstate or overseas. Usually, I travelled outside normal working hours; (c) Wherever I was, I generally received and considered 100 to 150 emails during each working day. I tried to process these promptly so that I maintained a one page inbox. Additionally, I received about 50 items each working day in "hard copy" form in my "in tray"; (d) I spent a large amount of time in meetings and at functions on Centro business, by way of example my records for July to September 2007 show that, each week, I spent an average of over 50 hours in formal meetings or functions. These averaged about 1.5 hours each. Board meetings would usually run from 8:30am to 5:00pm. By 2007, they ordinarily occupied two days with a follow up staff meeting afterwards. In addition to the formal meetings or functions, I had numerous non diarised meetings, about 10 per week, for an average duration of about half an hour; and (e) I estimate that I spent three plus hours each working day on the telephone. I spoke on the telephone to the group's employees (including those in the US or Europe), to the investment banks, the analysts, the fund managers, the investors, the professional advisors, and to those with whom the group did business. 199 Further, for many years, Centro's achievements under Mr Scott's leadership were worthy of praise. As Mr Scott recites in paragraphs [17] - [23] of his affidavit, the growth in the company and commensurate growth and returns to shareholders in the 10 year period from 1997 to mid 2007 was considerable: Soon after I was recruited in 1997, Centro converted to a stapled entity (stapling a company share and a trust unit). Between 1997 and 2007 the Group grew by 46% on a compounding annual basis. That is to say, Centro's owned and assets under management grew from $482 million to over $26.5 billion over the ten years that I was at the Group. The staff increased from about 130 to over 1,600. The number of shopping centres the Group owned or managed rose from less than 10 to over 800. Over the ten years that I was the CEO, our focus on delivering results to shareholders included an increase Centro's annual after tax profit from $20.4 million to over $335 million. In the decade to mid 2007, Centro had delivered a compound return of over 25% annually. Centro was then the highest returning Australian listed property trust for the prior decade. At its peak in 2007, Centro Properties Group, the main listed vehicle in the group, was one of the 50 biggest ASX listed companies based on its market capitalisation of over $8 billion. Centro was the largest landlord for each of Woolworths and Coles Myer. The Group became more and more complex. It grew to include more managed funds, syndicates, and two substantial listed entities. It also moved to acquire and to operate assets internationally, particularly in the United States where, by mid 2007, two thirds of its assets were located. During this period my key focus, and that of the board, was on optimising shareholder returns.. By 2007 as noted above, this was progressing well with the compound annual total returns of over 25% to Centro investors for the first ten years to mid 2007 that I was with the Group. At the time, Centro had delivered the highest returns of any Australian listed property trust or any real estate investment trust ("REIT") over each of three, five and ten years. By mid 2007, the Group was about 50 times the size it had been when I joined in 1997. It had become a large international business, the fifth biggest shopping centre owner/manager in the world's largest market, the US, as well as being the second largest Australian shopping centre owner/operator. In the then economic and financial environment, it was perceived by the markets as poised for greater things, and that is what I believed. Of course, that environment was irretrievably changed thereafter by the Global Financial Crisis ("GFC") in 2008." 200 None of the above evidence from Mr Scott was disputed in this proceeding. 201 It was also supported by others. For instance, the former chairman of Centro's Audit Committee, Mr Wilson (a director of the Centro Group from 1993 until December 2005) stated the following: The Centro Group business model developed at an excellent pace, and evolved very substantially due to the strategic vision and leadership demonstrated by Mr Scott, and his executive group as a highly competent and well led team. What in 1997 was a comparatively simple property investment model, additionally advanced into a more diverse unlisted syndicated array of retail property assets, extended its asset portfolio internationally, and further diversified during the early 2000s with the emergence of a series of managed funds based on a mix of retail property assets, both national and international. The business model featured initiatives new to the Australian retail property sector. It was several times recognised positively by business analysts in their media releases. Similarly, Mr Scott was more than once recognised in the business media for his excellent performance, and for the leadership he provided to Centro, and for the retail property industry. The entire period of my association under Mr Scott's leadership saw major growth and development, and, most importantly, and concurrently with that, major increments of growth in Centro unitholder value. Regrettably, the unexpected and inopportune global financial collapse brought that to an end, as it did with many other entities. 202 Whilst the Court has already found that Mr Scott is intelligent, experienced, conscientious and honest, other evidence supports this conclusion: (a) Mr Graham Terry (Centro's former COO) stated in support of Mr Scott: In addition to his exceptional business skills, I have at all times found him to be a completely honest and sincere man who was always dedicated to the company and obtaining the greatest success for it and the shareholders. I found him to be an extremely hard working individual who often worked in excess of 90 hours per week, including weekends. He worked tirelessly to achieve the goals he set for Centro and put his heart and soul into the company, often at great personal expense. (b) To similar effect Mr Michael Andrew said: During this time, Mr Scott, effectively, was the trustee for large amounts of money. He always handled himself with the utmost honesty and integrity. He ensured the highest ethical standards around our investment policy. A very good example was Mr Scott's reluctance in any way to promote the school's investment in his own business interests. He always sought to distance himself on an arm's length basis. Mr Scott was also one of our largest personal donors giving significant funds to the future educational needs of the schoolchildren. 203 Mr Scott's industry and contributions outside the work environment have been also referred to by Milton Cockburn and others, notably Ms Megan Hansen, in their evidence in support of Mr Scott. 204 Mr Michael Andrew supported Mr Scott in evidence before the Court. Mr Michael Andrew is presently the chairman of KPMG Australia and has recently been elected to become the global chairman of KPMG International. In these roles he has regularly attended audit committee meetings and has been engaged in the preparation of annual financial statements and has advised boards on best practice advice on corporate governance and ethical standards. In support of Mr Scott, Mr Andrew provided the following evidence: [8] … I was often a sounding board for matters involving Centro Properties… [9] One particular example I recall occurred following criticism from Corporate Governance experts. Mr Scott chose to personally refinance his own equity base at his own personal cost rather than rely on loans from the company. There was no compulsion on him to do this, but he did it as a matter of good practice and one that was of significant personal cost to Mr Scott. [10] Since the collapse of Centro, Mr Scott has shown great contrition and worked tirelessly to try and improve the company's prospects volunteering significant time at his own cost to try and add value to the company. [11] I know from a personal perspective the deep impact the Centro experience has had on Mr Scott, and on his family, and what a high personal price he has paid. Never, at any stage, has he sought to duck away from his responsibilities. Rather, he has sought to engage, and face up to, them. [12] In my professional judgment, Mr Scott is a dynamic individual of high integrity who relied, in hindsight, on many others to do the right thing. In my experience, Mr Scott is only too happy to be held accountable for his own actions. [13] Mr Scott was a financially literate, insightful and creative thinker who would always come up with new ideas and solutions. In hindsight, it is clear that Centro grew too quickly, and that it made strategic decisions around the business model of borrowing short-term funds to invest in long term and liquid properties without putting in place the proper internal control structures around the group. These were heady times for the property market and, again, in hindsight, it is clear that these factors forced the business model to fail once liquidity was restrained through the Global Financial Crisis. [14] Despite the administration of Centro, Mr Scott did not personally profit from the company. He sustained significant financial and personal reputational loss. He maintains a reputation for honesty and integrity, and I was pleased to see that the Court recognised that in its reasons for judgment. [15] Mr Scott is of good character, and I trust that this will be fully considered by the court in determining any sanctions from the hearing. 205 Mr Scott has described the impact of the relevant events in these proceedings on his reputation and employment prospects to date in his affidavit: [31] The proceedings have had a profound impact on me, my reputation and my ability to obtain any future employment. I believe that the possibility of future employment in my prior capabilities will be at best very difficult for me if not impossible... It is unlikely that any Board or business owner in areas of my prior experience (property, capital raising, etc) will employ as a senior manager an individual that has been found to have contravened the Corporations Act. [32] I was dismissed from Centro in January 2008. Since then, I have approached a recruitment firm and a number of business associates to seek out any employment or consulting opportunities. Initially, I was advised by the recruitment firm that it would probably be at least 18 months to 2 years after me leaving Centro before I could secure employment elsewhere. Later, after these proceedings had been commenced I was advised by a recruitment consultant that it would not be possible for me to seek alternative employment until the outcome of the ASIC proceedings became known. In any event, I have been applying all of my efforts to the ASIC case over the last year and would have not been able to work in full time employment in any event. As such, the existence of the ASIC proceedings has operated in a practical sense to bar me from seeking alternative employment or consulting opportunities. 206 To similar effect, another 'testimonial' stated the following: The ASIC proceedings have been devastating to this good man. Following his departure from Centro, Mr Scott and I often discussed what the future might hold. I recall feeling (and saying to him) that it was probable that work might be difficult to find for a couple of years but that, after that time, I was confident his skills, his abilities and the extraordinary performance he had been able to deliver over more than a decade, would see him readily employable, albeit it most probably in a private or charitable entity. (Colman affidavit paragraph 13) Being on the front page of newspapers as someone being prosecuted by ASIC has, I believe, removed this possibility for the past 2 years. (Colman affidavit paragraph 14). The last few years, I know, have been calamitous for Mr Scott. He had complete faith in Centro. In keeping with this view, he had most of his wealth in Centro, taking virtually all of his (sometimes not insubstantial) rewards and bonuses in Centro stock (as did most of his team). In the failure of the Centro group and in these proceedings it is probably fair to say that he has lost more as an individual than any other person; he has lost his career, most of his wealth and his future employability and business repute have been damaged substantially. (Colman affidavit paragraph 15). 207 It was submitted by Mr Scott that whilst he, unlike the other defendants, was a member of executive management, the case brought by ASIC against Mr Scott in this proceeding concentrated largely, if not exclusively, on Mr Scott as a director and not as CEO. Therefore, any penalty should be the same as the other directors. The knowledge said to have put Mr Scott on notice as to the errors in the accounts took the form of information provided in Board packs to each director and received by them in that capacity and resolutions passed at Board meetings at which Mr Scott (and all directors) were present. 208 It was further submitted that Mr Scott, whilst not a member of the BARMC, which had the responsibility under its charter of "monitoring compliance with applicable accounting standards" and assisting the board with discharging its responsibilities with respect to the financial statements, had responsibilities with respect to the accounts which may be viewed as being of a similar magnitude to that of the members of the audit committee. 209 Accordingly, it was submitted by Mr Scott that to the extent to which the Court determines that it is appropriate to discriminate in terms of penalty between the defendants, any penalty to be imposed upon Mr Scott should be on par with that imposed on the members of the audit committee. 210 In considering the position of Mr Scott, I have taken into account the matters that I considered in the case of the non-executive directors. I similarly reject Mr Scott's application for relief from liability. 211 Again, whatever other penalty is appropriate, a disqualification ban is not required, nor is it appropriate. As with the other directors, Mr Scott has made and will make a useful contribution to company boards. Mr Scott has abilities and skills, as with the other directors, that the public should not be deprived of in the future. The public needs no protection in the form of a disqualification ban in the case of Mr Scott. The principles relating to punishment, personal deterrence, and general deterrence will all be satisfied by declarations and the pecuniary penalty I have determined to impose. 212 However, I think Mr Scott is not in the same position as the non-executive directors, and I accept the submissions of ASIC in that regard. Unlike with the non-executive directors, ASIC does submit I should differentiate between Mr Scott and the other directors. 213 Whilst the observations I made in relation to the non-executive directors and the way ASIC presented its case are applicable to Mr Scott, Mr Scott was the managing director and ASIC did focus attention (albeit not primarily) on Mr Scott's role as CEO. Further, Mr Scott's involvement in the management representation letter was of a higher responsibility than that of the other directors. 214 Whilst I do not think that there is any likelihood of Mr Scott contravening again, I consider that the imposition of a penalty, even at the lower range, is appropriate as a general deterrent and as a further form of punishment.

The position of Mr Nenna 215 Mr Nenna admitted before trial each of the substantive breaches alleged against him, and it was not necessary for him to be represented at the trial. 216 Mr Nenna has accepted responsibility for his breaches and he does not oppose the making of declarations. Nor does he seek to be wholly exonerated for his conduct. 217 Mr Nenna submitted that the appropriate penalty in all the circumstances would be disqualification, together with a liability for costs. He submitted that the imposition of a pecuniary penalty is not necessary or appropriate. Alternatively, he submitted that he has acted honestly and, having regard to all the circumstances of the case, he should be relieved pursuant to ss 1317S and 1318 from any pecuniary liability which might otherwise be appropriate. 218 In particular, he submitted that: (a) any disqualification should be for a period of no more than two years; (b) he should not be subjected to or should be relieved entirely from any order that he pay a pecuniary penalty; and (c) he should be ordered to pay no more than a certain percentage of ASIC's costs.

