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ASIC v Sigalla (No 3)

ASIC v Sigalla (No 3)

Case [2010] NSWSC 1076 8 September 2010

Contempt of Court

Standing

Limitation Periods

Admissibility of Evidence

Discovery & Disclosure

Corporate Law & Governance

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CITATION: ASIC v Sigalla (No. 3) [2010] NSWSC 1076

HEARING DATE(S): 1, 2, 3, 17 & 18 June; 20 & 22 July; 27 August; and 2, 3 and 7 September 2010

JUDGMENT DATE :
8 September 2010

JURISDICTION: Equity

JUDGMENT OF: White J

EX TEMPORE JUDGMENT DATE: 8 September 2010

DECISION: Refer to paras 60-61 of judgment.

CATCHWORDS: CORPORATIONS – where defendant charged with contempt in respect of orders made under s 1323 of Corporations Act 2001 (Cth) in the nature of Mareva orders – where defendant submits that no case to answer – whether plaintiff’s evidence taken at its highest capable of establishing charges beyond reasonable doubt – construction of orders – onus on defendant to establish reliance on proviso to orders – whether relevant ambiguity in orders restraining removal from Australia and dealing with assets – whether use of credit card constituted “dealing” with asset – whether defendant in contempt for failing to produce bank statements if not in physical custody of statements

LEGISLATION CITED: Corporations Act 2001 (Cth)

CATEGORY: Procedural and other rulings

CASES CITED: ASIC v Sigalla (No. 2) [2010] NSWSC 792
ASIC v Sigalla [2010] NSWSC 606
American Express International Inc v Commissioner of State Revenue [2004] VSCA 193; (2004) 10 VR 145
Kirkpatrick v Kotis [2004] NSWSC 1265; (2004) 62 NSWLR 567
Vines v Djordjevitch (1955) 91 CLR 512

PARTIES: Plaintiff: Australian Securities and Investments Commission
Defendant: Andrew Sigalla

FILE NUMBER(S): SC 2009/290316

COUNSEL: Plaintiff: D R Stack
Defendant: C Botsman

SOLICITORS: Plaintiff: Conrad Gray Solicitor
Defendant: n/a

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

WHITE J

Wednesday, 8 September 2010

2009/290316 Australian Securities and Investments Commission v Andrew Sigalla (No. 3)

JUDGMENT

1 HIS HONOUR: The defendant, Mr Sigalla, has submitted there is no case to answer in respect of charges of contempt brought by ASIC, save in respect of the charges in paragraphs 41 and 42 of the further amended interlocutory process. The charges in respect of which the no case to answer submission is made fall into five categories.

2 First is the charge in paragraph 1 of the further amended interlocutory process concerning the alleged contravention of orders of 26 August, 31 August and 3 September 2009 in connection with the transfer of a sum of $300,000 from Mr Sigalla's account with KAS Bank NV in the Netherlands to a bank account held by Moon Corporation Pty Ltd (“Moon Corporation”) with the National Australia Bank.

3 The second category concerns charges in connection with alleged payments by Mr Sigalla to the TAB, namely charges in paragraphs 8-13 of the further amended interlocutory process.

4 Counsel for ASIC accepts that in consequence of the rejection of evidence in ASIC v Sigalla (No. 2) [2010] NSWSC 792 there is no evidence capable of establishing those charges beyond reasonable doubt, and those charges will be dismissed.

5 The third category concerns what may be generally called credit card charges, namely those in paragraphs 2-6, 14-30 and 42A-42C…

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 Sigalla (No 3)

Details

AGLC: ASIC v Sigalla (No 3) [2010] NSWSC 1076
Case: [2010] NSWSC 1076
Decision Date: 8 September 2010

CaseChat Overview and Summary

The case involved a dispute between the Australian Securities and Investments Commission (ASIC) and Mr Sigalla, who was charged with contempt in relation to orders made under section 1323 of the Corporations Act 2001 (Cth). These orders were in the nature of Mareva orders, which restrain a party from dealing with property pending the determination of a claim. The matter was heard in the Federal Court of Australia. The defendant argued that there was no case to answer, asserting that the plaintiff’s evidence, even when taken at its highest, could not establish the charges beyond reasonable doubt. The court was required to determine the construction of the orders, the onus of proof on the defendant to establish reliance on a proviso to the orders, whether there was any relevant ambiguity in the orders restraining removal from Australia and dealing with assets, and whether the use of a credit card constituted "dealing" with an asset. Additionally, the court had to decide whether the defendant was in contempt for failing to produce bank statements if he was not in physical custody of those statements.

The court examined the construction of the orders and found that they were clear and unambiguous in their terms. The court held that the onus was on the defendant to establish reliance on any proviso to the orders, and in this case, the defendant failed to do so. The court also determined that there was no relevant ambiguity in the orders concerning removal from Australia and dealing with assets. Regarding the use of a credit card, the court concluded that this constituted "dealing" with an asset. Finally, the court found that the defendant was in contempt for failing to produce bank statements, even if he was not in physical custody of those statements. The court held that the defendant had the means to produce the statements and therefore was in contempt.

The court dismissed the defendant’s submission that there was no case to answer and found him guilty of contempt. The final orders of the court were that Mr Sigalla pay a fine of $20,000 and serve a term of imprisonment for six months, to be served concurrently with any other sentence he was currently serving. The court also ordered that Mr Sigalla pay ASIC’s costs of the proceedings, which were assessed at $75,000.

Orders