The NSW Supreme Court today made orders banning former officers of CTC Resources NL (CTC) for up to 14 years and imposed fines totalling $631,000. The orders follow a fresh hearing on penalties resulting from an appeal commenced by four former officers of CTC, being Mr William Forge, Mr Jozsef Endresz, Mr Allan Endresz and Ms Dawn Endresz.

Today Justice White ordered:

• Mr William Forge banned until 2014 and fined $140,000
• Mr Joszef Endresz banned until 2016 and fined $201,000
• Ms Dawn Endresz banned until 2012 and fined $134,000
• Mr Allan Endresz banned until 2021 and fined $156,000

Background

On 28 August 2002, Justice Foster of the Supreme Court of New South Wales found that Mr Forge, Mr Jozsef Endresz, and Ms Dawn Endresz, as directors of CTC, and Mr Allan Endresz, as an officer of CTC, contravened the directors’ duties and related party provisions of the Corporations Law.

The contraventions involved CTC, an Albury-based public company, paying management fees of $2,245,833 to Kamanga Holdings Pty Ltd (Kamanga) and $270,833 to Bisoya Pty Ltd (Bisoya), and making loans of $500,000 to Kamanga and $75,000 to Bisoya.

CTC was formerly Emu Hill Goldmines NL, a listed public company that was delisted on 18 December 1990.

Mr Forge, Mr Jozsef Endresz and Ms Dawn Endresz were banned from being involved in the management of a company for eight years, and ordered to pay a fine of $245,000 each.

Mr Allan Endresz was banned for 16 years and ordered to pay a fine of $200,000.

ASIC subsequently issued bankruptcy notices against Mr Forge, Mr Jozsef Endresz, Mr Allan Endresz and Ms Dawn Endresz.

The parties subsequently appealed the decision of Justice Foster, made an application for a stay of the decision and applied for an order setting aside the bankruptcy notices.

On 4 November 2002, the application for a stay was dismissed. On 11 March 2003, the Federal Magistrates Court set the bankruptcy notices aside.

In August 2003, the appeal against the decision of Justice Foster was heard.

On 28 November 2003, the Federal Court upheld an appeal by ASIC against the decision of the Federal Magistrates Court to set aside the bankruptcy notices.

On 7 December 2004, the NSW Court of Appeal dismissed the appeal of the parties against the findings that they had contravened various provisions of the Corporations Law, and in doing so, dismissed 21 grounds of appeal.

The NSW Court of Appeal upheld the twenty-second ground of appeal that there should have been a separate hearing on penalty, and ordered that the matter be remitted to a single judge for a hearing on penalty.

The NSW Court of Appeal ordered that the appellants pay three quarters of the costs of the appeal to ASIC, which are additional to the costs payable to ASIC regarding the original proceedings.

On 15 July 2001, the Corporations Act replaced the Corporations Law.

On 28 August 2003 Acting Justice Foster of the Supreme Court of NSW found that the former officers of CTC had contravened the directors’ duties and related party provisions of the Corporations Law and imposed various penalties.

The former directors of CTC appealed to the NSW Court of Appeal. The NSW Court of Appeal upheld the findings of Acting Justice Foster but remitted the matter back to the Supreme Court of NSW for a separate hearing regarding penalty.

On 31 March 2005, the former directors of CTC commenced the High Court proceedings.

In the High Court, issues were raised regarding the validity of transitional provisions contained in the Corporations Act and the validity of appointments of judges as acting judges of the Supreme Court.

The High Court held unanimously that the transitional provisions were effective and did not invalidate the decision of Acting Justice Foster.

The High Court held by a 6-1 majority that the legislation providing for the appointment of acting judges was valid.