Steve Vizard - Legal Proceedings

Legal Proceedings

In 1996, Vizard was appointed a Director of the telecommunications company Telstra Corporation Limited, a position he held until his decision to retire on 17 September 2000 and not stand for re-election to the board.

After his retirement from Telstra, Vizard became involved in three separate legal proceedings, primarily related to the activities of the Vizard family's former bookkeeper, Roy Hilliard. In 2001 the Vizard family reported to the police money missing from their family accounts, and Hilliard was subsequently charged with stealing and falsifying the accounts of the Vizard family companies, and in 2005 Hilliard was convicted of falsifying accounts. This led to Hilliard's conviction and sentence to three years jail.

In the second legal proceedings, Hilliard faced civil action related to the allegations of misappropriating money from the Vizard companies, with Vizard's bank Westpac commencing civil proceedings against Hilliard in 2001. Westpac had conducted an investigation of the fraud and paid out to Vizard's companies some of the money the bookkeeper had taken, and then sued the bookkeeper to recover some of the payout. Vizard was a witness in Westpac's action. In December 2006, the Supreme Court of Victoria found in favour of Westpac and ordered Hilliard to repay over $2 million in funds misappropriated from the Vizards to the bank, plus interest. The judge also rejected claims Hilliard had made against Vizard relating to the use of overseas tax havens and that Hilliard had returned the stolen moneys to Vizard. In September 2009, an appeal by Hilliard against the judgement against him was rejected by the Full Court of the Supreme Court of Victoria, which affirmed that Hilliard had misappropriated over $3 million from Vizard, rejected Hilliard's claims against Vizard, and ordered Hilliard to repay the missing moneys and costs.

The third legal action involved Vizard directly and arose out of allegations made by Hilliard in 2003 at the criminal trial of his former bookkeeper. Hilliard alleged that Vizard had insider traded while a director of Telstra. The Australian Securities and Investments Commission (ASIC) followed-up the allegations with an 18 month investigation, including searching Vizard's home and office in December 2003. ASIC then formally advised that it would not continue the investigation, as it had no evidence sufficient to prosecute Vizard for inside trading or any other crime.

Hilliard was represented by controversial barrister Peter Hayes QC who made the allegations against Vizard reported in the media. Hayes suffered from bipolar disorder and was subsequently found naked and dead in an Adelaide hotel room by a former Gypsy Joker Outlaw Motorcycle Club biker, and it is it alleged that toxicology revealed he had ingested cocaine and heroin immediately before his death and that lethal drug overdose was the cause of Hayes death.

On 28 July 2005, the Commonwealth Director of Public Prosecutions formally announced that they had no provable evidence to proceed with any criminal case against Vizard. Contrary to the speculation of some media commentators, the Commonwealth Director of Public Prosecutions Damian Bugg QC along with ASIC Chairman Jeff Lucy vigorously denied assertions by some sections of the media that they had "gone soft" on Vizard. ASIC Chairman Lucy made clear to the Parliament in his report of 13 September 2005 that there had never been any provable criminal case against Vizard despite the most vigorous examination by ASIC, and that this lack of any criminal case against Vizard was a view shared by both ASIC and the Attorney General: "In this case, criminal charges were not pursued against Mr. Vizard because the DPP was not satisfied that there was admissible, substantial and reliable evidence of the offence and therefore there were not reasonable prospects of securing a conviction…Whilst this was a decision for the DPP, it was also consistent with senior counsel advice that ASIC had independently received....When ASIC announced on 4 July that we were pursuing civil penalties against Mr. Vizard, there were some suggestions in the press that we had gone soft or that we had somehow been nobbled by government. I have unequivocally rejected those suggestions. They are entirely without foundation."

One of the key issues in the case was that the trades in question had not been made by Vizard, but instead by a company called CTI, of which Vizard's accountant Gregory Lay was the sole shareholder and director. A Vizard family company lent CTI money to invest and had an agreement to receive back proceeds (less a management fee). Lay gave detailed statements to ASIC but none which supported any case agasinst Vizard or connected the trades Lay had made, to Vizard.

Separately, later in 2005 ASIC said it would commence civil proceedings against Vizard for breaching his director's duties. ASIC's case was that Vizard had breached Sections 183 and 232 of the Corporations Act 2001 (C'th). ASIC made no allegations of dishonesty against Vizard in those civil proceedings.

Vizard and ASIC settled the civil proceedings in 2005 on the basis that Vizard would not contest them, that ASIC made no allegations of dishonesty against Vizard, that a fine of $390,000 be imposed and Vizard agree to be disqualified from acting as a company director for between 3 and 5 years. That settlement took the form of an "agreed statement of facts" jointly presented to the Federal Court by Vizard's and ASIC's lawyers, and Vizard agreeing the court should impose penalties for a breach of his duties as a director. In his judgement handed down on 28 July 2005, Justice Raymond Finkelstein accepted that Vizard had breached Sections 183 and 232 of the Corporations Act 2001 (C'lth) through his activities. ASIC proposed a $130,000 fine per offence and 5 years disqualification. Justice Finkelstein disregarded the agreement reached between ASIC and Vizard and instead ordered a disqualification of 10 years.

The head of ASIC, Jeff Lucy, conceded that there was never a criminal case, or any case involving dishonesty, against Vizard and that the media outrage was largely caused by ASIC's failure to properly communicate the full facts to the media.