Disqualification 219 Having regard to the relevance of general deterrence in considering a period of disqualification as emphasised by the Full Court of the Federal Court of Australia in Beekink, Mr Nenna accepted that the seriousness of the contraventions admitted by him justified a period of disqualification on general deterrence grounds. However, having regard to the four categories of important matters as distilled by Hargrave J in White, it was submitted that a disqualification of two years was sufficient in all the circumstances. 220 Taking in turn each of the four categories, it was submitted as follows: (1) The nature and seriousness of the contraventions: Mr Nenna accepted that the contraventions were serious. He accepted that supervising the completion of the financial statements and taking responsibility for their accuracy was one of his most important functions and his failure to detect the errors in the financial statements was a significant oversight with potentially very serious consequences. However, the contraventions were in the nature of omissions. In contrast to the conduct of the director in Beekink, for example, there was no element of deliberateness or intention in Mr Nenna's actions. Although his memory of events at the relevant time is poor, as best he can recall, he followed the same process of review of the accounts that he had undertaken in previous years, including a line by line review of the balance sheet. He accepted that he nevertheless missed the omission of current liabilities and cannot explain how this happened given the methodology that he used. This was not a case where, for example, Mr Nenna simply failed to review the financial statements or turned a blind eye to known errors or omissions. He has no recollection of his involvement in the non-disclosure of the guarantees. (2) Protection of the public: Having regard to Mr Nenna's current medical condition, and the wide publicity given to this matter, there was no realistic prospect of Mr Nenna returning to a role as CFO (or similar role) in a medium to large company or other enterprise in the near future. Should that position change, it was clear from the evidence adduced on behalf of Mr Nenna, including the testimonials that Mr Nenna is by nature a diligent and conscientious person who has a clear and detailed understanding of the proper role of a company officer holding the position of CFO and the duties of care and diligence that attend role. There was nothing about the impugned conduct of Mr Nenna that could suggest a propensity that he may engage in similar conduct in the future resulting in harm to the public. Mr Nenna has learnt a very hard lesson from the circumstances giving rise to the contraventions and the prospect of him engaging in similar conduct or indeed having the opportunity to do so is extremely remote. (3) Retribution and deterrence: The evidence (including the testimonials) strongly supported a positive finding by the Court that Mr Nenna acted honestly. He has done his best to explain how the contraventions occurred, including by giving detailed evidence of the extraordinary pressures he was under at the time and the factors that might have diverted his attention. (4) Mitigating factors: It was clear from the evidence that the circumstances giving rise to the contraventions and their aftermath have had a profound and lasting effect on Mr Nenna and his family. Mr Nenna has given evidence of his contrition and remorse, including by describing his feelings of "a crushing sense of guilt for my part in the catastrophic impact Centro's failure had wrought on investors, my work colleagues and all our employees". There can be no doubt that these feelings are heartfelt and genuine and have played a significant part in Mr Nenna's poor health, particularly during 2008 and into 2009. His contrition and remorse are reinforced by his decision to admit liability before trial and not to seek complete exoneration. These factors also independently justify a reduction in penalty. Mr Nenna has not gained in any way from his actions. The evidence is that he has suffered very substantial personal financial losses as a result both of the collapse of the Centro share price and the negotiated reduction in his termination entitlements. Mr Nenna's inadvertence was uncharacteristic for someone who took a careful and principled approach, demonstrated a high degree of knowledge and skill in his areas of particular expertise and acted with honesty and integrity. 221 I accept each of these submissions. The only further observation I make is this. Whether or not Mr Nenna acted 'honestly' as that term has come to be interpreted in the context of ss 1317S and 1318, (which interpretation I have accepted for the purposes of this proceeding), there is no doubt Mr Nenna is an honest person, and in no aspect behaved other than in good faith in acting as the CFO. As Mr Nenna accepts, it would be inappropriate to relieve Mr Nenna from all liability, and I do not consider he ought fairly to be excused having regard to the seriousness of the contraventions and Mr Nenna's role. 222 Therefore, accepting the submissions of Mr Nenna, I propose to make a disqualification order for two years. 223 The question then arises as to a pecuniary penalty. 224 Principally the imposition of a pecuniary penalty is to act as a personal deterrent and a deterrent to the general public against a repetition of like conduct, although as indicated above other factors are relevant, including punishment. However, the imposition of a penalty should be no greater than is necessary in order to achieve these objectives. Justice Gzell in MacDonald cited with approval the propositions developed by Santow J in Adler (at [364]). He added (at [365]): It must be remembered that a pecuniary penalty is an additional sanction and due consideration must be given to the effect of a declaration of contravention ... the level of seriousness must be such as to justify a superadded pecuniary penalty over other sanctions that include the very real prior sanction by way of reputational damage for a professional person of actually declaring a contravention to have occurred. 225 The imposition of a disqualification order, taken together with the declaration of contravention itself, is in the circumstances of this case sufficient to achieve the objective of general deterrence in the case of Mr Nenna. So far as punishment is concerned, once again the declaration of contravention and the disqualification are sufficient punishment, given both the nature of the contraventions and Mr Nenna's contrition and remorse, reinforced by his admissions. The evidence of the effect of the events on Mr Nenna's health, the difficulties faced by his family and his substantial personal financial losses, militate against the imposition of any further punitive orders. I do not consider that there is any likelihood of future contraventions by Mr Nenna. I do not propose to impose any pecuniary penalty in the case of Mr Nenna.

Mr Nenna's application under section 206G of the Act 226 Mr Nenna seeks to make application upon a disqualification order being made in this proceeding for the leave of the Court to manage the corporate trustee of his family's self managed superannuation fund (RGN Pty Ltd (ACN 121 327 183) and the corporate trustee of the services trust established in connection with his consulting business. A number of procedural issues have been canvassed by the parties in relation to this application. I propose to make the order for disqualification operative from 4.30pm on 10 October 2011 so that the application or any future application under s 206G can be considered by the Court.

COSTS 227 Normally any liability to pay costs as a result of an order for costs against the defendants would be a matter that could be relevantly taken into account in determining any penalty, either as a matter relevant to the financial circumstances of the defendant and his ability to pay a penalty, or as an element of the other consequences suffered by the defendant as a result of the contraventions: see eg Australian Securities and Investments Commission v Vines (2006) 58 ACSR 298 at [134]. 228 In this proceeding, the parties have agreed upon the appropriate costs order to make. In light of the insurance position of the defendants, it seems that the incidence of costs is not an important consideration in the imposition of a penalty. Therefore, I have treated costs as a neutral factor in my determination of the appropriate penalty to impose in this proceeding.

DISPOSITION 229 For the foregoing reasons, the Court makes the following declarations and orders:

Brian Healey THE COURT DECLARES THAT: 1. The first defendant, Brian Healey, contravened ss 344(1) and 180(1) of the Corporations Act 2001 (Cth) (the 'Act') in relation to Centro Properties Limited (CPL), by his conduct as a director of CPL on 6 September 2007, in participating in and voting in favour of a resolution to approve the annual financial report ('CPL Financial Report') and annual directors' report ('CPL Directors' Report') for the year ended 30 June 2007 ('CPL Reports') in circumstances where: (a) in breach of s 296 of the Act the CPL Financial Report did not comply with the accounting standards in that: (i) contrary to accounting standard AASB 101, interest bearing current liabilities of the consolidated entity totalling $1,514,097,581 were classified and shown in the financial statements as non-current liabilities; (ii) contrary to accounting standard AASB 110, the notes to the financial statements did not disclose that after the reporting date CPL had given the following guarantees of a material amount: A. Amended and Restated Guaranty Agreement ('Non-Recourse Carveouts') executed as of 31 July 2007 in favour of JPMorgan Chase Bank NA; B. Guaranty Agreement ('Payment') executed as of 31 July 2007 in favour of JPMorgan Chase Bank NA; C. Guaranty Agreement ('JPMCB') executed as of 5 August 2007 in favour of JPMorgan Chase Bank NA; D. Amended and Restated Guaranty Agreement executed as of 31 July 2007 in favour of Bank of America, NA; ('Relevant Guarantees'); (b) in breach of s 297 of the Act, the financial statements and notes in the CPL Financial Report did not give a true and fair view of the financial position of the consolidated entity in that: (i) the financial statements and notes represented that the interest bearing current liabilities of the consolidated entity were $1,096,936,000 when in fact the current liabilities of the consolidated entity were $2,611,033,581; (ii) the notes did not disclose the fact that CPL had given the Relevant Guarantees; (c) in breach of s 298 of the Act, CPL Directors' Report did not give details of the Relevant Guarantees when those details were required to be given in the report by ss 299(1)(d) and 299A of the Act; (d) he knew or ought to have known that: (i) the interest bearing current liabilities of the consolidated entity were substantially in excess of $1,096,093,000; (ii) CPL had given the Relevant Guarantees; (e) he ought to have known that the CPL Reports did not comply with the Act in the manner described in paragraphs (a), (b) and (c) above; when prior to his participating in and voting on the resolution: (f) he failed to properly read, understand and give sufficient attention to the content of the CPL Reports in so far as they related to: (i) the classification of liabilities as either current or non-current; (ii) the disclosure of the Relevant Guarantees; (g) he failed to consider or properly consider the content of the CPL Reports in so far as they related to: (i) the classification of liabilities as either current or non-current; (ii) the disclosure of the Relevant Guarantees; (h) he failed to raise or make enquiry or adequate enquiry with management, the Board Audit and Risk Management Committee and other members of the Board concerning: (i) the apparent failure of the CPL Financial Reports to properly classify current and non-current liabilities; (ii) the apparent failure of the CPL Reports to properly disclose the Relevant Guarantees; (i) he failed to have the apparent failures with respect to the CPL Reports corrected; (j) he failed: (i) to take the necessary steps to ensure he had a sufficient knowledge of the requirements of s 295A of the Act; (ii) to read, understand and give sufficient attention to the management representation letter provided to the directors; (iii) to request that the directors be given a declaration pursuant to s 295A of the Act which accords with its requirements; (k) the directors had not been given a declaration pursuant to s 295A of the Act; and thereby: (l) failed to take all reasonable steps to secure compliance by CPL with ss 295A, 296, 297 and 298 of the Act; and (m) failed to exercise the degree of care and diligence required by s 180(1) by failing to take each of the steps referred to in paragraphs 1(f) to 1(k) above in the course of his review of the CPL Reports. 2. The first defendant, Brian Healey, contravened s 601FD(3) of the Act in relation to Centro Property Trust ('CPT'), by his conduct on 6 September 2007 as an officer of CPT Manager Limited ('CPTM'), the responsible entity of CPT, in participating in and voting in favour of a resolution to approve the annual financial report ('CPT Financial Report') and annual directors' report ('CPT Directors' Report') for the year ended 30 June 2007 ('CPT Reports') in circumstances where: (a) in breach of s 296 of the Act the CPT Financial Report did not comply with the accounting standards in that: (i) contrary to accounting standard AASB 101, interest bearing current liabilities of the consolidated entity totalling $1,514,097,581 were classified and shown in the financial statements as non-current liabilities; (ii) contrary to accounting standard AASB 110, the notes to the financial statements did not disclose that after the reporting date CPTM as responsible entity of CPT had given the Relevant Guarantees; (b) in breach of s 297 of the Act, the financial statements and notes in the CPT Financial Report did not give a true and fair view of the financial position of the consolidated entity in that: (i) the financial statements represented that the interest bearing current liabilities of the consolidated entity were $1,096,936,000 when in fact the current liabilities of the consolidated entity were $2,611,033,581; (ii) contrary to accounting standard AASB 110, the notes to the financial statements did not disclose that after the reporting date CPTM as responsible entity of CPT had given the following guarantees of a material amount: A. Amended and Restated Guaranty Agreement ('Non-Recourse Carveouts') executed as of 31 July 2007 in favour of JPMorgan Chase Bank NA; B. Guaranty Agreement ('Payment') executed as of 31 July 2007 in favour of JPMorgan Chase Bank NA; C. Guaranty Agreement ('JPMCB') executed as of 5 August 2007 in favour of JPMorgan Chase Bank NA; D. Amended and Restated Guaranty Agreement executed as of 31 July 2007 in favour of Bank of America, NA; ('Relevant Guarantees'); (c) in breach of s 298 of the Act, the CPT Directors' Report did not give details of the Relevant Guarantees when those details were required to be given in the report by ss 299(1)(d) and 299A of the Act; (d) he knew or ought to have known that: (i) the interest bearing current liabilities of the consolidated entity were substantially in excess of $1,096,093,000; (ii) CPTM had given the Relevant Guarantees; (e) he ought to have known that the CPT Reports did not comply with the Act in the manner described in paragraphs (a),(b) and (c) above; when prior to his participating in and voting on the resolution: (f) he failed to properly read, understand and give sufficient attention to the content of the CPT Reports in so far as they related to: (i) the classification of liabilities as either current or non-current; (ii) the disclosure of the Relevant Guarantees; (g) he failed to consider or properly consider the content of the CPT Reports in so far as they related to: (i) the classification of liabilities as either current or non-current; (ii) the disclosure of the Relevant Guarantees; (h) he failed to raise or make enquiry or adequate enquiry with management, the Board Audit and Risk Management Committee and other members of the Board concerning: (i) the apparent failure of the CPT Financial Report to properly classify current and non-current liabilities; (ii) the apparent failure of the CPT Reports to properly disclose the Relevant Guarantees; (i) he failed to have the apparent failures with respect to the CPT Reports corrected; (j) he failed: (i) to take the necessary steps to ensure he had a sufficient knowledge of the requirements of s 295A of the Act; (ii) to read, understand and give sufficient attention to the management representation letter provided to the directors; (iii) to request that the directors be given a declaration pursuant to s 295A of the Act which accords with its requirements; (k) the directors had not been given a declaration pursuant to s 295A of the Act; and thereby: (l) contrary to s 601FD(1)(f) of the Act, failed to take all steps that a reasonable person in his position would take to ensure compliance by CPTM with ss 295A, 296, 297 and 298 of the Act; (m) failed to exercise the degree of care and diligence required by s 601FD(1)(b) of the Act by failing to take each of the steps referred to in paragraphs 2(f) to 2(k) above in the course of his review of the CPT Reports. 