The judge in a landmark greenwashing case said superannuation fund Active Super’s defence for investing in coal and gambling companies when it had promised customers that it wouldn’t was so farfetched it would not be believed by any reasonable person.

Federal Court Justice David O’Callaghan ruled on Wednesday that Active Super had misled and deceived customers about its investments in companies such as Whitehaven Coal and SkyCity Entertainment, paving the way for hefty penalties. Fines would be determined at a later date.