Case against Westpoint duo collapses
Mr Carey, whose property investment business Westpoint failed in 2006 owing investors more than $388 million, told BusinessDay he would sue the Commonwealth over the aborted trial, with his legal costs at least $500,000 and his reputation damaged. "This has hung over my head for the last five years and I've always maintained that I acted honestly," Mr Carey said. "I will definitely be suing ASIC to get back my cost and damages. What ASIC are facing is effectively wrongfully accusing someone."
In a brief statement released on Tuesday night the Australian Securities and Investments Commission said it had located an important document from a third party that ended its case against Mr Carey and his deputy Mr Rundle in the District Court of Western Australia. "In accordance with ASIC's procedural fairness obligations, ASIC immediately disclosed the document and copies were given to Mr Carey and Mr Rundle, and the court."
At the centre of the case was the allegation that Mr Rundle and his business Westpoint dishonestly backdated the transfer of an option to buy Perth's Warnbro Fair Shopping Centre knowing that the company was battling to survive.
It is believed the document is a file from auditor KPMG proving the option to buy the shopping centre was extended, and therefore the transfer was not backdated as alleged.
A spokesman for ASIC said the regulator would not comment further on the failed case.
"Following an assessment of the document in the context of the prosecution's case, the Commonwealth Director of Public Prosecutions yesterday advised the District Court of Western Australia that the case should proceed no further and filed notices of discontinuance," an ASIC statement said.
Frequently Asked Questions about this Article…
The asset-stripping case against former Westpoint officers Norman Carey and Graeme Rundle collapsed after a surprise emergence of a key document two weeks into the trial. ASIC located the document from a third party, disclosed it to the defendants and the court, and the Commonwealth Director of Public Prosecutions advised the District Court of Western Australia that the case should proceed no further, filing notices of discontinuance.
Norman Carey and Graeme Rundle were senior figures at property investment company Westpoint. Westpoint failed in 2006, owing investors more than $388 million. The trial involved allegations about actions taken during the company's collapse, including a disputed transfer of an option to buy the Warnbro Fair Shopping Centre.
According to the article, ASIC located an important third-party document during the trial and immediately disclosed it. It is believed to be an auditor's (KPMG) file showing the option to buy the Warnbro Fair Shopping Centre was extended, which undermined the prosecution’s backdating allegation and led the DPP to discontinue the case.
The prosecution alleged that Graeme Rundle and Westpoint dishonestly backdated the transfer of an option to buy Perth's Warnbro Fair Shopping Centre while the company was struggling. The newly disclosed document is believed to show the option had been extended, meaning the transfer was not backdated as alleged.
Yes. Norman Carey told BusinessDay he would sue ASIC (and effectively the Commonwealth) to recover legal costs and damages. The article notes his legal costs are at least $500,000 and he said his reputation had been damaged.
ASIC said it had located an important document from a third party and immediately disclosed copies to Carey, Rundle and the court, while an ASIC spokesman said the regulator would not comment further. After assessing the document in the context of the prosecution's case, the Commonwealth Director of Public Prosecutions advised the court the case should proceed no further and filed notices of discontinuance.
No. The article does not say that investors will receive compensation. It reports the criminal case against the two former officers was discontinued and notes Westpoint's 2006 collapse left investors owed more than $388 million, but it does not mention any compensation or civil recovery outcomes for investors.
As described in the article, when the Commonwealth Director of Public Prosecutions filed notices of discontinuance it meant the prosecution formally withdrew the charges and the District Court trial would not continue. In practical terms, the criminal case was discontinued and will not proceed to judgment on those charges.
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