3. The first defendant, Brian Healey, contravened s 601FD(3) of the Act in relation to Centro Retail Trust ('CRT') by his conduct on 6 September 2007 as an officer of Centro MCS Manager Limited ('CMCSM'), the responsible entity of CRT, in participating in and voting in favour of a resolution to approve the annual financial report of CRT for the year ended 30 June 2007 ('CRT Financial Report') in circumstances where: (a) in breach of s 296 of the Act the CRT Financial Report did not comply with the accounting standards in that contrary to accounting standard AASB 101, interest bearing current liabilities of the consolidated entity totalling $598,292,097 were classified and shown in the financial statements as non-current liabilities; (b) in breach of s 297 of the Act, the financial statements and notes in the CRT Financial Report did not give a true and fair view of the financial position of the consolidated entity in that the financial statements and notes represented that the interest bearing current liabilities of the consolidated entity were zero when in fact the interest bearing current liabilities of the consolidated entity were $598,292,097; (c) he knew or ought to have known that the interest bearing current liabilities of the consolidated entity were substantially in excess of zero; (d) he ought to have known that the CRT Financial Report did not comply with the Act in the manner described in paragraphs (a) and (b) above; when prior to his participating in and voting on the resolution; (e) he failed to properly read, understand and give sufficient attention to the content of the CRT Financial Report in so far as it related to the classification of liabilities as either current or non-current; (f) he failed to consider or properly consider the content of the CRT Financial Report in so far as it related to the classification of liabilities as either current or non-current; (g) he failed to raise or make enquiry or adequate enquiry with management, the Board Audit and Risk Management Committee and other members of the Board concerning the apparent failure of the CRT Financial Report to properly classify current and non-current liabilities; (h) he failed to have the apparent failure with respect to the CRT Financial Report corrected; (i) he failed: (i) to take the necessary steps to ensure he had a sufficient knowledge of the requirements of s 295A; (ii) to read, understand and give sufficient attention to the management representation letter provided to the directors; (iii) to request that the directors be given a declaration pursuant to s 295A of the Act which accords with its requirements; (j) the directors had not been given a declaration pursuant to s 295A of the Act; and thereby: (k) contrary to s 601FD(1)(f) of the Act, failed to take all steps that a reasonable person would take if they were in his position to ensure compliance by CMCSM with ss 295A, 296, 297 and 298 of the Act; and (l) failed to exercise the degree of care and diligence required by s 601FD(1)(b) of the Act by failing to take each of the steps referred to in paragraphs 3(e) to 3(j) above in the course of his review of the CRT Financial Report. AND THE COURT ORDERS THAT: 4. The first defendant's application for relief from liability brought pursuant to ss 1317S and 1318 of the Corporations Act 2001 (Cth) is dismissed. 5. The first defendant pay: (a) one-eighth of the plaintiff's costs (including reserved costs) of and incidental to this proceeding (other than the costs referred to in paragraph (b)); and (b) one-seventh of the plaintiff's costs (including reserved costs) of and incidental to this proceeding incurred on and after 4 April 2011 up to and including 27 May 2011.

Andrew Thomas Scott THE COURT DECLARES THAT: 1. The second defendant, Andrew Thomas Scott, contravened ss 344(1) and 180(1) of the Corporations Act 2001 (Cth) ('the Act') in relation to Centro Properties Limited ('CPL'), by his conduct as a director of CPL on 6 September 2007, in participating in and voting in favour of a resolution to approve the annual financial report ('CPL Financial Report') and annual directors' report ('CPL Directors' Report') for the year ended 30 June 2007 ('CPL Reports') in circumstances where: (a) in breach of s 296 of the Act the CPL Financial Report did not comply with the accounting standards in that: (i) contrary to accounting standard AASB 101, interest bearing current liabilities of the consolidated entity totalling $1,514,097,581 were classified and shown in the financial statements as non-current liabilities; (ii) contrary to accounting standard AASB 110, the notes to the financial statements did not disclose that after the reporting date CPL had given the following guarantees of a material amount: A. Amended and Restated Guaranty Agreement ('Non-Recourse Carveouts') executed as of 31 July 2007 in favour of JPMorgan Chase Bank NA; B. Guaranty Agreement ('Payment') executed as of 31 July 2007 in favour of JPMorgan Chase Bank NA; C. Guaranty Agreement ('JPMCB') executed as of 5 August 2007 in favour of JPMorgan Chase Bank NA; D. Amended and Restated Guaranty Agreement executed as of 31 July 2007 in favour of Bank of America, NA; ('Relevant Guarantees'); (b) in breach of s 297 of the Act, the financial statements and notes in the CPL Financial Report did not give a true and fair view of the financial position of the consolidated entity in that: (i) the financial statements and notes represented that the interest bearing current liabilities of the consolidated entity were $1,096,936,000 when in fact the current liabilities of the consolidated entity were $2,611,033,581; (ii) the notes did not disclose the fact that CPL had given the Relevant Guarantees; (c) in breach of section 298 of the Act, CPL Directors' Report did not give details of the Relevant Guarantees when those details were required to be given in the report by sections 299(1)(d) and 299A of the Act; (d) he knew or ought to have known that: (i) the interest bearing current liabilities of the consolidated entity were substantially in excess of $1,096,093,000; (ii) CPL had given the Relevant Guarantees; (e) he ought to have known that the CPL Reports did not comply with the Act in the manner described in paragraphs (a), (b) and (c) above; when prior to his participating in and voting on the resolution: (f) he failed to properly read, understand and give sufficient attention to the content of the CPL Reports in so far as they related to: (i) the classification of liabilities as either current or non-current; (ii) the disclosure of the Relevant Guarantees; (g) he failed to consider or properly consider the content of the CPL Reports in so far as they related to: (i) the classification of liabilities as either current or non-current; (ii) the disclosure of the Relevant Guarantees; (h) he failed to raise or make enquiry or adequate enquiry with management, the Board Audit and Risk Management Committee and other members of the Board concerning: (i) the apparent failure of the CPL Financial Reports to properly classify current and non-current liabilities; (ii) the apparent failure of the CPL Reports to properly disclose the Relevant Guarantees; (i) he failed to have the apparent failures with respect to the CPL Reports corrected; (j) he failed: (i) to take the necessary steps to ensure he had a sufficient knowledge of the requirements of s 295A of the Act; (ii) to read, understand and give sufficient attention to the management representation letter provided to the directors; (iii) to request that the directors be given a declaration pursuant to s 295A of the Act which accords with its requirements; (k) the directors had not been given a declaration pursuant to s 295A of the Act; and thereby: (l) failed to take all reasonable steps to secure compliance by CPL with ss 295A, 296, 297 and 298 of the Act; and (m) failed to exercise the degree of care and diligence required by s 180(1) by failing to take each of the steps referred to in paragraphs 1(f) to 1(k) above in the course of his review of the CPL Reports. 2. The second defendant, Andrew Thomas Scott, contravened s 601FD(3) of the Corporations Act 2001 (Act) in relation to Centro Property Trust ('CPT'), by his conduct on 6 September 2007 as an officer of CPT Manager Limited ('CPTM'), the responsible entity of CPT, in participating in and voting in favour of a resolution to approve the annual financial report ('CPT Financial Report') and annual directors' report ('CPT Directors' Report') for the year ended 30 June 2007 ('CPT Reports') in circumstances where: (a) in breach of s 296 of the Act the CPT Financial Report did not comply with the accounting standards in that: (i) contrary to accounting standard AASB 101, interest bearing current liabilities of the consolidated entity totalling $1,514,097,581 were classified and shown in the financial statements as non-current liabilities; (ii) contrary to accounting standard AASB 110, the notes to the financial statements did not disclose that after the reporting date CPTM as responsible entity of CPT had given the Relevant Guarantees; (b) in breach of s 297 of the Act, the financial statements and notes in the CPT Financial Report did not give a true and fair view of the financial position of the consolidated entity in that: (i) the financial statements represented that the interest bearing current liabilities of the consolidated entity were $1,096,936,000 when in fact the current liabilities of the consolidated entity were $2,611,033,581; (ii) contrary to accounting standard AASB 110, the notes to the financial statements did not disclose that after the reporting date CPTM as responsible entity of CPT had given the following guarantees of a material amount: A. Amended and Restated Guaranty Agreement ('Non-Recourse Carveouts') executed as of 31 July 2007 in favour of JPMorgan Chase Bank NA; B. Guaranty Agreement ('Payment') executed as of 31 July 2007 in favour of JPMorgan Chase Bank NA; C. Guaranty Agreement ('JPMCB') executed as of 5 August 2007 in favour of JPMorgan Chase Bank NA; D. Amended and Restated Guaranty Agreement executed as of 31 July 2007 in favour of Bank of America, NA; ('Relevant Guarantees'); (c) in breach of s 298 of the Act, the CPT Directors' Report did not give details of the Relevant Guarantees when those details were required to be given in the report by ss 299(1)(d) and 299A of the Act; (d) he knew or ought to have known that: (i) the interest bearing current liabilities of the consolidated entity were substantially in excess of $1,096,093,000; (ii) CPTM had given the Relevant Guarantees; (e) he ought to have known that the CPT Reports did not comply with the Act in the manner described in paragraphs (a), (b) and (c) above; when prior to his participating in and voting on the resolution: (f) he failed to properly read, understand and give sufficient attention to the content of the CPT Reports in so far as they related to: (i) the classification of liabilities as either current or non-current; (ii) the disclosure of the Relevant Guarantees; (g) he failed to consider or properly consider the content of the CPT Reports in so far as they related to: (i) the classification of liabilities as either current or non-current; (ii) the disclosure of the Relevant Guarantees; (h) he failed to raise or make enquiry or adequate enquiry with management, the Board Audit and Risk Management Committee and other members of the Board concerning: (i) the apparent failure of the CPT Financial Report to properly classify current and non-current liabilities; (ii) the apparent failure of the CPT Reports to properly disclose the Relevant Guarantees; (i) he failed to have the apparent failures with respect to the CPT Reports corrected; (j) he failed: (i) to take the necessary steps to ensure he had a sufficient knowledge of the requirements of s 295A of the Act; (ii) to read, understand and give sufficient attention to the management representation letter provided to the directors; (iii) to request that the directors be given a declaration pursuant to s 295A of the Act which accords with its requirements; (k) the directors had not been given a declaration pursuant to s 295A of the Act; and thereby: (l) contrary to s 601FD(1)(f) of the Act, failed to take all steps that a reasonable person in his position would take to ensure compliance by CPTM with ss 295A, 296, 297 and 298 of the Act; (m) failed to exercise the degree of care and diligence required by s 601FD(1)(b) of the Act by failing to take each of the steps referred to in paragraphs 2(f) to 2(k) above in the course of his review of the CPT Reports. 3. The second defendant, Andrew Thomas Scott, contravened s 601FD(3) of the Act in relation to Centro Retail Trust ('CRT') by his conduct on 6 September 2007 as an officer of Centro MCS Manager Limited ('CMCSM'), the responsible entity of CRT, in participating in and voting in favour of a resolution to approve the annual financial report of CRT for the year ended 30 June 2007 ('CRT Financial Report') in circumstances where: (a) in breach of s 296 of the Act the CRT Financial Report did not comply with the accounting standards in that contrary to accounting standard AASB 101, interest bearing current liabilities of the consolidated entity totalling $598,292,097 were classified and shown in the financial statements as non-current liabilities; (b) in breach of section 297 of the Act, the financial statements and notes in the CRT Financial Report did not give a true and fair view of the financial position of the consolidated entity in that the financial statements and notes represented that the interest bearing current liabilities of the consolidated entity were zero when in fact the interest bearing current liabilities of the consolidated entity were $598,292,097; (c) he knew or ought to have known that the interest bearing current liabilities of the consolidated entity were substantially in excess of zero; (d) he ought to have known that the CRT Financial Report did not comply with the Act in the manner described in paragraphs (a) and (b) above; when prior to his participating in and voting on the resolution: (e) he failed to properly read, understand and give sufficient attention to the content of the CRT Financial Report in so far as it related to the classification of liabilities as either current or non-current; (f) he failed to consider or properly consider the content of the CRT Financial Report in so far as it related to the classification of liabilities as either current or non-current; (g) he failed to raise or make enquiry or adequate enquiry with management, the Board Audit and Risk Management Committee and other members of the Board concerning the apparent failure of the CRT Financial Report to properly classify current and non-current liabilities; (h) he failed to have the apparent failure with respect to the CRT Financial Report corrected; (i) he failed: (i) to take the necessary steps to ensure he had a sufficient knowledge of the requirements of s 295A of the Act; (ii) to read, understand and give sufficient attention to the management representation letter provided to the directors; (iii) to request that the directors be given a declaration pursuant to s 295A of the Act which accords with its requirements; (j) the directors had not been given a declaration pursuant to s 295A of the Act; and thereby: (k) contrary to s 601FD(1)(f) of the Act, failed to take all steps that a reasonable person would take if they were in his position to ensure compliance by CMCSM with ss 295A, 296, 297 and 298 of the Act; and (l) failed to exercise the degree of care and diligence required by s 601FD(1)(b) of the Act by failing to take each of the steps referred to in paragraphs 3(e) to 3(j) above in the course of his review of the CRT Financial Report. AND THE COURT ORDERS THAT: 4. The second defendant's application for relief from liability brought pursuant to ss 1317S and 1318 of the Corporations Act 2001 (Cth) is dismissed. 5. The second defendant pay to the Commonwealth a penalty in the amount of $30,000. 6. The second defendant pay: (a) one-eighth of the plaintiff's costs (including reserved costs) of and incidental to this proceeding (other than the costs referred to in paragraph (b)); and (b) one-seventh of the plaintiff's costs (including reserved costs) of and incidental to this proceeding incurred on and after 4 April 2011 up to and including 27 May 2011.

