Australian Securities and Investments Commission v Banovec (No 2)

The Australian Securities and Investments Commission (ASIC) commenced proceedings against Mr Banovec, seeking an asset preservation order and an order prohibiting him from leaving Australia. The case was heard in the Supreme Court of New South Wales. The primary focus of the dispute was the jurisdiction of the court to make such orders under the Corporations Act 2001 (Cth) and the Supreme Court Act 1970 (NSW). The legal issues before the court were whether the court had the inherent jurisdiction or jurisdiction under section 23 of the Supreme Court Act 1970 (NSW) to make an asset preservation order when the power to appoint a receiver under section 1323(1)(h) of the Corporations Act 2001 (Cth) was engaged. Additionally, the court needed to determine the validity of orders prohibiting Mr Banovec from leaving Australia.

The court considered the jurisdictional basis for making asset preservation orders and concluded that the court indeed had the inherent jurisdiction, or jurisdiction under section 23 of the Supreme Court Act 1970 (NSW), to make such orders when the power to appoint a receiver under section 1323(1)(h) of the Corporations Act 2001 (Cth) was engaged. The court found that ASIC's power to make an asset preservation order was not limited to situations where it was seeking to appoint a receiver. The court also found that the orders prohibiting Mr Banovec from leaving Australia were valid, as they were necessary to prevent the dissipation of assets and to ensure the effectiveness of the asset preservation order. The court held that the orders were proportionate to the need to prevent the dissipation of assets and to ensure the effectiveness of the asset preservation order.

The court's reasoning and outcome in this case clarified the jurisdictional basis for making asset preservation orders and the validity of orders prohibiting a person from leaving Australia. The court's decision reinforced the importance of preventing the dissipation of assets during investigations and the effectiveness of such orders in ensuring that assets are preserved for potential creditors. The final orders of the court included the granting of the asset preservation order and the orders prohibiting Mr Banovec from leaving Australia.