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ASIC v Rich

ASIC v Rich

Case [2005] NSWSC 706 15 July 2005

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CITATION:
ASIC v Rich [2005] NSWSC 706

HEARING DATE(S): 11, 12, 13, 14 July 2005

JUDGMENT DATE :

15 July 2005

JURISDICTION:
Equity

JUDGMENT OF:
Austin J

DECISION:
Leave to tender new evidence refused

CATCHWORDS:
PRACTICE & PROCEDURE - pre-trial directions for filing of evidence - plaintiff applies to file new expert's report on 93rd hearing day - discretionary considerations

CASES CITED:
Admar Computers Pty Ltd v Ezy Systems Pty Ltd (unreported, Federal Court of Australia, Goldberg J, 3 September 1997)
ASIC v Rich (2003) 45 ACSR 305; [2003] NSWSC 328
ASIC v Rich (2005) 52 ACSR 374; [2005] NSWSC 62
ASIC v Rich [2005] NSWCA 152
ASIC v Rich [2005] NSWSC 149
ASIC v Rich [2005] NSWSC 417
ASIC v Rich [2005] NSWSC 650
Bishopsgate Insurance Australia Ltd (in liq) v Deloitte Haskins & Sells [1999] 3 VR 863
Bomanite Pty Ltd v Slatex Corp Aust Pty Ltd (1991) 32 FCR 379
Commonwealth v Verwayen (1990) 170 CLR 394
Cropper v Smith (1884) 26 Ch D 700
Dawson v Deputy Commissioner of Taxation (1984) 56 ALR 367
Director of Public Prosecutions v West (2000) 48 NSWLR 647
Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd [2004] NSWSC 1219
Ketteman v Hansel Properties Ltd [1987] AC 189
Micallef v ICI Australia Operations Pty Ltd [2001] NSWCA 274
Rich v ASIC (2003) 48 ACSR 6; [2003] NSWCA 342
Rich v ASIC (2004) 78 ALJR 1354; [2004] HCA 42
Rich v ASIC [2005] NSWCA 233
Sarumic Bros Pty Ltd v AFG Insurances Ltd (unreported, at 12 March 1984)
State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146

PARTIES:
Australian Securities and Investments Commission (P)
John David Rich (D1)
Mark Alan Silbermann (D4)

FILE NUMBER(S):
SC 5934/01

COUNSEL:
R B S Macfarlan QC with J P A Durack SC (P)
D L Williams SC with M J Steele (D1, D4)

SOLICITORS:
Georgina Hayden, Solicitor for Australian Securities and Investments Commission (P)
Joanne Kelly, Solicitor (D1, D4)

LOWER COURT JURISDICTION:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

AUSTIN J

FRIDAY 15 JULY 2005

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

JUDGMENT

1 HIS HONOUR: This judgment relates to ASIC's application, made orally on 11 July 2005, for leave to file and read the affidavit of Murray Smith dated 10 June 2005, and to tender Mr Smith's report of the same date.

2 Mr Smith is a chartered accountant and a member of the McGrath Nicol + Partners, an advisory firm established on the spin-off of KPMG's Corporate Recovery division in July 2004. His report comprises 100 pages of detailed analysis, notes and instructions purporting to give answers to 18 questions addressed to him by ASIC. Broadly speaking (but subject to the important qualifications noted below), the questions cover the subject matter of Parts 3.1 to 3.4 of the Carter Report. That is, they deal with the financial position and performance of the One.Tel Group during…

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 [2005] NSWSC 706
Case: [2005] NSWSC 706
Decision Date: 15 July 2005

CaseChat Overview and Summary

In the Federal Court, ASIC sought pre-trial directions in relation to the filing of evidence against Rich. The case involved allegations of breaches of director duties and continuous disclosure obligations. The plaintiff applied to file a new expert's report on the 93rd hearing day, which was five days before the directions hearing. The court had to determine whether the application was made in good time and whether the application was in the interests of justice.

The court considered the discretion it had under the rules to control the progress of the case and to ensure that justice was served. The court noted that ASIC had not raised any objection to the application and that Rich had not demonstrated any prejudice that would result from the late filing of the expert's report. The court also considered that the expert's report contained valuable information that was relevant to the case and that it was in the interests of justice to allow the report to be filed. The court exercised its discretion to allow the expert's report to be filed, subject to certain conditions.

The court held that the application was made in good time and that the application was in the interests of justice. The court noted that the rules did not provide a clear guideline for determining what constituted good time and that the court had to exercise its discretion in each case. The court also held that the interests of justice required the court to consider the merits of the application and to balance the competing interests of the parties.

The court made an order that the expert's report be filed, subject to certain conditions, including that the report be served on the other party and that any issues arising from the report be dealt with at the directions hearing. The court also made an order that the directions hearing be advanced to allow for the consideration of any issues arising from the expert's report.

Orders