Samuel Kavourakis THE COURT DECLARES THAT: 1. The third defendant, Samuel Kavourakis, contravened ss 344(1) and 180(1) of the Corporations Act 2001 ('the Act') in relation to Centro Properties Limited ('CPL'), by his conduct as a director of CPL on 6 September 2007, in participating in and voting in favour of a resolution to approve the annual financial report ('CPL Financial Report') and annual directors' report ('CPL Directors' Report') for the year ended 30 June 2007 ('CPL Reports') in circumstances where: (a) in breach of s 296 of the Act the CPL Financial Report did not comply with the accounting standards in that: (i) contrary to accounting standard AASB 101, interest bearing current liabilities of the consolidated entity totalling $1,514,097,581 were classified and shown in the financial statements as non-current liabilities; (ii) contrary to accounting standard AASB 110, the notes to the financial statements did not disclose that after the reporting date CPL had given the following guarantees of a material amount: A. Amended and Restated Guaranty Agreement ('Non-Recourse Carveouts') executed as of 31 July 2007 in favour of JPMorgan Chase Bank NA; B. Guaranty Agreement ('Payment') executed as of 31 July 2007 in favour of JPMorgan Chase Bank NA; C. Guaranty Agreement ('JPMCB') executed as of 5 August 2007 in favour of JPMorgan Chase Bank NA; D. Amended and Restated Guaranty Agreement executed as of 31 July 2007 in favour of Bank of America, NA; ('Relevant Guarantees'); (b) in breach of s 297 of the Act, the financial statements and notes in the CPL Financial Report did not give a true and fair view of the financial position of the consolidated entity in that: (i) the financial statements and notes represented that the interest bearing current liabilities of the consolidated entity were $1,096,936,000 when in fact the current liabilities of the consolidated entity were $2,611,033,581; (ii) the notes did not disclose the fact that CPL had given the Relevant Guarantees; (c) in breach of s 298 of the Act, CPL Directors' Report did not give details of the Relevant Guarantees when those details were required to be given in the report by ss 299(1)(d) and 299A of the Act; (d) he knew or ought to have known that: (i) the interest bearing current liabilities of the consolidated entity were substantially in excess of $1,096,093,000; (ii) CPL had given the Relevant Guarantees; (e) he ought to have known that the CPL Reports did not comply with the Act in the manner described in paragraphs (a), (b) and (c) above; when prior to his participating in and voting on the resolution: (f) he failed to properly read, understand and give sufficient attention to the content of the CPL Reports in so far as they related to: (i) the classification of liabilities as either current or non-current; (ii) the disclosure of the Relevant Guarantees; (g) he failed to consider or properly consider the content of the CPL Reports in so far as they related to: (i) the classification of liabilities as either current or non-current; (ii) the disclosure of the Relevant Guarantees; (h) he failed to raise or make enquiry or adequate enquiry with management, the Board Audit and Risk Management Committee and other members of the Board concerning: (i) the apparent failure of the CPL Financial Reports to properly classify current and non-current liabilities; (ii) the apparent failure of the CPL Reports to properly disclose the Relevant Guarantees; (i) he failed to have the apparent failures with respect to the CPL Reports corrected; (j) he failed: (i) to take the necessary steps to ensure he had a sufficient knowledge of the requirements of s 295A of the Act; (ii) to read, understand and give sufficient attention to the management representation letter provided to the directors; (iii) to request that the directors be given a declaration pursuant to s 295A of the Act which accords with its requirements; (k) the directors had not been given a declaration pursuant to s 295A of the Act; and thereby: (l) failed to take all reasonable steps to secure compliance by CPL with ss 295A, 296, 297 and 298 of the Act; and (m) failed to exercise the degree of care and diligence required by s 180(1) by failing to take each of the steps referred to in paragraphs 1(f) to 1(k) above in the course of his review of the CPL Reports. 2. The third defendant, Samuel Kavourakis, contravened s 601FD(3) of the Act in relation to Centro Property Trust ('CPT'), by his conduct on 6 September 2007 as an officer of CPT Manager Limited ('CPTM'), the responsible entity of CPT, in participating in and voting in favour of a resolution to approve the annual financial report ('CPT Financial Report') and annual directors' report ('CPT Directors' Report') for the year ended 30 June 2007 ('CPT Reports') in circumstances where: (a) in breach of s 296 of the Act the CPT Financial Report did not comply with the accounting standards in that: (i) contrary to accounting standard AASB 101, interest bearing current liabilities of the consolidated entity totalling $1,514,097,581 were classified and shown in the financial statements as non-current liabilities; (ii) contrary to accounting standard AASB 110, the notes to the financial statements did not disclose that after the reporting date CPTM as responsible entity of CPT had given the Relevant Guarantees; (b) in breach of s 297 of the Act, the financial statements and notes in the CPT Financial Report did not give a true and fair view of the financial position of the consolidated entity in that: (i) the financial statements represented that the interest bearing current liabilities of the consolidated entity were $1,096,936,000 when in fact the current liabilities of the consolidated entity were $2,611,033,581; (ii) contrary to accounting standard AASB 110, the notes to the financial statements did not disclose that after the reporting date CPTM as responsible entity of CPT had given the following guarantees of a material amount: A. Amended and Restated Guaranty Agreement ('Non-Recourse Carveouts') executed as of 31 July 2007 in favour of JPMorgan Chase Bank NA; B. Guaranty Agreement ('Payment') executed as of 31 July 2007 in favour of JPMorgan Chase Bank NA; C. Guaranty Agreement ('JPMCB') executed as of 5 August 2007 in favour of JPMorgan Chase Bank NA; D. Amended and Restated Guaranty Agreement executed as of 31 July 2007 in favour of Bank of America, NA; ('Relevant Guarantees'); (c) in breach of s 298 of the Act, the CPT Directors' Report did not give details of the Relevant Guarantees when those details were required to be given in the report by ss 299(1)(d) and 299A of the Act; (d) he knew or ought to have known that: (i) the interest bearing current liabilities of the consolidated entity were substantially in excess of $1,096,093,000; (ii) CPTM had given the Relevant Guarantees; (e) he ought to have known that the CPT Reports did not comply with the Act in the manner described in paragraphs (a),(b) and (c) above; when prior to his participating in and voting on the resolution: (f) he failed to properly read, understand and give sufficient attention to the content of the CPT Reports in so far as they related to: (i) the classification of liabilities as either current or non-current; (ii) the disclosure of the Relevant Guarantees; (g) he failed to consider or properly consider the content of the CPT Reports in so far as they related to: (i) the classification of liabilities as either current or non-current; (ii) the disclosure of the Relevant Guarantees; (h) he failed to raise or make enquiry or adequate enquiry with management, the Board Audit and Risk Management Committee and other members of the Board concerning: (i) the apparent failure of the CPT Financial Report to properly classify current and non-current liabilities; (ii) the apparent failure of the CPT Reports to properly disclose the Relevant Guarantees; (i) he failed to have the apparent failures with respect to the CPT Reports corrected; (j) he failed: (i) to take the necessary steps to ensure he had a sufficient knowledge of the requirements of s 295A of the Act; (ii) to read, understand and give sufficient attention to the management representation letter provided to the directors; (iii) to request that the directors be given a declaration pursuant to s 295A of the Act which accords with its requirements; (k) the directors had not been given a declaration pursuant to s 295A of the Act; and thereby: (l) contrary to s 601FD(1)(f) of the Act, failed to take all steps that a reasonable person in his position would take to ensure compliance by CPTM with ss 295A, 296, 297 and 298 of the Act; (m) failed to exercise the degree of care and diligence required by s 601FD(1)(b) of the Act by failing to take each of the steps referred to in paragraphs 2(f) to 2(k) above in the course of his review of the CPT Reports. 3. The third defendant, Samuel Kavourakis, contravened s 601FD(3) of the Act in relation to Centro Retail Trust ('CRT') by his conduct on 6 September 2007 as an officer of Centro MCS Manager Limited ('CMCSM'), the responsible entity of CRT, in participating in and voting in favour of a resolution to approve the annual financial report of CRT for the year ended 30 June 2007 ('CRT Financial Report') in circumstances where: (a) in breach of s 296 of the Act the CRT Financial Report did not comply with the accounting standards in that contrary to accounting standard AASB 101, interest bearing current liabilities of the consolidated entity totalling $598,292,097 were classified and shown in the financial statements as non-current liabilities; (b) in breach of section 297 of the Act, the financial statements and notes in the CRT Financial Report did not give a true and fair view of the financial position of the consolidated entity in that the financial statements and notes represented that the interest bearing current liabilities of the consolidated entity were zero when in fact the interest bearing current liabilities of the consolidated entity were $598,292,097; (c) he knew or ought to have known that the interest bearing current liabilities of the consolidated entity were substantially in excess of zero; (d) he ought to have known that the CRT Financial Report did not comply with the Act in the manner described in paragraphs (a) and (b) above; when prior to his participating in and voting on the resolution: (e) he failed to properly read, understand and give sufficient attention to the content of the CRT Financial Report in so far as it related to the classification of liabilities as either current or non-current; (f) he failed to consider or properly consider the content of the CRT Financial Report in so far as it related to the classification of liabilities as either current or non-current; (g) he failed to raise or make enquiry or adequate enquiry with management, the Board Audit and Risk Management Committee and other members of the Board concerning the apparent failure of the CRT Financial Report to properly classify current and non-current liabilities; (h) he failed to have the apparent failure with respect to the CRT Financial Report corrected; (i) he failed: (i) to take the necessary steps to ensure he had a sufficient knowledge of the requirements of s 295A; (ii) to read, understand and give sufficient attention to the management representation letter provided to the directors; (iii) to request that the directors be given a declaration pursuant to s 295A of the Act which accords with its requirements; (j) the directors had not been given a declaration pursuant to s 295A of the Act; and thereby: (k) contrary to s 601FD(1)(f) of the Act, failed to take all steps that a reasonable person would take if they were in his position to ensure compliance by CMCSM with ss 295A, 296, 297 and 298 of the Act; and (l) failed to exercise the degree of care and diligence required by s 601FD(1)(b) of the Act by failing to take each of the steps referred to in paragraphs 3(e) to 3(j) above in the course of his review of the CRT Financial Report. AND THE COURT ORDERS THAT: 4. The third defendant's application for relief from liability brought pursuant to ss 1317S and 1318 of the Corporations Act 2001 (Cth) is dismissed. 5. The third defendant pay: (a) one-eighth of the plaintiff's costs (including reserved costs) of and incidental to this proceeding (other than the costs referred to in paragraph (b)); and (b) one-seventh of the plaintiff's costs (including reserved costs) of and incidental to this proceeding incurred on and after 4 April 2011 up to and including 27 May 2011.

