Star Decision - Key Learnings For The Employment And Safety Context

Background

On 12 December 2022, ASIC commenced civil penalty proceedings in the Federal Court against 11 current and former directors and officers of Star Entertainment Group Ltd (Star) for alleged breaches of their duties under s 180 of the Corporations Act 2001 (Cth) (the Act). 

ASIC brought claims against:

• all of Star’s non-executive directors (NEDs),
• the CEO (Mr Bekier),
• the General Counsel/Company Secretary/Chief Legal and Risk Officer (CLRO), (Ms Martin),
• the Chief Casino Officer (CCO) (Mr Hawkins), and
• the Chief Financial Officer (CFO), Mr Theodore.

The CCO and CFO admitted to breaches of their duties and, on 24 February 2025, the Federal Court penalised them by ordering the former CCO to pay a penalty of $180,000 and disqualified from managing corporations for 18 months, while the former CFO was ordered to pay a $60,000 penalty and was disqualified from managing corporations for nine months.

On 5 March 2026, Justice Lee handed down his judgement in relation to the NEDs, the CEO and the CLRO. 

What were the findings?

Justice Lee found:

• The NEDs did not breach their duties.
• The CEO and CLRO breached their duties in a number of instances. 

The proceeding has now been adjourned for the making of Orders. 

At the time of writing, it is unknown whether any of the parties will appeal the decision.

Why the case against the executives succeeded

The executives knew, or ought to have known, about serious risks: persistent suspicious cash transactions in the high-rollers room (Salon 95), major deficiencies in Star's AML/CTF controls identified by KPMG, law enforcement interest in Suncity, and misleading communications to NAB about China UnionPay cards being used for gambling. 

Despite this cascade of alarming information, critical matters were not properly escalated to the Board. Board papers largely painted a picture of a functioning compliance programme, when in fact there were numerous issues exposing Star to risk. Mere references buried in appendices to Board packs were not considered sufficient disclosure. 

Justice Lee was satisfied that a reasonable officer in their position would have taken steps to bring this information to the Board's attention and to recommend that relevant business relationships be suspended. 

Ms Martin also failed to correct misleading information provided to NAB regarding the use of China UnionPay cards, and Mr Bekier, having become aware of a NAB warning letter, failed to make further enquiries. Justice Lee held that a reasonable person in Ms Martin's role would have written to NAB and corrected the misunderstanding – the notion that allowing a lie to stand was better than telling the truth was rejected. 

Ms Martin was found to have gone so far as to remove information about Suncity and Mr Chau from the draft of a relevant Board paper prepared by a member of her team. 

Key learnings for Boards and senior leaders

1. Duties are contextual

The standard is not perfection – it is what a reasonable officer would do with the information they have, in the position they hold. The content of the duty of care varies according to the director's skills, experience and responsibilities. 

2. Information flow is everything

Governance fails when boards are not told what really matters. Senior legal and risk officers owe duties directly to the company and the Board – not just to the CEO. Executives must never filter, soften, or withhold risk. 

3. Information overload is not an excuse

Justice Lee quoted from ASIC v Healey [2011] FCA 717 that "a board can control the information it receives" and said those "sage remarks appear to have fallen on deaf ears". He was critical of "Brobdingnagian electronic document dumps masquerading as board packs" – boards that routinely receive 300–700 page packs cannot excuse inattention by pointing to volume. Responsibility lies with both management and governance processes to ensure critical risks are visible. 

4. Delegation is permitted but not abdication

NEDs may rely on management unless there are clear reasons not to. But executive officers, especially in legal and risk roles, cannot rely on delegation to avoid escalation duties. Directors cannot substitute reliance on management for their own attention to important matters that fall within the board's responsibilities. 

5. AI and technology cannot replace judgement

In a notable modern observation, Justice Lee acknowledged that directors are now commonly making informal use of AI to prepare for meetings and navigate board materials. While he recognised "considerable potential" for AI to assist, he cautioned that AI-generated summaries as a substitute for the careful reading and interrogation of board materials would "warrant caution, not least because inadequately deployed or misdirected AI may increase risk and legal exposure rather than mitigate it". 

His Honour stated that boards should discuss and deliberately govern any AI use by formal adoption of policies, rather than just wink at informal "shadow" use. The statutory obligation imposed by s 180(1) remains personal, and it requires informed human judgement. 

6. Company secretaries have a critical role

Justice Lee went beyond the usual emphasis on the chairperson's role and added that "company secretaries have a critical role in preserving role boundaries with management and promoting proper director engagement". While obiter, this should be noted by all company secretaries. 

