An asset-stripping case against former Westpoint officers Norman Carey and Graeme Rundle collapsed on Tuesday night after the surprise emergence of a key document two weeks into the trial.
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 rising to 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," he said. "I will definitely be suing ASIC to get back my costs and damages. What ASIC are facing is effectively wrongfully accusing someone."
Mr Carey likened his treatment to the prosecution and jailing of Andrew Mallard, a West Australian who was wrongfully convicted of murder in 1995 and sentenced to life imprisonment. Mr Mallard was released from prison in 2006 after his conviction was overturned.
In a brief statement on Tuesday night, ASIC said it had located an important document from a third party that ended its case against Mr Carey and 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."
The failed case centred around 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 the company was battling to survive.
It is believed the document is a detailed file from auditor KPMG, which proves the option to buy the shopping centre was actually extended, and therefore the transfer was not backdated as alleged. A media spokesman for ASIC said the regulator would not comment further on the failed case against the businessmen.
"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.