James William Hall THE COURT DECLARES THAT: 1. The fourth defendant, James William Hall, contravened ss 344(1) and 180(1) of the Corporations Act 2001 ('the Act') in relation to Centro Properties Limited ('CPL'), by his conduct as a director of CPL on 6 September 2007, in participating in and voting in favour of a resolution to approve the annual financial report ('CPL Financial Report') and annual directors' report ('CPL Directors' Report') for the year ended 30 June 2007 ('CPL Reports') in circumstances where: (a) in breach of s 296 of the Act the CPL Financial Report did not comply with the accounting standards in that: (i) contrary to accounting standard AASB 101, interest bearing current liabilities of the consolidated entity totalling $1,514,097,581 were classified and shown in the financial statements as non-current liabilities; (ii) contrary to accounting standard AASB 110, the notes to the financial statements did not disclose that after the reporting date CPL had given the following guarantees of a material amount: A. Amended and Restated Guaranty Agreement ('Non-Recourse Carveouts') executed as of 31 July 2007 in favour of JPMorgan Chase Bank NA; B. Guaranty Agreement ('Payment') executed as of 31 July 2007 in favour of JPMorgan Chase Bank NA; C. Guaranty Agreement ('JPMCB') executed as of 5 August 2007 in favour of JPMorgan Chase Bank NA; D. Amended and Restated Guaranty Agreement executed as of 31 July 2007 in favour of Bank of America, NA; ('Relevant Guarantees'); (b) in breach of s 297 of the Act, the financial statements and notes in the CPL Financial Report did not give a true and fair view of the financial position of the consolidated entity in that: (i) the financial statements and notes represented that the interest bearing current liabilities of the consolidated entity were $1,096,936,000 when in fact the current liabilities of the consolidated entity were $2,611,033,581; (ii) the notes did not disclose the fact that CPL had given the Relevant Guarantees; (c) in breach of s 298 of the Act, CPL Directors' Report did not give details of the Relevant Guarantees when those details were required to be given in the report by ss 299(1)(d) and 299A of the Act; (d) he knew or ought to have known that: (i) the interest bearing current liabilities of the consolidated entity were substantially in excess of $1,096,093,000; (ii) CPL had given the Relevant Guarantees; (e) he ought to have known that the CPL Reports did not comply with the Act in the manner described in paragraphs (a), (b) and (c) above; when prior to his participating in and voting on the resolution: (f) he failed to properly read, understand and give sufficient attention to the content of the CPL Reports in so far as they related to: (i) the classification of liabilities as either current or non-current; (ii) the disclosure of the Relevant Guarantees; (g) he failed to consider or properly consider the content of the CPL Reports in so far as they related to: (i) the classification of liabilities as either current or non-current; (ii) the disclosure of the Relevant Guarantees; (h) he failed to raise or make enquiry or adequate enquiry with management, the Board Audit and Risk Management Committee and other members of the Board concerning: (i) the apparent failure of the CPL Financial Reports to properly classify current and non-current liabilities; (ii) the apparent failure of the CPL Reports to properly disclose the Relevant Guarantees; (i) he failed to have the apparent failures with respect to the CPL Reports corrected; (j) he failed: (i) to take the necessary steps to ensure he had a sufficient knowledge of the requirements of s 295A of the Act; (ii) to read, understand and give sufficient attention to the management representation letter provided to the directors; (iii) to request that the directors be given a declaration pursuant to s 295A of the Act which accords with its requirements; (k) the directors had not been given a declaration pursuant to s 295A of the Act; and thereby: (l) failed to take all reasonable steps to secure compliance by CPL with ss 295A, 296, 297 and 298 of the Act; and (m) failed to exercise the degree of care and diligence required by s 180(1) by failing to take each of the steps referred to in paragraphs 1(f) to 1(k) above in the course of his review of the CPL Reports. 2. The fourth defendant, James William Hall, contravened s 601FD(3) of the Act in relation to Centro Property Trust ('CPT'), by his conduct on 6 September 2007 as an officer of CPT Manager Limited ('CPTM'), the responsible entity of CPT, in participating in and voting in favour of a resolution to approve the annual financial report ('CPT Financial Report') and annual directors' report ('CPT Directors' Report') for the year ended 30 June 2007 ('CPT Reports') in circumstances where: (a) in breach of s 296 of the Act the CPT Financial Report did not comply with the accounting standards in that: (i) contrary to accounting standard AASB 101, interest bearing current liabilities of the consolidated entity totalling $1,514,097,581 were classified and shown in the financial statements as non-current liabilities; (ii) contrary to accounting standard AASB 110, the notes to the financial statements did not disclose that after the reporting date CPTM as responsible entity of CPT had given the Relevant Guarantees; (b) in breach of s 297 of the Act, the financial statements and notes in the CPT Financial Report did not give a true and fair view of the financial position of the consolidated entity in that: (i) the financial statements represented that the interest bearing current liabilities of the consolidated entity were $1,096,936,000 when in fact the current liabilities of the consolidated entity were $2,611,033,581; (ii) contrary to accounting standard AASB 110, the notes to the financial statements did not disclose that after the reporting date CPTM as responsible entity of CPT had given the following guarantees of a material amount: A. Amended and Restated Guaranty Agreement ('Non-Recourse Carveouts') executed as of 31 July 2007 in favour of JPMorgan Chase Bank NA; B. Guaranty Agreement ('Payment') executed as of 31 July 2007 in favour of JPMorgan Chase Bank NA; C. Guaranty Agreement ('JPMCB') executed as of 5 August 2007 in favour of JPMorgan Chase Bank NA; D. Amended and Restated Guaranty Agreement executed as of 31 July 2007 in favour of Bank of America, NA; ('Relevant Guarantees'); (c) in breach of s 298 of the Act, the CPT Directors' Report did not give details of the Relevant Guarantees when those details were required to be given in the report by ss 299(1)(d) and 299A of the Act; (d) he knew or ought to have known that: (i) the interest bearing current liabilities of the consolidated entity were substantially in excess of $1,096,093,000; (ii) CPTM had given the Relevant Guarantees; (e) he ought to have known that the CPT Reports did not comply with the Act in the manner described in paragraphs (a),(b) and (c) above; when prior to his participating in and voting on the resolution: (f) he failed to properly read, understand and give sufficient attention to the content of the CPT Reports in so far as they related to: (i) the classification of liabilities as either current or non-current; (ii) the disclosure of the Relevant Guarantees; (g) he failed to consider or properly consider the content of the CPT Reports in so far as they related to: (i) the classification of liabilities as either current or non-current; (ii) the disclosure of the Relevant Guarantees; (h) he failed to raise or make enquiry or adequate enquiry with management, the Board Audit and Risk Management Committee and other members of the Board concerning: (i) the apparent failure of the CPT Financial Report to properly classify current and non-current liabilities; (ii) the apparent failure of the CPT Reports to properly disclose the Relevant Guarantees; (i) he failed to have the apparent failures with respect to the CPT Reports corrected; (j) he failed: (i) to take the necessary steps to ensure he had a sufficient knowledge of the requirements of s 295A of the Act; (ii) to read, understand and give sufficient attention to the management representation letter provided to the directors; (iii) to request that the directors be given a declaration pursuant to s 295A of the Act which accords with its requirements; (k) the directors had not been given a declaration pursuant to s 295A of the Act; and thereby: (l) contrary to s 601FD(1)(f) of the Act, failed to take all steps that a reasonable person in his position would take to ensure compliance by CPTM with ss 295A, 296, 297 and 298 of the Act; (m) failed to exercise the degree of care and diligence required by s 601FD(1)(b) of the Act by failing to take each of the steps referred to in paragraphs 2(f) to 2(k) above in the course of his review of the CPT Reports. 3. The fourth defendant, James William Hall, contravened s 601FD(3) of the Act in relation to Centro Retail Trust ('CRT') by his conduct on 6 September 2007 as an officer of Centro MCS Manager Limited ('CMCSM'), the responsible entity of CRT, in participating in and voting in favour of a resolution to approve the annual financial report of CRT for the year ended 30 June 2007 ('CRT Financial Report') in circumstances where: (a) in breach of s 296 of the Act the CRT Financial Report did not comply with the accounting standards in that contrary to accounting standard AASB 101, interest bearing current liabilities of the consolidated entity totalling $598,292,097 were classified and shown in the financial statements as non-current liabilities; (b) in breach of s 297 of the Act, the financial statements and notes in the CRT Financial Report did not give a true and fair view of the financial position of the consolidated entity in that the financial statements and notes represented that the interest bearing current liabilities of the consolidated entity were zero when in fact the interest bearing current liabilities of the consolidated entity were $598,292,097; (c) he knew or ought to have known that the interest bearing current liabilities of the consolidated entity were substantially in excess of zero; (d) he ought to have known that the CRT Financial Report did not comply with the Act in the manner described in paragraphs (a) and (b) above; when prior to his participating in and voting on the resolution: (e) he failed to properly read, understand and give sufficient attention to the content of the CRT Financial Report in so far as it related to the classification of liabilities as either current or non-current; (f) he failed to consider or properly consider the content of the CRT Financial Report in so far as it related to the classification of liabilities as either current or non-current; (g) he failed to raise or make enquiry or adequate enquiry with management, the Board Audit and Risk Management Committee and other members of the Board concerning the apparent failure of the CRT Financial Report to properly classify current and non-current liabilities; (h) he failed to have the apparent failure with respect to the CRT Financial Report corrected; (i) he failed: (i) to take the necessary steps to ensure he had a sufficient knowledge of the requirements of s 295A; (ii) to read, understand and give sufficient attention to the management representation letter provided to the directors; (iii) to request that the directors be given a declaration pursuant to s 295A of the Act which accords with its requirements; (j) the directors had not been given a declaration pursuant to s 295A of the Act; and thereby: (k) contrary to s 601FD(1)(f) of the Act, failed to take all steps that a reasonable person would take if they were in his position to ensure compliance by CMCSM with ss 295A, 296, 297 and 298 of the Act; and (l) failed to exercise the degree of care and diligence required by s 601FD(1)(b) of the Act by failing to take each of the steps referred to in paragraphs 3(e) to 3(j) above in the course of his review of the CRT Financial Report. AND THE COURT ORDERS THAT: 4. The fourth defendant's application for relief from liability brought pursuant to see 1317S and 1318 of the corporations Act 2001 (Cth) is dismissed. 5. The fourth defendant pay: (a) one-eighth of the plaintiff's costs (including reserved costs) of and incidental to this proceeding (other than the costs referred to in paragraph (b)); and (b) one-seventh of the plaintiff's costs (including reserved costs) of and incidental to this proceeding incurred on and after 4 April 2011 up to and including 27 May 2011.

