Accessibility Links
Home
Main Menu
Jurisdiction
Judges
Registrars
Courts & TribunalsAdministered by the Federal Court
International Programs
Corporate Information Reports, plans and other publications
Freedom of Information
Employment
National Court Framework
Access to Court Files & Transcript
Check the progress of a caseListing dates, Orders & links to judgments
Research Requests
Registry ServicesWhat Registries can & cannot do
Interpreters
Help for people with disabilities
Technology and the Court
Powers of a Registrar
Assisted Dispute Resolution (ADR)
Subscribe to Judgments & Events by NPA; Practice News, Daily Court Lists and more
National Practice Areas (NPAs)
Court Rules, Acts & Regulations
Practice Documents
Class Actions
Consultation & Liaison User group meetings, Harmonised Rules Committees (Bankruptcy & Corporations)
Appeals
Guides Including Bankruptcy, Corporations, Migration, Administrative & Constitutional Law and Human Rights; Communicating with the Court; Expert witnesses.
Use of Communication Devices
Forms Prescribed Under: Other Forms:
Difference Between Fees & Costs
Court Fees About Court fees including exemptions, deferral & refunds
Filing Filing & lodgement
Legal Costs
Interest Rates Pre-judgment & post-judgment interest rates
Court Sitting Dates
  • 2024
    • 5 February - 20 December
Full Court & Appellate Sitting Dates
  • 2024
    • 19 February - 1 March
    • 6 - 28 May
    • 5 - 30 August
    • 4 - 26 November
  • 2025
    • 3 - 28 March
    • 28 July - 29 August
    • 3 - 28 November
Daily Court Lists
Select state
Select a state registry to view the current court list: Select a state registry to view the current court list.
click map Western Australia Northern Territory South Australia Queensland New South Wales Victoria Tasmania Australian Capital Territory Australia
Register to receive daily court lists by email soon after they are published. Subscribe
Future Listings Find future hearing times and dates. Go to Federal Law Search
Library
Annual Reports
Judges' Speeches Current and former judges, including Welcome and Farewell ceremonies
Videos & Podcasts Videos, podcasts and online streaming
GlossaryGlossary of legal terms
Judgments About the judgments collection, including FAQs
I am a Party -
Information for Litigants
Jury Service
I am a Practitioner I am a witness I have been Subpoenaed
Guides
Online Services
You are here:

Federal Court of Australia

Australian Securities and Investments Commission v LGSS Pty Ltd (No 2) [2024] FCA 665

File number(s):

NSD 847 of 2023

Judgment of:

O’CALLAGHAN J

Date of judgment:

20 June 2024

Catchwords:

BANKING AND FINANCIAL INSTITUTIONS – “greenwashing” – where defendant contravened ss 12DB(1)(a) and 12DF(1) of the Australian Securities and Investments Commission Act 2001 (Cth) by making false or misleading representations, and engaging in conduct liable to mislead the public in relation to investments made by superannuation fund – form of declarations

Legislation:

Australian Securities and Investments Commission Act 2001 (Cth) ss 12DB(1)(a), 12DF(1)

Cases cited:

Australian Securities and Investments Commission v LGSS Pty Ltd [2024] FCA 587

Rural Press Ltd v Australian Competition and Consumer Commission (2003) 216 CLR 53

Division:

General Division

Registry:

New South Wales

National Practice Area:

Commercial and Corporations

Sub-area:

Regulator and Consumer Protection

Number of paragraphs:

6

Date of hearing:

Determined on the papers

Counsel for the Plaintiff:

J Hewitt SC with J Buncle

Solicitor for the Plaintiff

Australian Securities and Investments Commission

Counsel for the Defendant

HK Insall SC with AE Smith

Solicitor for the Defendant

Allens

ORDERS

NSD 847 of 2023

BETWEEN:

AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Plaintiff

AND:

LGSS PTY LTD ACN 078 003 497 AS TRUSTEE FOR LOCAL GOVERNMENT SUPER ABN 28 901 371 321

Defendant

order made by:

O’CALLAGHAN J

DATE OF ORDER:

20 JUNE 2024

THE COURT DECLARES THAT:

1.    During the Relevant Period, LGSS, in trade or commerce, made representations in connection with the supply of financial services, and the promotion of the supply of financial services, in contravention of s 12DB(1)(a) of the ASIC Act, in that:

(a)    LGSS made the representation at item 1 of Annexure A from 25 May 2021 to 28 February 2023, but contrary to that representation it in fact held the investments identified in Table 1 of Annexure B, each of which were investments in companies that derived more than 10% of their revenue from gambling;

(b)    LGSS made the representation at item 2 of Annexure A from 25 May 2021 to 1 March 2023, but contrary to that representation it in fact held the investments identified in Table 1 of Annexure B, each of which were investments in companies that derived more than 10% of their revenue from gambling;

(c)    LGSS made the representation at item 5 of Annexure A from 28 October 2021 to 1 March 2023, but contrary to that representation it in fact held the investments identified in Table 1 of Annexure B, each of which were investments in companies that derived more than 10% of their revenue from gambling;

(d)    LGSS made the representation at item 6 of Annexure A from 28 October 2021 to 1 March 2023, but contrary to that representation:

(i)    it in fact held the investments identified in Table 1 of Annexure B, each of which were investments in companies that derived more than 10% of their revenue from gambling; and

