Australian Securities and Investments Commission v DOD Bookkeeping Pty Ltd (in liq), in the matter of DOD Bookkeeping Pty Ltd (in liq) (No 2)

In the Federal Court of Australia, the Australian Securities and Investments Commission (ASIC) sued DOD Bookkeeping Pty Ltd, which was in liquidation, for breaches of the Corporations Act 2001 (Cth). ASIC alleged that DOD contravened sections 961K(2), 963E(2), and 963J by providing conflicted remuneration to its representatives, specifically in the form of bonus payments. The court had to decide on the appropriateness of ASIC's request to amend the judgment, the correctness of the declarations of contravention, and the penalties to be imposed.

The court held that ASIC's requests to amend the judgment were not permissible under Rule 39.05 of the Federal Court Rules 2011 as they were not clerical mistakes or accidental omissions, but deliberate decisions. The court found that the contraventions of sections 961K(2), 963E(2), and 963J were deliberate, given the systematic nature of the bonuses paid following property purchases recommended by the representatives. The court concluded that the bonuses were conflicted remuneration and that the representatives, as DOD's agents, accepted these bonuses. The court determined that the bonuses could reasonably influence the financial advice given, thereby contravening the best interests obligations.

The court ordered declarations of contravention for all the alleged breaches and imposed pecuniary penalties for each contravention. The penalties varied based on the nature and number of contraventions, with the maximum penalty for a body corporate set at $1 million. The court also dismissed ASIC's interlocutory application and ordered DOD to pay ASIC's costs, except for those associated with the interlocutory application.