Australian Securities and Investments Commission v Cassimatis (No 5)

The case of Australian Securities and Investments Commission v Cassimatis (No 5) involved a legal dispute where the Australian Securities and Investments Commission (ASIC) sought to present evidence of subsequent losses suffered by various investors as part of their case against the respondents, the Cassimatises. The primary issue before the court was whether the evidence of losses that occurred after the provision of financial advice could be admitted to prove the reasonableness of the advice given at an earlier time. This involved a consideration of the relevance of subsequent events under the Evidence Act 1995 (Cth) and whether such evidence could rationally affect the probability of the existence of facts in issue.

The court had to determine whether evidence of subsequent losses could be admitted as relevant to the assessment of the reasonableness of advice given at an earlier time. The Cassimatises argued that such evidence was irrelevant or of peripheral relevance, and should be excluded under sections 135(a) or (c) of the Evidence Act. They contended that subsequent events could not establish the reasonableness of advice given prior to those events. However, the court found that the evidence of losses could rationally affect the assessment of the probability of the existence of facts in issue, particularly concerning the capacity of the investors to meet financial obligations and the risks associated with the investments recommended. The court concluded that the evidence of loss was relevant and admissible, as it could logically inform the assessment of whether the advice given was reasonable.

The court's reasoning was grounded in the broad test of relevance under the Evidence Act, which allows for evidence that could rationally affect the assessment of the probability of facts in issue. The court found that the subsequent losses were pertinent in evaluating the reasonableness of the advice given, particularly in relation to the financial capacity of the investors and the risks involved. Consequently, the application by the Cassimatises to exclude the evidence of losses was dismissed.

The final order of the court was that evidence of losses suffered by the Part E Investors is admissible in the proceedings against the Cassimatises. This decision allows ASIC to present this evidence as part of their case to demonstrate the reasonableness or lack thereof of the advice provided by Storm to the investors.