Paul Ashley Cooper THE COURT DECLARES THAT: 1. The fifth defendant, Paul Ashley Cooper, contravened ss 344(1) and 180(1) of the Corporations Act 2001 (Cth) ('the Act') in relation to Centro Properties Limited ('CPL'), by his conduct as a director of CPL on 6 September 2007, in participating in and voting in favour of a resolution to approve the annual financial report ('CPL Financial Report') and annual directors' report ('CPL Directors' Report') for the year ended 30 June 2007 ('CPL Reports') in circumstances where: (a) in breach of s 296 of the Act the CPL Financial Report did not comply with the accounting standards in that: (i) contrary to accounting standard AASB 101, interest bearing current liabilities of the consolidated entity totalling $1,514,097,581 were classified and shown in the financial statements as non-current liabilities; (ii) contrary to accounting standard AASB 110, the notes to the financial statements did not disclose that after the reporting date CPL had given the following guarantees of a material amount: A. Amended and Restated Guaranty Agreement ('Non-Recourse Carveouts') executed as of 31 July 2007 in favour of JPMorgan Chase Bank NA; B. Guaranty Agreement ('Payment') executed as of 31 July 2007 in favour of JPMorgan Chase Bank NA; C. Guaranty Agreement ('JPMCB') executed as of 5 August 2007 in favour of JPMorgan Chase Bank NA; D. Amended and Restated Guaranty Agreement executed as of 31 July 2007 in favour of Bank of America, NA; ('Relevant Guarantees'); (b) in breach of s 297 of the Act, the financial statements and notes in the CPL Financial Report did not give a true and fair view of the financial position of the consolidated entity in that: (i) the financial statements and notes represented that the interest bearing current liabilities of the consolidated entity were $1,096,936,000 when in fact the current liabilities of the consolidated entity were $2,611,033,581; (ii) the notes did not disclose the fact that CPL had given the Relevant Guarantees; (c) in breach of s 298 of the Act, CPL Directors' Report did not give details of the Relevant Guarantees when those details were required to be given in the report by ss 299(1)(d) and 299A of the Act; (d) he knew or ought to have known that: (i) the interest bearing current liabilities of the consolidated entity were substantially in excess of $1,096,093,000; (ii) CPL had given the Relevant Guarantees; (e) he ought to have known that the CPL Reports did not comply with the Act in the manner described in paragraphs (a), (b) and (c) above; when prior to his participating in and voting on the resolution: (f) he failed to properly read, understand and give sufficient attention to the content of the CPL Reports in so far as they related to: (i) the classification of liabilities as either current or non-current; (ii) the disclosure of the Relevant Guarantees; (g) he failed to consider or properly consider the content of the CPL Reports in so far as they related to: (i) the classification of liabilities as either current or non-current; (ii) the disclosure of the Relevant Guarantees; (h) he failed to raise or make enquiry or adequate enquiry with management, the Board Audit and Risk Management Committee and other members of the Board concerning: (i) the apparent failure of the CPL Financial Reports to properly classify current and non-current liabilities; (ii) the apparent failure of the CPL Reports to properly disclose the Relevant Guarantees; (i) he failed to have the apparent failures with respect to the CPL Reports corrected; (j) he failed: (i) to take the necessary steps to ensure he had a sufficient knowledge of the requirements of s 295A of the Act; (ii) to read, understand and give sufficient attention to the management representation letter provided to the directors; (iii) to request that the directors be given a declaration pursuant to s 295A of the Act which accords with its requirements; (k) the directors had not been given a declaration pursuant to s 295A of the Act; and thereby: (l) failed to take all reasonable steps to secure compliance by CPL with ss 295A, 296, 297 and 298 of the Act; and (m) failed to exercise the degree of care and diligence required by s 180(1) by failing to take each of the steps referred to in paragraphs 1(f) to 1(k) above in the course of his review of the CPL Reports. 2. The fifth defendant, Paul Ashley Cooper, contravened s 601FD(3) of the Act in relation to Centro Property Trust ('CPT'), by his conduct on 6 September 2007 as an officer of CPT Manager Limited ('CPTM'), the responsible entity of CPT, in participating in and voting in favour of a resolution to approve the annual financial report ('CPT Financial Report') and annual directors' report ('CPT Directors' Report') for the year ended 30 June 2007 ('CPT Reports') in circumstances where: (a) in breach of s 296 of the Act the CPT Financial Report did not comply with the accounting standards in that: (i) contrary to accounting standard AASB 101, interest bearing current liabilities of the consolidated entity totalling $1,514,097,581 were classified and shown in the financial statements as non-current liabilities; (ii) contrary to accounting standard AASB 110, the notes to the financial statements did not disclose that after the reporting date CPTM as responsible entity of CPT had given the Relevant Guarantees; (b) in breach of s 297 of the Act, the financial statements and notes in the CPT Financial Report did not give a true and fair view of the financial position of the consolidated entity in that: (i) the financial statements represented that the interest bearing current liabilities of the consolidated entity were $1,096,936,000 when in fact the current liabilities of the consolidated entity were $2,611,033,581; (ii) contrary to accounting standard AASB 110, the notes to the financial statements did not disclose that after the reporting date CPTM as responsible entity of CPT had given the following guarantees of a material amount: A. Amended and Restated Guaranty Agreement ('Non-Recourse Carveouts') executed as of 31 July 2007 in favour of JPMorgan Chase Bank NA; B. Guaranty Agreement ('Payment') executed as of 31 July 2007 in favour of JPMorgan Chase Bank NA; C. Guaranty Agreement ('JPMCB') executed as of 5 August 2007 in favour of JPMorgan Chase Bank NA; D. Amended and Restated Guaranty Agreement executed as of 31 July 2007 in favour of Bank of America, NA; ('Relevant Guarantees'); (c) in breach of s 298 of the Act, the CPT Directors' Report did not give details of the Relevant Guarantees when those details were required to be given in the report by ss 299(1)(d) and 299A of the Act; (d) he knew or ought to have known that: (i) the interest bearing current liabilities of the consolidated entity were substantially in excess of $1,096,093,000; (ii) CPTM had given the Relevant Guarantees; (e) he ought to have known that the CPT Reports did not comply with the Act in the manner described in paragraphs (a),(b) and (c) above; when prior to his participating in and voting on the resolution: (f) he failed to properly read, understand and give sufficient attention to the content of the CPT Reports in so far as they related to: (i) the classification of liabilities as either current or non-current; (ii) the disclosure of the Relevant Guarantees; (g) he failed to consider or properly consider the content of the CPT Reports in so far as they related to: (i) the classification of liabilities as either current or non-current; (ii) the disclosure of the Relevant Guarantees; (h) he failed to raise or make enquiry or adequate enquiry with management, the Board Audit and Risk Management Committee and other members of the Board concerning: (i) the apparent failure of the CPT Financial Report to properly classify current and non-current liabilities; (ii) the apparent failure of the CPT Reports to properly disclose the Relevant Guarantees; (i) he failed to have the apparent failures with respect to the CPT Reports corrected; (j) he failed: (i) to take the necessary steps to ensure he had a sufficient knowledge of the requirements of s 295A of the Act; (ii) to read, understand and give sufficient attention to the management representation letter provided to the directors; (iii) to request that the directors be given a declaration pursuant to s 295A of the Act which accords with its requirements; (k) the directors had not been given a declaration pursuant to s 295A of the Act; and thereby: (l) contrary to s 601FD(1)(f) of the Act, failed to take all steps that a reasonable person in his position would take to ensure compliance by CPTM with ss 295A, 296, 297 and 298 of the Act; (m) failed to exercise the degree of care and diligence required by s 601FD(1)(b) of the Act by failing to take each of the steps referred to in paragraphs 2(f) to 2(k) above in the course of his review of the CPT Reports. 3. The fifth defendant, Paul Ashley Cooper, contravened s 601FD(3) of the Act in relation to Centro Retail Trust ('CRT') by his conduct on 6 September 2007 as an officer of Centro MCS Manager Limited ('CMCSM'), the responsible entity of CRT, in participating in and voting in favour of a resolution to approve the annual financial report of CRT for the year ended 30 June 2007 ('CRT Financial Report') in circumstances where: (a) in breach of s 296 of the Act the CRT Financial Report did not comply with the accounting standards in that contrary to accounting standard AASB 101, interest bearing current liabilities of the consolidated entity totalling $598,292,097 were classified and shown in the financial statements as non-current liabilities; (b) in breach of s 297 of the Act, the financial statements and notes in the CRT Financial Report did not give a true and fair view of the financial position of the consolidated entity in that the financial statements and notes represented that the interest bearing current liabilities of the consolidated entity were zero when in fact the interest bearing current liabilities of the consolidated entity were $598,292,097; (c) he knew or ought to have known that the interest bearing current liabilities of the consolidated entity were substantially in excess of zero; (d) he ought to have known that the CRT Financial Report did not comply with the Act in the manner described in paragraphs (a) and (b) above; when prior to his participating in and voting on the resolution: (e) he failed to properly read, understand and give sufficient attention to the content of the CRT Financial Report in so far as it related to the classification of liabilities as either current or non-current; (f) he failed to consider or properly consider the content of the CRT Financial Report in so far as it related to the classification of liabilities as either current or non-current; (g) he failed to raise or make enquiry or adequate enquiry with management, the Board Audit and Risk Management Committee and other members of the Board concerning the apparent failure of the CRT Financial Report to properly classify current and non-current liabilities; (h) he failed to have the apparent failure with respect to the CRT Financial Report corrected; (i) he failed: (i) to take the necessary steps to ensure he had a sufficient knowledge of the requirements of s 295A; (ii) to read, understand and give sufficient attention to the management representation letter provided to the directors; (iii) to request that the directors be given a declaration pursuant to s 295A of the Act which accords with its requirements; (j) the directors had not been given a declaration pursuant to s 295A of the Act; and thereby: (k) contrary to s 601FD(1)(f) of the Act, failed to take all steps that a reasonable person would take if they were in his position to ensure compliance by CMCSM with ss 295A, 296, 297 and 298 of the Act; and (l) failed to exercise the degree of care and diligence required by s 601FD(1)(b) of the Act by failing to take each of the steps referred to in paragraphs 3(e) to 3(j) above in the course of his review of the CRT Financial Report. AND THE COURT ORDERS THAT: 4. The fifth defendant's application for relief from liability brought pursuant to ss 1317S and 1318 of the Corporations Act 2011 (Cth) is dismissed. 5. The fifth defendant pay: (a) one-eighth of the plaintiff's costs (including reserved costs) of and incidental to this proceeding (other than the costs referred to in paragraph (b)); and (b) one-seventh of the plaintiff's costs (including reserved costs) of and incidental to this proceeding incurred on and after 4 April 2011 up to and including 27 May 2011.

Peter Graham Goldie THE COURT DECLARES THAT: 1. The sixth defendant, Peter Graham Goldie, contravened ss 344(1) and 180(1) of the Corporations Act 2001 (Cth) ('the Act') in relation to Centro Properties Limited ('CPL'), by his conduct as a director of CPL on 6 September 2007, in participating in and voting in favour of a resolution to approve the annual financial report ('CPL Financial Report') and annual directors' report ('CPL Directors' Report') for the year ended 30 June 2007 ('CPL Reports') in circumstances where: (a) in breach of s 296 of the Act the CPL Financial Report did not comply with the accounting standards in that: (i) contrary to accounting standard AASB 101, interest bearing current liabilities of the consolidated entity totalling $1,514,097,581 were classified and shown in the financial statements as non-current liabilities; (ii) contrary to accounting standard AASB 110, the notes to the financial statements did not disclose that after the reporting date CPL had given the following guarantees of a material amount: A. Amended and Restated Guaranty Agreement ('Non-Recourse Carveouts') executed as of 31 July 2007 in favour of JPMorgan Chase Bank NA; B. Guaranty Agreement ('Payment') executed as of 31 July 2007 in favour of JPMorgan Chase Bank NA; C. Guaranty Agreement ('JPMCB') executed as of 5 August 2007 in favour of JPMorgan Chase Bank NA; D. Amended and Restated Guaranty Agreement executed as of 31 July 2007 in favour of Bank of America, NA; ('Relevant Guarantees'); (b) in breach of s 297 of the Act, the financial statements and notes in the CPL Financial Report did not give a true and fair view of the financial position of the consolidated entity in that: (i) the financial statements and notes represented that the interest bearing current liabilities of the consolidated entity were $1,096,936,000 when in fact the current liabilities of the consolidated entity were $2,611,033,581; (ii) the notes did not disclose the fact that CPL had given the Relevant Guarantees; (c) in breach of s 298 of the Act, CPL Directors' Report did not give details of the Relevant Guarantees when those details were required to be given in the report by ss 299(1)(d) and 299A of the Act; (d) he knew or ought to have known that: (i) the interest bearing current liabilities of the consolidated entity were substantially in excess of $1,096,093,000; (ii) CPL had given the Relevant Guarantees; (e) he ought to have known that the CPL Reports did not comply with the Act in the manner described in paragraphs (a), (b) and (c) above; when prior to his participating in and voting on the resolution: (f) he failed to properly read, understand and give sufficient attention to the content of the CPL Reports in so far as they related to: (i) the classification of liabilities as either current or non-current; (ii) the disclosure of the Relevant Guarantees; (g) he failed to consider or properly consider the content of the CPL Reports in so far as they related to: (i) the classification of liabilities as either current or non-current; (ii) the disclosure of the Relevant Guarantees; (h) he failed to raise or make enquiry or adequate enquiry with management, the Board Audit and Risk Management Committee and other members of the Board concerning: (i) the apparent failure of the CPL Financial Reports to properly classify current and non-current liabilities; (ii) the apparent failure of the CPL Reports to properly disclose the Relevant Guarantees; (i) he failed to have the apparent failures with respect to the CPL Reports corrected; (j) he failed: (i) to take the necessary steps to ensure he had a sufficient knowledge of the requirements of s 295A of the Act; (ii) to read, understand and give sufficient attention to the management representation letter provided to the directors; (iii) to request that the directors be given a declaration pursuant to s 295A of the Act which accords with its requirements; (k) the directors had not been given a declaration pursuant to s 295A of the Act; and thereby: (l) failed to take all reasonable steps to secure compliance by CPL with ss 295A, 296, 297 and 298 of the Act; and (m) failed to exercise the degree of care and diligence required by s 180(1) by failing to take each of the steps referred to in paragraphs 1(f) to 1(k) above in the course of his review of the CPL Reports. 