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ASIC v Rich

ASIC v Rich

Case [2003] NSWSC 328 17 April 2003

Discovery & Disclosure

Legal Privilege

Compensatory Damages

Civil Litigation & Procedure

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Reported Decision:
(2003) 45 ACSR 305
(2003) 21 ACLC 920

Supreme Court

CITATION: ASIC v Rich [2003] NSWSC 328

HEARING DATE(S): 28 March 2003

JUDGMENT DATE:
17 April 2003

JURISDICTION:
Equity

JUDGMENT OF: Austin J

DECISION: Plaintiff entitled to orders against first, third and fourth defendants for discovery, and directions that those defendants file and serve affidavits or witness statements before the hearing

CATCHWORDS: PRACTICE AND PROCEDURE - discovery - privilege against exposure to a penalty - plaintiff takes proceeding seeking declarations of contravention, disqualification orders and compensation orders under Corporations Act - whether defendants can rely on privilege to avoid giving discovery and filing witness statements before trial

LEGISLATION CITED: Corporations Act 2001 (Cth) ss 180, 206C, 206E, 920A, 1317E, 1317F, 1317G, 1317H, 1317J, 1317L, 1317N, 1317P, 1317Q, 1317R, 1399, 1400

CASES CITED: ASC v Donovan (1998) 28 ACSR 583
ASC v Forem-Freeway Enterprises (1999) 38 ACSR 339
ASC v Kippe (1996) 67 FCR 499
ASIC v ABC Fund Managers Ltd [2001] VSC 92
ASIC v Rich [2003] NSWSC 186
Australian Competition and Consumer Commission v Amcor Printing Papers Group Ltd (1999) 163 ALR 465
Australian Competition and Consumer Commission v FFE Building Services Ltd [ 2003] FCA 157
Australian Competition and Consumer Commission v J McPhee & Son (Australia) Pty Ltd (1997) 77 FCR 217
Australian Securities and Investments Commission v Plymin (2002) 4 VR 168
CAC (WA) v Ekamper (1987) 12 ACLR 519
Chew v NCSC (1985) 9 ACLR 527
Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 77 ALJR 40
Environmental Protection Authority v Caltex Refining Co Pty Ltd (1998) 178 CLR 477
Law Society of New South Wales v Foreman (1994) 34 NSWLR 408
NSW Bar Association v Evatt (1968) 117 CLR 177
Police Service Board v Morris (1984) 156 CLR 397
Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328
Re HIH Insurance Ltd; ASIC v Adler (2002) 42 ACSR 80
Re HIH Insurance Ltd; Australian Securities and Investments Commission v Adler (2001) 40 ACSR 214
Re Marsden (1981) 29 SASR 454
Re Tasmanian Spastics Association; ASC v Nandan (1997) 23 ACSR 743
Redfern v Redfern [1891] P 139
Refrigerated Express Lines (Australasia) Pty Ltd v Australian Meat and Livestock Corporation (1979) 42 FLR 204
Reid v Howard (1995) 184 CLR 1
Sidebottom v Commissioner of Taxation [2003] VSCA 2

PARTIES :
Australian Securities and Investments Commission (P/A)
John David Rich (D1/R1)
Bradley William Keeling (D2)
John Huyshe Greaves (D3/R3)
Mark Allen Silberman (D4/R4)

FILE NUMBER(S): SC 5934/01

COUNSEL: R MacFarlan QC with P Durack and N Beaumont (A)
B Walker SC with D Williams (R1/R2)
J West QC with M Jones (R3)

SOLICITORS: Jan Redfern, Solicitor for Australian Securities and Investments Commission (A)
Joanne Kelly, Solicitor (R1/R2)
Watson Mangioni (R3)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

AUSTIN J

THURSDAY 17 APRIL 2003

5934/01 AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION V JOHN DAVID RICH & ORS

JUDGMENT

1 HIS HONOUR: In this proceeding…

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 Rich

Details

AGLC: ASIC v Rich [2003] NSWSC 328
Case: [2003] NSWSC 328
Decision Date: 17 April 2003

CaseChat Overview and Summary

The Australian Securities and Investments Commission (ASIC) brought proceedings against Rich, alleging contraventions of the Corporations Act. The case was heard in the Federal Court, where the defendants sought to rely on a privilege against exposure to a penalty to avoid providing discovery and filing witness statements. The court was tasked with determining whether the defendants could invoke this privilege to prevent the disclosure of relevant documents and witness statements before the trial. The legal issue at the heart of the case was whether the defendants could claim privilege to withhold information that might be incriminating, and if such a privilege could be exercised in the context of a civil proceeding brought by ASIC.

The court considered the nature of the privilege in question, which is a common law privilege that prevents a person from being compelled to disclose information that might tend to incriminate them. The court examined whether this privilege applied in civil proceedings and whether it could be used to withhold information from ASIC, which was seeking declarations, disqualification orders, and compensation under the Corporations Act. The defendants argued that the privilege should protect them from being compelled to disclose potentially incriminating information, but ASIC contended that such a privilege was not available in civil proceedings and that it should not impede the disclosure process. The court ultimately held that the privilege against exposure to a penalty could not be invoked to withhold information in civil proceedings brought by ASIC. The court found that the privilege was not applicable in this context, and therefore the defendants were required to provide the necessary discovery and file their witness statements.

In conclusion, the court ruled that the defendants could not rely on the privilege against exposure to a penalty to avoid providing discovery and filing witness statements in the proceedings brought by ASIC. The court's decision emphasised that the privilege did not extend to civil proceedings where regulatory enforcement was concerned, and that it could not be used to hinder the disclosure process. The court's reasoning was grounded in the specific nature of the proceedings and the purpose of the privilege, which is to protect individuals from self-incrimination in criminal proceedings. The final orders of the court mandated that the defendants provide the required discovery and file their witness statements, ensuring that the proceedings could proceed without further impediment.

Orders