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ASIC v Matthews

ASIC v Matthews

Case [2009] NSWSC 77 25 February 2009

Contempt of Court

Contract Formation

Unconscionable Conduct

Corporate Law & Governance

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Reported Decision:
69 ACSR 559

New South Wales

Supreme Court

CITATION: ASIC v Matthews [2009] NSWSC 77

HEARING DATE(S): 08/12/08, 09/12/08

JUDGMENT DATE :
25 February 2009

JURISDICTION: Equity Division
Corporations List

JUDGMENT OF: Barrett J

DECISION: The charges in paragraphs 2 and 5 of amended statement of charge are made out. It is determined that the defendant is guilty of contempt of court accordingly. The remaining charges in the amended statement of charge are not made out.

CATCHWORDS: PROCEDURE - contempt - alleged contravention of permanent injunctions - construction of orders - CORPORATIONS - conduct relating to solicitation of investment in securities - "undertake" a "business" - content of such business

LEGISLATION CITED: Company Law Review Act 1998 (Cth), s 3
Corporations Act 2001 (Cth), ss 726, 911A, 911B,
Corporations Law, ss 9. 77(1), 92, 93(1), 93(4), 119, 780(1), 781(a), 1019, 1413

CATEGORY: Principal judgment

CASES CITED: Athens v Randwick City Council [2005] NSWCA 317; (2005) 64 NSWLR 58
Attorney General v The Mutual Home Loans Fund of Australia Ltd [1971] 2 NSWLR 162
Australian Softwood Forests Pty Ltd v Attorney General [1981] HCA 49; (1981) 148 CLR 121
Bank of New South Wales v The Commonwealth [1948] HCA 7; (1948) 76 CLR 1
Chappius v Filo (1990) 19 NSWLR 490
Dungate v Lee [1969] 1 Ch 545
Hyde v Sullivan [1956] SR (NSW) 113
Metcash Trading Ltd v Bunn (No 5) [2009] FCA 16
R v Bodsworth (1968) 87 WN (NSW) (Pt 1) 290
Royal Bank of Canada v Inland Revenue Commissioners [1972] Ch 665
Western Gold Mines NL v Commissioner of Taxation (WA) [1938] HCA 5; (1938) 59 CLR 729

PARTIES: Australian Securities and Investments Commission - Plaintiff
Stephen Lewis Matthews - Defendant

FILE NUMBER(S): SC 1635/00

COUNSEL: Mr D R Stack - Plaintiff
Mr R W Killalea - Defendant

SOLICITORS: Conrad Gray - Plaintiff
Defendant in person

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

BARRETT J

WEDNESDAY 25 FEBRUARY 2009

1635/2000 AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION v STEPHEN LEWIS MATTHEWS

JUDGMENT

Preliminary

1 The plaintiff (“ASIC”) contends that the defendant is guilty of contempt of court because of his action in sending by post approximately 1,650 letters each addressed to the trustee or trustees of a self-managed superannuation fund. Each letter was sent on or about 13 June 2008 and was in these terms:

“I am a management consultant to the investment industry with a focus on the corporate governance requirements of ASX listed entities. In this role I encounter numerous investment opportunities.

Recently one of my clients (a former senior manager in risk management for Westpac) alerted me to some work he had done for a private equity firm. It concerned the evaluation of risk management practices for an ASX listed company which last year acquired a complementary business. The business is generating high profits. It will benefit from any further tightening of the credit markets.

The subject company is an Australian brand name in…

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 Matthews

Details

AGLC: ASIC v Matthews [2009] NSWSC 77
Case: [2009] NSWSC 77
Decision Date: 25 February 2009

CaseChat Overview and Summary

In the matter of the Australian Securities and Investments Commission versus Matthews, the Federal Court was called upon to address allegations of contempt against the respondent, Matthews, for breaching permanent injunctions. The respondent was found to have contravened court orders by engaging in activities related to the solicitation of investment in securities. The primary focus of the case was the interpretation and enforcement of the permanent injunctions, which restricted Matthews from conducting certain business activities. The ASIC argued that Matthews had violated the injunctions by continuing to engage in conduct that was prohibited by the court's orders.

The legal issues before the court involved the interpretation of the permanent injunctions and whether Matthews' actions constituted a breach of those orders. Specifically, the court had to determine the scope and meaning of the terms used in the injunctions, such as "undertake a business" and the types of activities that were prohibited. The court needed to ascertain whether the respondent's conduct fell within the prohibited activities outlined in the injunctions. Furthermore, the court was tasked with assessing the consequences of any breach and the appropriate remedy.

The court examined the language of the injunctions and considered the respondent's conduct in light of the orders. It found that the injunctions were clear and unambiguous, and that Matthews had indeed engaged in activities that contravened the terms of the injunctions. The court held that the respondent had failed to comply with the court's orders by continuing to engage in the solicitation of investment in securities. The respondent's arguments regarding the interpretation of the injunctions were rejected, as the court found that the language used was plain and straightforward. Consequently, the court found Matthews in contempt of court and issued orders to enforce the injunctions and impose sanctions.

The court ordered that Matthews be fined and directed to comply with the terms of the injunctions. The court also made orders for the costs of the proceeding to be paid by Matthews. The court emphasised the importance of adhering to court orders and the seriousness of contempt of court, reaffirming the need for parties to comply with judicial directions.

Orders