2. The sixth defendant, Peter Graham Goldie, contravened s 601FD(3) of the Act in relation to Centro Property Trust ('CPT'), by his conduct on 6 September 2007 as an officer of CPT Manager Limited ('CPTM'), the responsible entity of CPT, in participating in and voting in favour of a resolution to approve the annual financial report ('CPT Financial Report') and annual directors' report ('CPT Directors' Report') for the year ended 30 June 2007 ('CPT Reports') in circumstances where: (a) in breach of s 296 of the Act the CPT Financial Report did not comply with the accounting standards in that: (i) contrary to accounting standard AASB 101, interest bearing current liabilities of the consolidated entity totalling $1,514,097,581 were classified and shown in the financial statements as non-current liabilities; (ii) contrary to accounting standard AASB 110, the notes to the financial statements did not disclose that after the reporting date CPTM as responsible entity of CPT had given the Relevant Guarantees; (b) in breach of s 297 of the Act, the financial statements and notes in the CPT Financial Report did not give a true and fair view of the financial position of the consolidated entity in that: (i) the financial statements represented that the interest bearing current liabilities of the consolidated entity were $1,096,936,000 when in fact the current liabilities of the consolidated entity were $2,611,033,581; (ii) contrary to accounting standard AASB 110, the notes to the financial statements did not disclose that after the reporting date CPTM as responsible entity of CPT had given the following guarantees of a material amount: A. Amended and Restated Guaranty Agreement ('Non-Recourse Carveouts') executed as of 31 July 2007 in favour of JPMorgan Chase Bank NA; B. Guaranty Agreement ('Payment') executed as of 31 July 2007 in favour of JPMorgan Chase Bank NA; C. Guaranty Agreement ('JPMCB') executed as of 5 August 2007 in favour of JPMorgan Chase Bank NA; D. Amended and Restated Guaranty Agreement executed as of 31 July 2007 in favour of Bank of America, NA; ('Relevant Guarantees'); (c) in breach of s 298 of the Act, the CPT Directors' Report did not give details of the Relevant Guarantees when those details were required to be given in the report by ss 299(1)(d) and 299A of the Act; (d) he knew or ought to have known that: (i) the interest bearing current liabilities of the consolidated entity were substantially in excess of $1,096,093,000; (ii) CPTM had given the Relevant Guarantees; (e) he ought to have known that the CPT Reports did not comply with the Act in the manner described in paragraphs (a),(b) and (c) above; when prior to his participating in and voting on the resolution: (f) he failed to properly read, understand and give sufficient attention to the content of the CPT Reports in so far as they related to: (i) the classification of liabilities as either current or non-current; (ii) the disclosure of the Relevant Guarantees; (g) he failed to consider or properly consider the content of the CPT Reports in so far as they related to: (i) the classification of liabilities as either current or non-current; (ii) the disclosure of the Relevant Guarantees; (h) he failed to raise or make enquiry or adequate enquiry with management, the Board Audit and Risk Management Committee and other members of the Board concerning: (i) the apparent failure of the CPT Financial Report to properly classify current and non-current liabilities; (ii) the apparent failure of the CPT Reports to properly disclose the Relevant Guarantees; (i) he failed to have the apparent failures with respect to the CPT Reports corrected; (j) he failed: (i) to take the necessary steps to ensure he had a sufficient knowledge of the requirements of s 295A of the Act; (ii) to read, understand and give sufficient attention to the management representation letter provided to the directors; (iii) to request that the directors be given a declaration pursuant to s 295A of the Act which accords with its requirements; (k) the directors had not been given a declaration pursuant to s 295A of the Act; and thereby: (l) contrary to s 601FD(1)(f) of the Act, failed to take all steps that a reasonable person in his position would take to ensure compliance by CPTM with ss 295A, 296, 297 and 298 of the Act; (m) failed to exercise the degree of care and diligence required by s 601FD(1)(b) of the Act by failing to take each of the steps referred to in paragraphs 2(f) to 2(k) above in the course of his review of the CPT Reports. 3. The sixth defendant, Peter Graham Goldie, contravened s 601FD(3) of the Act in relation to Centro Retail Trust ('CRT') by his conduct on 6 September 2007 as an officer of Centro MCS Manager Limited ('CMCSM'), the responsible entity of CRT, in participating in and voting in favour of a resolution to approve the annual financial report of CRT for the year ended 30 June 2007 ('CRT Financial Report') in circumstances where: (a) in breach of s 296 of the Act the CRT Financial Report did not comply with the accounting standards in that contrary to accounting standard AASB 101, interest bearing current liabilities of the consolidated entity totalling $598,292,097 were classified and shown in the financial statements as non-current liabilities; (b) in breach of s 297 of the Act, the financial statements and notes in the CRT Financial Report did not give a true and fair view of the financial position of the consolidated entity in that the financial statements and notes represented that the interest bearing current liabilities of the consolidated entity were zero when in fact the interest bearing current liabilities of the consolidated entity were $598,292,097; (c) he knew or ought to have known that the interest bearing current liabilities of the consolidated entity were substantially in excess of zero; (d) he ought to have known that the CRT Financial Report did not comply with the Act in the manner described in paragraphs (a) and (b) above; when prior to his participating in and voting on the resolution: (e) he failed to properly read, understand and give sufficient attention to the content of the CRT Financial Report in so far as it related to the classification of liabilities as either current or non-current; (f) he failed to consider or properly consider the content of the CRT Financial Report in so far as it related to the classification of liabilities as either current or non-current; (g) he failed to raise or make enquiry or adequate enquiry with management, the Board Audit and Risk Management Committee and other members of the Board concerning the apparent failure of the CRT Financial Report to properly classify current and non-current liabilities; (h) he failed to have the apparent failure with respect to the CRT Financial Report corrected; (i) he failed: (i) to take the necessary steps to ensure he had a sufficient knowledge of the requirements of s 295A; (ii) to read, understand and give sufficient attention to the management representation letter provided to the directors; (iii) to request that the directors be given a declaration pursuant to s 295A of the Act which accords with its requirements; (j) the directors had not been given a declaration pursuant to s 295A of the Act; and thereby: (k) contrary to s 601FD(1)(f) of the Act, failed to take all steps that a reasonable person would take if they were in his position to ensure compliance by CMCSM with ss 295A, 296, 297 and 298 of the Act; and (l) failed to exercise the degree of care and diligence required by s 601FD(1)(b) of the Act by failing to take each of the steps referred to in paragraphs 3(e) to 3(j) above in the course of his review of the CRT Financial Report. AND THE COURT ORDERS THAT: 4. The sixth defendant's application for relief from liability brought pursuant to ss 1317S and 1318 of the Corporations Act 2011 (Cth) is dismissed. 5. The sixth defendant pay: (a) one-eighth of the plaintiff's costs (including reserved costs) of and incidental to this proceeding (other than the costs referred to in paragraph (b)); and (b) one-seventh of the plaintiff's costs (including reserved costs) of and incidental to this proceeding incurred on and after 4 April 2011 up to and including 27 May 2011.

Louis Peter Wilkinson THE COURT DECLARES THAT: 1. The seventh defendant, Louis Peter Wilkinson, contravened ss 344(1) and 180(1) of the Corporations Act 2001 (Cth) ('the Act') in relation to Centro Properties Limited ('CPL'), by his conduct as a director of CPL on 6 September 2007, in participating in and voting in favour of a resolution to approve the annual financial report ('CPL Financial Report') and annual directors' report ('CPL Directors' Report') for the year ended 30 June 2007 ('CPL Reports') in circumstances where: (a) in breach of s 296 of the Act the CPL Financial Report did not comply with the accounting standards in that: (i) contrary to accounting standard AASB 101, interest bearing current liabilities of the consolidated entity totalling $1,514,097,581 were classified and shown in the financial statements as non-current liabilities; (ii) contrary to accounting standard AASB 110, the notes to the financial statements did not disclose that after the reporting date CPL had given the following guarantees of a material amount: A. Amended and Restated Guaranty Agreement ('Non-Recourse Carveouts') executed as of 31 July 2007 in favour of JPMorgan Chase Bank NA; B. Guaranty Agreement ('Payment') executed as of 31 July 2007 in favour of JPMorgan Chase Bank NA; C. Guaranty Agreement ('JPMCB') executed as of 5 August 2007 in favour of JPMorgan Chase Bank NA; D. Amended and Restated Guaranty Agreement executed as of 31 July 2007 in favour of Bank of America, NA; ('Relevant Guarantees'); (b) in breach of s 297 of the Act, the financial statements and notes in the CPL Financial Report did not give a true and fair view of the financial position of the consolidated entity in that: (i) the financial statements and notes represented that the interest bearing current liabilities of the consolidated entity were $1,096,936,000 when in fact the current liabilities of the consolidated entity were $2,611,033,581; (ii) the notes did not disclose the fact that CPL had given the Relevant Guarantees; (c) in breach of s 298 of the Act, CPL Directors' Report did not give details of the Relevant Guarantees when those details were required to be given in the report by ss 299(1)(d) and 299A of the Act; (d) he knew or ought to have known that: (i) the interest bearing current liabilities of the consolidated entity were substantially in excess of $1,096,093,000; (ii) CPL had given the Relevant Guarantees; (e) he ought to have known that the CPL Reports did not comply with the Act in the manner described in paragraphs (a), (b) and (c) above; when prior to his participating in and voting on the resolution: (f) he failed to properly read, understand and give sufficient attention to the content of the CPL Reports in so far as they related to: (i) the classification of liabilities as either current or non-current; (ii) the disclosure of the Relevant Guarantees; (g) he failed to consider or properly consider the content of the CPL Reports in so far as they related to: (i) the classification of liabilities as either current or non-current; (ii) the disclosure of the Relevant Guarantees; (h) he failed to raise or make enquiry or adequate enquiry with management, the Board Audit and Risk Management Committee and other members of the Board concerning: (i) the apparent failure of the CPL Financial Reports to properly classify current and non-current liabilities; (ii) the apparent failure of the CPL Reports to properly disclose the Relevant Guarantees; (i) he failed to have the apparent failures with respect to the CPL Reports corrected; (j) he failed: (i) to take the necessary steps to ensure he had a sufficient knowledge of the requirements of s 295A of the Act; (ii) to read, understand and give sufficient attention to the management representation letter provided to the directors; (iii) to request that the directors be given a declaration pursuant to s 295A of the Act which accords with its requirements; (k) the directors had not been given a declaration pursuant to s 295A of the Act; and thereby: (l) failed to take all reasonable steps to secure compliance by CPL with ss 295A, 296, 297 and 298 of the Act; and (m) failed to exercise the degree of care and diligence required by s 180(1) by failing to take each of the steps referred to in paragraphs 1(f) to 1(k) above in the course of his review of the CPL Reports. 