ASIC vs ASX in a game of CHESS

G’day.

Welcome to Point Blank. We’ve got the latest insights for you to start your working week.

Today’s brief:

• An absolute discretion to terminate isn’t absolute

• Catholic Church escape responsibility for abuse by its priests, High Court rules

• Big banks whacked with $350m rural bank levy

 💼 Practice Points

• A Victorian SC decision reined in the concept of ‘absolute discretion’ in contract terminations. In Eastbound Estate v DC Consolidated, DC tried to scrap an off-the-plan deal, claiming subdivision requirements were too tough to meet. The Court wasn’t buying it. Turns out, ‘absolute discretion’ isn’t a free pass— it doesn’t import unfettered discretion. Reliance on a termination right must be reasonable and justifiable. In addition, any qualifying language (eg, ‘too onerous’ or ‘reasonable’) requires careful analysis. DC failed to back up its claim, and Eastbound got the green light to complete the deal. Moral of the story? Absolute discretion isn’t absolute – clients cannot pull the plug without reasonable justification.

• ASIC is expected to unveil crypto guidance before the end of the year. But crypto is not the regulator’s enforcement priority for 2025. ASIC focuses on 12 key areas, including a focus on the super and insurance industries, greenwashing, insider trading, cyber-security failures and auditor misconduct. Last year, ASIC conducted 25% more investigations and brought 23% more proceedings.

• ASX fires back at ASIC in the regulator v regulator battle. ASIC accused the exchange of misleading the market over the CHESS replacement project’s timeline. While accepting there were delays, ASX in its defence told ASIC to jog on, maintaining that it did not breach the law. In the alternative, ASX points the finger at its tech vendor, Digital Asset Holdings, which assured them everything was on track.

🏘️ Word on the Street 

• Gilbert + Tobin gets a facelift.

• UK law firm DWF has poached 9 insurance partners from Hall & Wilcox to fuel its Aussie expansion, with most of them setting up shop in Sydney. H&W CEO Graydon Dowd is playing it cool, calling the move "inevitable”.

• Sparke Helmore lures workplace team from HWL Ebsworth as partner Thea Price and her team of four jump ship.

📢 Talking Points

• Senator Linda Reynolds has come clean about giving incorrect evidence at the Bruce Lehrmann criminal trial. She initially claimed she wasn’t told that Higgins had stayed overnight at Parliament House—only to admit later she’d been informed by Parliament security, who reported Higgins left at 10 am the following day. Her excuse? A poor memory.

• Law firms, it’s time to face the music. A recent survey from ANU and Uni Melb reveals that 87% of lawyers in Vic, WA, and NSW have faced some form of “incivility” at work, including being ignored, condescending remarks, unwanted personal discussions and having their professional judgment questioned.

• The Catholic Church is not responsible for abuse by its priests. Following an appeal from the Roman Catholic Diocese of Ballarat, the High Court sided with the Church, ruling it’s not vicariously liable for the abuse committed by priest Father Bryan Coffee. The Court reasoned that vicarious liability doesn’t apply to the priest-church relationship because it’s not a formal employment arrangement.

• And in case you missed it, yes Jake Paul did win against world heavyweight champion Mike Tyson. The eight-round fight, streamed live on Netflix, was scored 80-72, 79-73 and 79-73 in favour of Paul, who is 31 years younger than Tyson. Meanwhile, the Wallabies crushed Wales 52-20 in Cardiff, with Tom Wright and Matt Faessler scoring a hat-trick of tries each.

🏦 The Treasury

🤝 Deal Room

• No need to panic over handbag prices just yet. The FTC blocked the $8.5bn merger between Tapestry (Coach, Kate Spade) and Capri Holdings (Michael Kors, Versace, Jimmy Choo), arguing it would crush competition and lead to higher prices. The two companies have now agreed to cancel the deal.

• Cuscal’s ASX listing is a go, with $170m in commitments covering 51% of the offer. The share price is set at $2.50, or 13.1x its forecasted FY2025 earnings.

• BHP CEO Mike Henry is betting big on copper. He predicts the energy transition will drive $250bn in copper investment over the next 10 years, and as new deposits become harder to find, expect more M&A action in the copper space.

🏗 Sector Specific

Diggers

• Russia has hit pause on enriched uranium exports to the US sparking concerns over potential supply disruptions for US nuclear reactors—responsible for nearly 20% of the country’s power. It’s seen as payback for the US ban on Russian uranium, signed by Biden in May 2024.

• A Brazilian Court has let BHP, Vale and Samarco off the hook for the 2015 Samarco dam disaster, ruling there was insufficient evidence to tie their actions to the tailings failure. But it ain't over until the fat lady sings—Brazil’s Federal Prosecutor’s Office is considering an appeal. Meanwhile, this acquittal could bolster BHP's defence in its UK environmental liability class action involving over 600,000 claimants.

• MinRes’ governance crisis is spiralling. The company gave rent relief to companies tied to Kristy-Lee, daughter of MinRes MD Ellison. After the ASX hit them with a “pls explain,” MinRes admitted it was a related party transaction that should have been disclosed to shareholders. They’ve now cancelled the rent subsidies and are demanding $158k back.

Fin

• Big Super’s in a bind. With retirees eager to cash out, super funds will start feeling the squeeze—especially since their investments are tied up in illiquid assets. Looks like members may have to put their retirement plans on pause.

• With over 40% of financial scams starting on social media, Westpac calls for tougher "know your advertiser" rules, urging platforms like Meta to ensure anyone advertising financial products can prove they’re licensed.

• Westpac will shoulder over $100m under a new rural bank levy proposed by the Albanese Government. CBA and Macquarie would each be hit with a $75m bill, ING $60m, and ANZ and HSBC $20m. Meanwhile, Bendigo and Adelaide Bank would walk away with $200m from the annual pool. NAB is a surprising winner, with a $75m injection from the pool.

Tech

• AI start-up throws in the towel after raising $60m. Administrators have begun to auction off Hivery’s assets since the Sydney start-up capital went dry despite the venture backing from Blackbird Ventures, Tiger Global Management and the like. Blackbird has even written off its stake as it values the former AI contender at zero. The founders say they “gave it everything”, but broader concerns linger for VC funds, which are warning of “zombie” companies that were boosted with considerable capital in the bull market era but which have since flatlined.

Retail & Real Estate

• Woolworths and Coles have ironically joined forces to defend the price manipulation class action, which commenced in the Federal Court by law firm Gerard Malouf & Partners. The proceedings run alongside ACCC’s lawsuit against the supermarket giants for the same allegations.

• Lendlease avoided a board spill by passing its remuneration report with a 91% in favour vote – a backflip from the 39.8% of shareholders that protested the report last year. Two consecutive annual protest votes of 25% or more against its remuneration report are enough to trigger the leadership spill. Subject to selling certain assets, Lendlease will launch a ~$500m share buyback.

🧠 Word Guess

• Initial cut supports risky growth (5)