(ii)    it in fact held the investments identified in Table 4 of Annexure B, each of which were investments in companies that derived revenue from oil tar sands;

(e)    LGSS made the representation at item 11 of Annexure A from 19 January 2022 to 8 August 2023, but contrary to that representation it in fact held the investments identified in Table 1 of Annexure B, each of which were investments in companies that derived more than 10% of their revenue from gambling; and

(f)    LGSS made the representation at item 13 of Annexure A from October 2021 to May 2023, but contrary to that representation it in fact held the investments identified in Table 5 of Annexure B, each of which were investments in companies that derived one-third or more of their revenue from coal mining;

(g)    LGSS made the representation at item 15 of Annexure A from 20 December 2022 to March 2023, but contrary to that representation it in fact held the investments identified in Table 3 of Annexure B, each of which were investments in companies that derived revenue from Russia;

(h)    LGSS made the representation at item 16 of Annexure A from 20 December 2022 to March 2023, but contrary to that representation it in fact held the investments identified in Table 3 of Annexure B, each of which were investments in companies that derived revenue from Russia;

(i)    LGSS made the representation at item 17 of Annexure A from May 2022 to April 2023, but contrary to that representation it in fact held the investments identified in Table 3 of Annexure B, each of which were investments in companies that derived revenue from Russia;

(j)    LGSS made the representation at item 18 of Annexure A from 20 December 2022 to March 2023, but contrary to that representation:

(i)    it in fact held the investments identified in Table 1 of Annexure B, each of which were investments in companies that derived more than 10% of their revenue from gambling; and

(ii)    it in fact held the investments identified in Table 4 of Annexure B, each of which were investments in companies that derived revenue from oil tar sands.

2.    During the Relevant Period, LGSS, in trade or commerce, engaged in conduct that was liable to mislead the public as to the characteristics of the investments made by LGSS on behalf of Active Super in contravention of s 12DF(1) of the ASIC Act, in that:

(a)    LGSS engaged in the conduct referred to in sub-paragraphs (a) to (j) in Declaration 1 above;

(b)    LGSS made the representation at item 19 of Annexure A from 1 July 2022 to 1 May 2023, but contrary to that representation:

(i)    it in fact held the investments identified in Table 1 of Annexure B, each of which were investments in companies that derived more than 10% of their revenue from gambling;

(ii)    it in fact held the investments identified in Table 3 of Annexure B, each of which were investments in companies that derived revenue from Russia;

(iii)    it in fact held the investments identified in Table 4 of Annexure B, each of which were investments in companies that derived revenue from oil tar sands;

(c)    LGSS made the representation at item 20 of Annexure A from 25 May 2021 to 30 June 2022, but contrary to that representation it in fact held the investments identified in Table 5 of Annexure B, each of which were investments in companies that derived revenue one third or more of their revenue from coal mining.

THE COURT NOTES THAT:

A.    In these declarations, the following terms have the following meanings:

ASIC Act means the Australian Securities and Investments Commission Act 2001 (Cth);

Active Super means the fund known as Local Government Super (ABN 28 901 371 321);

LGSS means LGSS Pty Limited (ACN) as trustee for Local Government Super (ABN 28 901 371 321);

Relevant Period means the period from 1 February 2021 to 30 June 2023.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

ANNEXURE A

Representations

Annexure B

Active Super’s investments contrary to representations

1.    Gambling investments

2.    [Not used]

3.    Russian investments

4.    Oil Tar Sands investments

5.    Coal mining investments

REASONS FOR JUDGMENT

O’CALLAGHAN J

1    On 5 June 2024, I found that the plaintiff, ASIC, was entitled to declarations as to contraventions by the defendant, LGSS Pty Ltd, of s 12DB(1)(a) and s 12DF(1) of the Australian Securities and Investments Commission Act 2001 (Cth) by making certain false or misleading representations, and engaging in conduct liable to mislead the public in relation to investments made by the superannuation fund, of which LGSS is the trustee, now known as Active Super, during 1 February 2021 to 30 June 2023. See Australian Securities and Investments Commission v LGSS Pty Ltd [2024] FCA 587 (Reasons).

2    As explained in the Reasons, I found that LGSS had engaged in what is colloquially called “greenwashing” by making false or misleading representations to members and potential members of the fund about their “green” or “ESG” credentials.

3    I ordered that the matter be listed for further hearing, and said that I would hear the parties at that hearing on the appropriate form of declaratory relief in light of the Reasons. See Reasons at [238].

4    Following publication of my Reasons, and prior to the further hearing being listed, the parties agreed upon a form of declaratory orders and provided those proposed orders to my chambers on 19 June 2024.

5    In this case, I consider it is appropriate to make the declarations sought by the parties, as there is utility in setting out the basis of the liability found and, in turn, the basis of any penalties and consequential relief to be imposed. See Rural Press Ltd v Australian Competition and Consumer Commission (2003) 216 CLR 53 at 92 [95] (Gummow, Hayne and Heydon JJ). In addition, the declarations are appropriate because they serve the public interest in defining and publicising the type of conduct that constitutes a contravention of the ASIC Act.

6    Pursuant to my order of 5 June 2024, the proceeding will be listed for a further directions hearing, at which I will hear the parties on the appropriate timetable for the hearing and determination of ASIC’s claims for pecuniary penalties, adverse publicity orders and injunctive relief.

I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice O’Callaghan.

Associate:

Dated:    20 June 2024

Top