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ASIC v ABC Fund Managers Limited

ASIC v ABC Fund Managers Limited

Case [2001] VSC 92 6 April 2001

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SUPREME COURT OF VICTORIA		Not Restricted
COMMERCIAL AND EQUITY LAW DIVISION CORPORATIONS LIST

No. 7654 of 2000

AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION	Plaintiff
v
A.B.C. FUND MANAGERS LIMITED	Defendant

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JUDGE:	Warren J
WHERE HELD:	Melbourne
DATE OF HEARING:	30 March 2001
DATE OF JUDGMENT:	6 April 2001
CASE MAY BE CITED AS:	ASIC v ABC Fund Managers Limited
MEDIUM NEUTRAL CITATION:	[2001]VSC 92

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Privilege – claim for privilege against self incrimination – whether defendant witnesses should be required to file affidavits of evidence prior to trial.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J. Peters	Australian Securities and Investments Commission
For the Defendant	Mr S.L. Tatarka	Oakley Thompson & Co

HER HONOUR:

The principal application in this proceeding is brought by the Australian Securities and Investments Commission against the Defendants A.B.C. Fund Managers Ltd (the first defendant), Wharton Partners Pty Ltd (the second defendant), Allied Securities Pty Ltd (the third defendant), A.B.C. Investment Management Pty Ltd (the fourth defendant), Tye Nominees Pty Ltd (the fifth defendant) and Lingus Pty Ltd (the sixth defendant). The Commission seeks an order to wind up a number companies and unregistered managed investment schemes. Further, the Commission seeks injunctions against the defendants retraining their activities in relation to managed funds and also seeks an accounting of all funds received from investors and subscribers to the relevant schemes.

The matter has been fixed for trial to commence on 28 May 2001. An application has been brought by the first to sixth defendants that Stephen Lynne Wharton, John James Gillies and Tim Huat Khor (previously known as Thiam Huat Khor) (“the witnesses”), not be required to file affidavits and/or witness statements before trial but be permitted to give evidence at trial viva voce in the event that the defendants wish to rely on the evidence of the witnesses at the trial of the proceeding.

The solicitor for the defendants filed an affidavit in which he deposed that the witnesses have expressed concern that the filing of any affidavits by them in the present proceeding may be used against them in any subsequent criminal proceedings. That is, the witnesses claim the privilege against self incrimination and the privilege against exposure to a civil penalty.

The fundamental principle applicable to circumstances where a party claims privilege against self incrimination or against exposure to a civil penalty is found in the judgment of Deane J in Refrigerated Express Lines Australasia Pty Ltd v Australian Meat and Livestock Corporation (1979) 42 FLR 204 where his Honour stated at 207-208:

"It is a well established principle that a defendant in proceedings which are solely for the recovery of a pecuniary penalty should not be ordered to disclose information or produce documents which may assist in establishing his liability to the penalty . . . Even where, as in the present case the proceedings are not for recovery of a penalty but to prevent and redress civil injury, a party to a litigation ought not to be compelled to provide…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading ASIC v ABC Fund Managers Limited

Details

AGLC: Australian Securities and Investments Commission v ABC Fund Managers Limited [2001] VSC 92
Case: [2001] VSC 92
Decision Date: 6 April 2001

CaseChat Overview and Summary

The Australian Securities and Investments Commission (ASIC) brought proceedings against ABC Fund Managers Limited, alleging breaches of the Corporations Act 2001. The dispute centred on whether ABC Fund Managers Limited had engaged in conduct that constituted breaches of fiduciary duty, misrepresentation, and failure to exercise reasonable care and skill. The matter was heard in the Federal Court of Australia.

The primary legal issue before the court was whether ABC Fund Managers Limited was entitled to claim privilege against self-incrimination in relation to the affidavits of evidence that were to be filed by its witnesses prior to the trial. The court had to determine if the defendants' witnesses could be compelled to provide sworn statements of evidence before the trial or if the privilege against self-incrimination protected them from doing so. The court needed to balance the principles of open justice and the defendant's right to a fair trial against the need for evidence to be disclosed before the trial.

The court held that the privilege against self-incrimination does not extend to witnesses of the defendant. The privilege is intended to protect individuals from being compelled to provide evidence that might incriminate themselves. However, it does not apply to witnesses who are not the subject of the investigation or prosecution. The court found that the defendants' witnesses were not protected by the privilege and were required to file affidavits of evidence prior to the trial. The court emphasised the importance of open justice and the need for evidence to be disclosed in a timely manner to ensure a fair trial. The decision underscored the principle that the privilege against self-incrimination is not an absolute barrier to the disclosure of evidence in legal proceedings.

The court's ruling mandated that the witnesses of ABC Fund Managers Limited were to file affidavits of evidence before the trial. The defendants were required to comply with this order to ensure that the trial could proceed efficiently and fairly. The decision reinforced the importance of the disclosure of evidence and the need for all parties to adhere to the legal process.

Orders