On 26 August 2025, Jackman J of the Federal Court of Australia handed down a penalty decision in ASIC v TerraCom Ltd (No 3) [2025] FCA 1017, ordering TerraCom to pay a $7.5 million penalty and an additional $1 million in respect of ASIC’s costs.
The decision marks the finalisation of ASIC’s first enforcement of the anti-victimisation civil penalty provisions in Part 9.4AAA of the Corporations Act 2001 (Corporations Act), introduced in 2019 as part of amendments aiming to enhance whistleblower protections.
The penalty had been agreed between ASIC and TerraCom, and was ultimately adopted by the Court. The outcome provides insights both into ASIC’s enforcement stance, and how a Court will approach issues of penalty for breach of whistleblower protection provisions.
Background
Our article published when ASIC first brought these proceedings in 2023 is available at this link, and sets out the details of the whistleblower allegations and the proceeding.
In the penalty hearing, TerraCom admitted that it engaged in one contravention of s 1317AC(3) of the Corporations Act. However, there were three publications as part of this contravention, being two ASX announcements and the publication of an open letter through the Australian Financial Review. Each of these publications named the whistleblower and made various statements about him making false allegations, and emphasising that he had been made redundant.
Related proceedings brought by ASIC against TerraCom’s managing director and former officers were ultimately unsuccessful, though these were not in respect of breaches of the whistleblower provisions (refer further to ASIC’s media release on that case here).
Key takeaways
- Example of “objectively serious” victimisation: Jackman J noted that the admissions as to the detriment caused to the whistleblower, characterised as hurt, humiliation, distress and embarrassment, and damage to reputation, were “objectively serious”.
- Broad concept of detriment: Relatedly, the Court confirmed that hurt, humiliation, distress and embarrassment fit within the broad meaning of ‘detriment’ under the Corporations Act.
- Significant penalty: Against a maximum penalty of $24.5 million, the Court found the $7.5 million agreed figure to be appropriate, “albeit at very much the higher end of the range of appropriate penalties”.
- Remedying non-compliance is key: The Court placed emphasis on the steps subsequently taken to review TerraCom’s whistleblower policy and provide training, to ensure there is a corporate culture conducive to compliance and to avoid repetition of a breach.
- Relevance of cooperation: The Court acknowledged TerraCom’s cooperation, including participating in a mediation, reaching an ultimate agreed position, admitting contravention and sparing the Court and ASIC the expense of a contested liability hearing. However, the Court noted that the fact that TerraCom had not made concessions at an earlier stage in the matter, and made a bona fide but erroneous claim for legal professional privilege, should not be regarded as evidencing a lack of cooperation or count against a party when determining the appropriate penalty.
Consideration of the agreed penalty
The maximum penalty open to the Court under s 1317G of the Corporations Act was $24.49 million, being 10% of TerraCom’s annual turnover for the 12-month period ending in the month of the contravention.
In concluding that the penalty agreed by ASIC and TerraCom was appropriate, Jackman J had regard to:
- the statutory framework of the whistleblower provisions, particularly around victimisation. Specifically, it is a contravention of s 1317AC of the Corporations Act if a person causes or threatens to cause detriment to another person because they believe or suspect that the other person has made, may make, or could make a protected disclosure; and
- the general principles applicable where the parties to a civil penalty proceeding have agreed and jointly proposed a penalty to the Court, with a particular focus on the need for specific and general deterrence.
His Honour ultimately concluded that the penalty was appropriate, “albeit at very much the higher end of the range of appropriate penalties”. The appropriateness was measured against factual matters required for consideration when making penalty orders, including of particular interest:
- the “objectively serious” nature of the victimisation given the admissions made;
- that “the tone and content of the Announcements caused detriment to Mr Williams in the form of hurt, humiliation, distress and embarrassment, and damage to reputation”;
- that TerraCom admitted that part of the reason it published the announcements was because it believed or suspected that Mr Williams may have made a protected whistleblower disclosure;
- that the conduct was deliberate, occurring on three separate occasions;
- that the contravention arose out of the conduct of senior management, including the CEO and CFO;
- efforts made by TerraCom since 2021 to introduce a whistleblower framework, including a policy and mandatory training;
- TerraCom’s admission of contravention;
- the $7.5 million amount having “the necessary “sting” and not being an amount that is likely to be viewed as the cost of doing business.
Cooperation with the regulator in civil penalty cases
Jackman J also made comments about assessing a party’s disposition to co-operate with ASIC, in relation to a contravention, that are of note for all civil penalty proceedings.
In particular, the Court observed that the fact that TerraCom did not enter into a Statement of Agreed Facts and Admissions (SAFA) at an earlier stage should not count against TerraCom when determining the appropriate penalty to be imposed. A company or person alleged to have contravened a civil penalty provision is entitled to defend themselves without thereby attracting the risk of the imposition of a more serious penalty than would otherwise be imposed (although an admission of a contravention, like a plea of guilty, is ordinarily a matter to be taken into account in mitigation).
Additionally, the Court considered joint submissions that had referred to TerraCom having resisted production to ASIC of a report on the grounds of legal professional privilege. The Court observed:
The fact that a party may have made a bona fide but erroneous claim for legal professional privilege in civil penalty proceedings should not be regarded as evidencing a relevant lack of cooperation with the regulator, and should not lead to any adverse consequences for the party beyond an order for costs of the disputed claim for privilege.
Insights into ASIC’s stance on enforcement
While the SAFA is not publicly available, ASIC’s media release on the decision offers some insight into its views on the enforcement of whistleblower protections. Specifically, ASIC Deputy Chair Sarah Court said:
ASIC took this case because whistleblowers shed light on important issues. Where corporations engage in conduct that harms whistleblowers, even unintentionally, they risk disincentivising others from coming forward. Companies should always properly consider and respond to the issues raised by whistleblowers.
The level of penalty sought by ASIC (and agreed by TerraCom) signals the seriousness with which ASIC regards the contravention of the whistleblower protections against victimisation. Following ASIC’s success in this matter, we will be closely monitoring for enforcement of the protections across a wider range of circumstances.
Caution when facing potential detriment claims
By confirming that hurt, humiliation, distress and embarrassment fall within the concept of ‘detriment’, the Court indicated how broadly that term may apply. This may not come as a surprise, given the term is defined in s 1317ADA of the Corporations Act to include, as relevant examples, “harm or injury to a person, including psychological harm”, and “damage to a person’s reputation”.
However, in light of the increasing trend for workers to seek to assert entitlement to whistleblower protections, and propensity for both regulators and individuals to bring such claims (like the claims discussed in our recent update), companies should take care and seek advice in relation to the specific risks and mitigating steps to be taken when facing potential whistleblower disclosures or claims.
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