Australian Securities and Investments Commission v Macrolend Pty Ltd

The Australian Securities and Investments Commission (ASIC) brought an application against Macrolend Pty Ltd and others for an interlocutory order to strike out their defences pursuant to certain rules of the Federal Court. ASIC's application was based on the assertion that the defendants' defences were deficient and did not give fair notice of their defences, as required by statute. The defendants, however, argued that they were entitled to claim privilege against self-exposure to penalty, which would allow them to resist the application. This privilege, if applicable, would protect them from having to disclose information that could potentially lead to penalties.

The court had to determine whether the defendants' entitlement to claim penalty privilege could be used to resist ASIC's application to strike out the defences. Additionally, the court had to decide whether the defendants were indeed entitled to claim this privilege and whether the injunctive relief sought by ASIC was properly characterised as penal. The court also considered whether the terms of the injunctive relief were drafted in a manner that could be seen as superfluous to disguise any penal effect.

The court found that the defendants' evidence was insufficient to establish that it was impossible or impracticable for information relevant to the defences to be provided by persons other than Mr. Hodgson, the sole director and shareholder of Macrolend. The court concluded that the defences were deficient and did not meet the statutory requirements for providing fair notice and assisting in identifying the real issues in dispute. Consequently, the court granted ASIC's application to strike out the defences, allowed the defendants leave to file amended defences by a specified date, and ordered the defendants to pay ASIC's costs of the application.

The court's decision hinged on the insufficiency of the defendants' evidence to establish the impossibility or impracticability of obtaining necessary information from other sources. The court held that the privilege against self-exposure to penalty did not apply in these circumstances, and therefore, the defendants could not resist the application on that basis. The relief sought by ASIC was not characterised as penal, and the terms of the injunctive relief were not superfluously drafted. The court's final orders included striking out the existing defences, granting leave to file amended defences, and ordering the defendants to pay ASIC's costs.