Key learnings for those reporting to and advising Boards

1. Your role in the information chain matters

This case shows that governance failures can permeate all levels of an organisation. Problems escalated because warnings, reports and concerns did not travel up promptly, clearly or completely. Employees at lower levels of an organisation are often the first to see red flags – odd transactions, unusual behaviour, process workarounds. If something looks wrong, incomplete or risky, raise it through proper channels. Silence compounds risk. 

2. "Someone else knows" is a dangerous assumption

A recurring theme was that people assumed others would deal with it – Ms Martin assumed the CEO would escalate the issue to the Board. We often see scenarios were staff assume managers knew; managers assume someone more senior would escalate; the board assumed critical issues would be surfaced explicitly. If you have material information, it is important to ensure it is clearly passed on, and follow up if you are not sure or escalate through other established pathways. 

3. Accuracy matters more than convenience

The China UnionPay issue involved misleading explanations which were not corrected. The case provides a salient reminder never to "soften" facts to avoid friction, don't copy outdated explanations just because "that's how it's always been described", and don't rationalise incomplete answers as "good enough". If something is technically true but materially misleading, that's still needs to be corrected. 

4. Document what you raise

The Court relied heavily on contemporaneous documents, not memories or explanations given years later and the NEDs chose not to give evidence. Escalate concerns in writing (professionally and respectfully) and keep records of what you flagged and when. Documentation protects both the company and you. 

5. Escalation ≠ making decisions

Legal/risk staff were not criticised for failing to make business decisions – but for failing to inform decision-makers. Those reporting to executives have a responsibility to surface risk, not to solve everything. Justice Lee confirmed that a General Counsel / CLRO does not have a duty to make recommendations, but does have a duty to ensure the Board is properly informed, even when not specifically asked to advise on a particular issue. 

6. Culture is built bottom-up

Justice Lee was clear that governance failures weren't about one bad decision – they reflected a culture of minimising or normalising risk. All employees play a real role in culture by asking questions, challenging unclear explanations, and not letting "we've always done it this way" become the end of the conversation. This is particularly important in the context of critical compliance matters like wage-related issues and safety.

Relevance to WHS Officer Due Diligence (s 27, Work Health and Safety Act 2011 and equivalents)

Scope of duty follows actual responsibilities, not job title. Just as Ms Martin could not confine her liability to her company secretarial functions, a WHS officer cannot argue their due diligence duty is limited to a narrow slice of their responsibilities. An officer with safety oversight responsibilities – however described – will be assessed against the full scope of what they actually do. 

Active engagement and escalation are essential. Mr Bekier's failure was not ignorance – it was inaction in the face of known risk. Under s 27 of the WHS Act, officers must acquire and keep up to date knowledge of WHS matters and ensure the PCBU has appropriate resources and processes in place, and then to apply an enquiring mind. Passivity in the face of emerging safety information will not be excused. This was made clear in Gibson v Maritime New Zealand [2026] NZHC 813.

Reliance on others must be reasonable and not blind. Non-executive directors were found not liable partly because they had no reason to distrust management. In a WHS context, an officer may reasonably rely on a WHS Manager, but the officer must have appropriate processes in place to ensure reporting of key safety issues, apply appropriate resources, ask relevant questions and verify implementation of controls – the duties remain personal and non-delegable. This is consistent with Guilfoyle v Walshaw [2024] Unreported (Magistrates Court, Queensland, MAG-00149166/21(1)) and SafeWork NSW v Miller Logistics; SafeWork NSW v Mitchell Doble [2024] NSWDC 58.

Board reporting structures carry personal exposure. The Bekier judgment confirms that executives who control what information reaches the Board bear significant potential personal liability if they allow a misleading picture to be maintained. Where a WHS officer or executive is the conduit between operational safety performance and board-level reporting. 

Information overload is no excuse. An officer who claims not to have acted on a safety risk because it was "buried" in reporting may still be at risk of a finding that they “should have known” about an issue. Officers must ensure they receive information in a form they can genuinely digest and apply due diligence to. 

The information chain applies at every level. The Star decision makes clear that good governance depends on people at every level speaking clearly, accurately and early – this principle applies equally to WHS reporting, where frontline workers, supervisors and safety professionals all have a role in ensuring that risks are surfaced and documented, and escalated as appropriate. 

Further reading

HSF Kramer has also released a detailed note on this decision, available here