A company director has been ordered not to pursue an insurance payout after he was fined a record $1 million for attempted cartel conduct.

Simon Ashton notified a claim to insurer AIG under a management liability policy, which might include cover for any penalty he was required to pay.

But Federal Court judge James Bromwich says to allow a claim would undermine the principle of deterrence.

“The penalties imposed on Mr Ashton would have no real deterrent effect if he did not have to pay them himself.”

The Australian Competition and Consumer Commission, which brought the cartel case, says Mr Ashton’s fine is the highest penalty for a competition law breach by an individual under the Competition and Consumer Act.

It asked the court for the non-indemnification order to stop him calling on the insurance policy. Mr Ashton opposed the order.

In April last year, the court found that Queensland mining equipment and services company Qteq attempted between 2017 and 2019 to enter into contracts, arrangements or understandings with cartel provisions.

In handing down penalties last month, Justice Bromwich said these attempts were carried out principally, but not solely, via Mr Ashton – the company’s CEO and later its executive chairman.

The judge fined Qteq $5 million. He says Mr Ashton’s wealth means a substantial penalty is needed to achieve personal deterrence and “general deterrence of other businessmen in his position”.

Mr Ashton has the means to pay a penalty and, as founder and a shareholder of Qteq, the company’s fine will also affect him.

The ACCC called the conduct “sustained, systematic and deliberate”.

Justice Bromwich says given there were five attempted contraventions, the maximum aggregate penalty would be $50 million against Qteq and $2.5 million for Mr Ashton.

“It should be noted that the maximum penalties for conduct of this kind have been substantially increased since the time of the attempted contraventions in this case.”

Qteq effectively ceased business in December after selling most of its assets.

Read the judgment here.