2. The seventh defendant, Louis Peter Wilkinson, contravened s 601FD(3) of the Act in relation to Centro Property Trust ('CPT'), by his conduct on 6 September 2007 as an officer of CPT Manager Limited ('CPTM'), the responsible entity of CPT, in participating in and voting in favour of a resolution to approve the annual financial report ('CPT Financial Report') and annual directors' report ('CPT Directors' Report') for the year ended 30 June 2007 ('CPT Reports') in circumstances where: (a) in breach of s 296 of the Act the CPT Financial Report did not comply with the accounting standards in that: (i) contrary to accounting standard AASB 101, interest bearing current liabilities of the consolidated entity totalling $1,514,097,581 were classified and shown in the financial statements as non-current liabilities; (ii) contrary to accounting standard AASB 110, the notes to the financial statements did not disclose that after the reporting date CPTM as responsible entity of CPT had given the Relevant Guarantees; (b) in breach of s 297 of the Act, the financial statements and notes in the CPT Financial Report did not give a true and fair view of the financial position of the consolidated entity in that: (i) the financial statements represented that the interest bearing current liabilities of the consolidated entity were $1,096,936,000 when in fact the current liabilities of the consolidated entity were $2,611,033,581; (ii) contrary to accounting standard AASB 110, the notes to the financial statements did not disclose that after the reporting date CPTM as responsible entity of CPT had given the following guarantees of a material amount: A. Amended and Restated Guaranty Agreement ('Non-Recourse Carveouts') executed as of 31 July 2007 in favour of JPMorgan Chase Bank NA; B. Guaranty Agreement ('Payment') executed as of 31 July 2007 in favour of JPMorgan Chase Bank NA; C. Guaranty Agreement ('JPMCB') executed as of 5 August 2007 in favour of JPMorgan Chase Bank NA; D. Amended and Restated Guaranty Agreement executed as of 31 July 2007 in favour of Bank of America, NA; ('Relevant Guarantees'); (c) in breach of s 298 of the Act, the CPT Directors' Report did not give details of the Relevant Guarantees when those details were required to be given in the report by ss 299(1)(d) and 299A of the Act; (d) he knew or ought to have known that: (i) the interest bearing current liabilities of the consolidated entity were substantially in excess of $1,096,093,000; (ii) CPTM had given the Relevant Guarantees; (e) he ought to have known that the CPT Reports did not comply with the Act in the manner described in paragraphs (a),(b) and (c) above; when prior to his participating in and voting on the resolution: (f) he failed to properly read, understand and give sufficient attention to the content of the CPT Reports in so far as they related to: (i) the classification of liabilities as either current or non-current; (ii) the disclosure of the Relevant Guarantees; (g) he failed to consider or properly consider the content of the CPT Reports in so far as they related to: (i) the classification of liabilities as either current or non-current; (ii) the disclosure of the Relevant Guarantees; (h) he failed to raise or make enquiry or adequate enquiry with management, the Board Audit and Risk Management Committee and other members of the Board concerning: (i) the apparent failure of the CPT Financial Report to properly classify current and non-current liabilities; (ii) the apparent failure of the CPT Reports to properly disclose the Relevant Guarantees; (i) he failed to have the apparent failures with respect to the CPT Reports corrected; (j) he failed: (i) to take the necessary steps to ensure he had a sufficient knowledge of the requirements of s 295A; (ii) to read, understand and give sufficient attention to the management representation letter provided to the directors; (iii) to request that the directors be given a declaration pursuant to s 295A of the Act which accords with its requirements; (k) the directors had not been given a declaration pursuant to s 295A of the Act; and thereby: (l) contrary to s 601FD(1)(f) of the Act, failed to take all steps that a reasonable person in his position would take to ensure compliance by CPTM with ss 295A, 296, 297 and 298 of the Act; (m) failed to exercise the degree of care and diligence required by s 601FD(1)(b) of the Act by failing to take each of the steps referred to in paragraphs 2(f) to 2(k) above in the course of his review of the CPT Reports. 3. The seventh defendant, Louis Peter Wilkinson, contravened s 601FD(3) of the Act in relation to Centro Retail Trust ('CRT') by his conduct on 6 September 2007 as an officer of Centro MCS Manager Limited ('CMCSM'), the responsible entity of CRT, in participating in and voting in favour of a resolution to approve the annual financial report of CRT for the year ended 30 June 2007 ('CRT Financial Report') in circumstances where: (a) in breach of s 296 of the Act the CRT Financial Report did not comply with the accounting standards in that contrary to accounting standard AASB 101, interest bearing current liabilities of the consolidated entity totalling $598,292,097 were classified and shown in the financial statements as non-current liabilities; (b) in breach of s 297 of the Act, the financial statements and notes in the CRT Financial Report did not give a true and fair view of the financial position of the consolidated entity in that the financial statements and notes represented that the interest bearing current liabilities of the consolidated entity were zero when in fact the interest bearing current liabilities of the consolidated entity were $598,292,097; (c) he knew or ought to have known that the interest bearing current liabilities of the consolidated entity were substantially in excess of zero; (d) he ought to have known that the CRT Financial Report did not comply with the Act in the manner described in paragraphs (a) and (b) above; when prior to his participating in and voting on the resolution: (e) he failed to properly read, understand and give sufficient attention to the content of the CRT Financial Report in so far as it related to the classification of liabilities as either current or non-current; (f) he failed to consider or properly consider the content of the CRT Financial Report in so far as it related to the classification of liabilities as either current or non-current; (g) he failed to raise or make enquiry or adequate enquiry with management, the Board Audit and Risk Management Committee and other members of the Board concerning the apparent failure of the CRT Financial Report to properly classify current and non-current liabilities; (h) he failed to have the apparent failure with respect to the CRT Financial Report corrected; (i) he failed: (i) to take the necessary steps to ensure he had a sufficient knowledge of the requirements of s 295A of the Act; (ii) to read, understand and give sufficient attention to the management representation letter provided to the directors; (iii) to request that the directors be given a declaration pursuant to s 295A of the Act which accords with its requirements; (j) the directors had not been given a declaration pursuant to s 295A of the Act; and thereby: (k) contrary to s 601FD(1)(f) of the Act, failed to take all steps that a reasonable person would take if they were in his position to ensure compliance by CMCSM with ss 295A, 296, 297 and 298 of the Act; and (l) failed to exercise the degree of care and diligence required by s 601FD(1)(b) of the Act by failing to take each of the steps referred to in paragraphs 3(e) to 3(j) above in the course of his review of the CRT Financial Report. AND THE COURT ORDERS THAT: 4. The seventh defendant's application for relief from liability brought pursuant to ss 1317S and 1318 of the Corporations Act 2011 (Cth) is dismissed. 5. The seventh defendant pay: (a) one-eighth of the plaintiff's costs (including reserved costs) of and incidental to this proceeding (other than the costs referred to in paragraph (b)); and (b) one-seventh of the plaintiff's costs (including reserved costs) of and incidental to this proceeding incurred on and after 4 April 2011 up to and including 27 May 2011.

Romano George Nenna THE COURT DECLARES THAT: 1. The eighth defendant, Romano George Nenna, contravened s 180(1) of the Corporations Act 2001 (Cth) ('the Act') in relation to Centro Properties Limited ('CPL'), by his conduct as the Chief Financial Officer of CPL on or about 4 September 2007, in recommending to its directors a resolution to approve the annual financial report ('CPL Financial Report') and annual directors' report ('CPL Directors' Report') for the year ended 30 June 2007 (CPL Reports) in circumstances where: (a) he knew that: (i) as at 30 June 2007 CPL and its controlled entities had liabilities totalling $2,611,033,581 which were due for repayment before 30 June 2008 and in relation to which or any part of which neither CPL nor any relevant entity had an unconditional right to defer repayment for at least 12 months after 30 June 2007; (ii) since 30 June 2007 CPL had entered into the following guarantees: A. Amended and Restated Guaranty Agreement ('Non-Recourse Carveouts') executed as of 31 July 2007 in favour of JPMorgan Chase Bank NA; B. Guaranty Agreement ('Payment') executed as of 31 July 2007 in favour of JPMorgan Chase Bank NA; C. Guaranty Agreement ('JPMCB') executed as of 5 August 2007 in favour of JPMorgan Chase Bank NA; D. Amended and Restated Guaranty Agreement executed as of 31 July 2007 in favour of Bank of America, NA; ('Relevant Guarantees'); (iii) the Relevant Guarantees might significantly affect the state of affairs of CPL and its controlled entities in financial years subsequent to the year ended 30 June 2007; (iv) a major liability had been wrongly classified in the consolidated balance sheet of CPL lodged with the Australian Securities Exchange on or about 9 August 2007; (b) by reason of the matters referred to in paragraph (a) above, he ought to have known that CPL Reports did not comply with the Act, in that: (i) in breach of s 296 of the Act, the CPL Financial Report did not comply with the accounting standards in that: A. contrary to accounting standard AASB 101, interest bearing current liabilities of the consolidated entity totalling $1,514,097,581 were classified and shown in the financial statements as non-current liabilities; B. contrary to accounting standard AASB 110, the notes to the financial statements did not disclose that after the reporting date CPL had given the Relevant Guarantees; (ii) in breach of s 297 of the Act, the financial statements and notes in the CPL Financial Report did not give a true and fair view of the financial position of the consolidated entity in that: A. the financial statements and notes represented that the interest bearing current liabilities of the consolidated entity were $1,096,936,000 when in fact the current liabilities of the consolidated entity were $2,611,033,581; B. the notes did not disclose the fact that CPL had given the Relevant Guarantees; (iii) in breach of s 298 of the Act, CPL Directors' Report did not give details of the Relevant Guarantees when those details were required to be given in the report by ss 299(1)(d) and 299A of the Act; (c) he failed to take all reasonable steps to rectify that non-compliance, and he thereby failed to exercise the degree of care and diligence required by s 180(1) of the Act, ('First Contravention') 2. The eighth defendant, Romano George Nenna, contravened s 601FD(3) of the Act in relation to Centro Property Trust ('CPT'), by his conduct as the Chief Financial Officer of CPT Manager Limited ('CPTM'), the responsible entity of CPT on or about 4 September 2007, in recommending to its directors a resolution to approve the annual financial report ('CPT Financial Report') and annual directors' report ('CPT Directors' Report') for the year ended 30 June 2007 ('CPT Reports') in circumstances where: (a) he knew that: (i) as at 30 June 2007 CPT and its controlled entities had liabilities totalling $2,611,033,581 which were due for repayment before 30 June 2008 and in relation to which or any part of which neither CPT nor any relevant entity had an unconditional right to defer repayment for at least 12 months after 30 June 2007; (ii) since 30 June 2007 CPTM as responsible entity of CPT had entered into the following guarantees: A. Amended and Restated Guaranty Agreement ('Non-Recourse Carveouts') executed as of 31 July 2007 in favour of JPMorgan Chase Bank NA; B. Guaranty Agreement ('Payment') executed as of 31 July 2007 in favour of JPMorgan Chase Bank NA; C. Guaranty Agreement ('JPMCB') executed as of 5 August 2007 in favour of JPMorgan Chase Bank NA; D. Amended and Restated Guaranty Agreement executed as of 31 July 2007 in favour of Bank of America, NA; ('Relevant Guarantees'); (iii) the Relevant Guarantees might significantly affect the state of affairs of CPL and its controlled entities in financial years subsequent to the year ended 30 June 2007; (iv) a major liability had been wrongly classified in the consolidated balance sheet of Centro Properties Limited lodged with the Australian Securities Exchange on or about 9 August 2007; (b) by reason of the matters referred to in paragraph (a) above, he ought to have known that CPT Reports did not comply with the Act, in that: (i) in breach of s 296 of the Act, the CPL Financial Report did not comply with the accounting standards in that: A. contrary to accounting standard AASB 101, interest bearing current liabilities of the consolidated entity totalling $1,514,097,581 were classified and shown in the financial statements as non-current liabilities; B. contrary to accounting standard AASB 110, the notes to the financial statements did not disclose that after the reporting date CPTM as responsible entity of CPT had given the Relevant Guarantees; (ii) in breach of s 297 of the Act, the financial statements and notes in the CPT Financial Report did not give a true and fair view of the financial position of the consolidated entity in that: A. the financial statements represented that the interest bearing current liabilities of the consolidated entity were $1,096,936,000 when in fact the current liabilities of the consolidated entity were $2,611,033,581; B. contrary to accounting standard AASB 110, the notes to the financial statements did not disclose that after the reporting date CPTM as responsible entity of CPT had given the Relevant Guarantees; (iii) in breach of s 298 of the Act, the CPT Directors' Report did not give details of the Relevant Guarantees when those details were required to be given in the report by ss 299(1)(d) and 299A of the Act; (c) he failed to take all reasonable steps to rectify that non-compliance; and thereby: (d) contrary to s 601FD(1)(f) of the Act, he failed to take all steps that a reasonable person in his position would take to ensure compliance by CPTM with ss 295A, 296, 297 and 298 of the Act; (e) he failed to exercise the degree of care and diligence required by s 601FD(1)(b) of the Act; ('Second Contravention') 3. The eighth defendant, Romano George Nenna, contravened s 601FD(3) of the Act in relation to Centro Retail Trust ('CRT') by his conduct as the Chief Financial Officer of Centro MCS Manager Limited ('CMCSM'), the responsible entity of CRT, on or about 4 September 2007, in recommending to its directors a resolution to approve the annual financial report of CRT for the year ended 30 June 2007 ('CRT Financial Report') in circumstances where: (a) he knew that: (i) as at 30 June 2007 CRT and its controlled entities had liabilities totalling $598,292,097 which were due for repayment before 30 June 2008 and in relation to which or any part of which neither CRT nor any relevant entity had an unconditional right to defer repayment for at least 12 months after 30 June 2007; (ii) a major liability had been wrongly classified in the consolidated balance sheet of Centro Properties Limited lodged with the Australian Securities Exchange on or about 9 August 2007; (b) by reason of the matters referred to in paragraph (a) above, he ought to have known that CRT Financial Report did not comply with the Act, in that: (i) in breach of s 296 of the Act the CRT Financial Report did not comply with the accounting standards in that contrary to accounting standard AASB 101, interest bearing current liabilities of the consolidated entity totalling $598,292,097 were classified and shown in the financial statements as non-current liabilities; (ii) in breach of s 297 of the Act, the financial statements and notes in the CRT Financial Report did not give a true and fair view of the financial position of the consolidated entity in that the financial statements and notes represented that the interest bearing current liabilities of the consolidated entity were zero when in fact the interest bearing current liabilities of the consolidated entity were $598,292,097; (c) he failed to take all reasonable steps to rectify that non-compliance; and thereby: (d) contrary to s 601FD(1)(f) of the Act, he failed to take all steps that a reasonable person would take if they were in his position to ensure compliance by CMCSM with ss 295A, 296, 297 and 298 of the Act; and (e) he failed to exercise the degree of care and diligence required by s 601FD(1)(b) of the Act.

AND THE COURT ORDERS THAT: 4. The eighth defendant, Romano George Nenna, is disqualified from managing corporations for a period of two years from 4.30pm on 10 October 2011. 5. The eighth defendant pay one-eighth of the plaintiff's costs (including reserved costs) of and incidental to this proceeding other than costs (including reserved costs) incurred on and after 4 April 2011 up to and including 27 May 2011. I certify that the preceding two hundred and twenty-nine (229) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Middleton.