Australian Securities and Investment Commission v Macks (No 2)

The case of Australian Securities and Investment Commission v Macks (No 2) involved a dispute between the Australian Securities and Investment Commission (ASIC) and Mr Macks, the liquidator of Bernsteen and Newmore, two companies in financial difficulty. ASIC brought proceedings against Mr Macks alleging misconduct in his role as liquidator, specifically in advising the companies to liquidate and in selling the companies’ assets at an undervalue. Mr Macks argued that the proceedings should be stayed as they were an abuse of process due to the existence of prior proceedings and investigations. The court had to decide whether to grant ASIC permission to amend its originating process to include allegations of misconduct by Mr Macks and whether to stay the proceedings.

The court examined the legal issues of whether ASIC could amend its originating process and if the proceedings should be stayed. The court considered whether ASIC had provided sufficient evidence to support the amendments and if there had been undue delay in seeking to amend the proceedings. The court also considered the principle that findings from prior proceedings and investigations should not be admissible in the current proceedings. The court concluded that ASIC had not provided sufficient evidence to support the amendments and that there had been undue delay in seeking to amend the proceedings. However, the court found that the proceedings should not be stayed as there was no abuse of process.

The court allowed ASIC to amend its originating process to include allegations of misconduct by Mr Macks and ordered that there be an inquiry by the court into the aspects of Mr Macks’ conduct identified in the amended originating process. The court also ordered that ASIC file a pleading setting out the material facts upon which it relied in support of its allegations. The court dismissed Mr Macks’ application for a permanent stay of the proceedings. The court will hear from the parties further as to the precise terms of the orders to be made, including further procedural orders that might be made, and on the issue of costs.