Australian Securities and Investments Commission v Marco

In the case of Australian Securities and Investments Commission v Marco, the Australian Securities and Investments Commission (ASIC) applied for ex parte freezing orders against Mr Chris Marco and AMS Holdings (WA) Pty Ltd, based on suspicions that the defendants had contravened several provisions of the Corporations Act 2001 and the Criminal Code Act (WA). The application was supported by an affidavit from an ASIC lawyer, which provided details of the investigation and the evidence gathered so far. ASIC believed that Mr Marco had raised approximately $123 million from investors under false pretenses and had no legitimate means of generating such returns. AMS Holdings, the trustee of AMS Holdings Trust, had received a significant net cash flow from Mr Marco and had used it to acquire a substantial real estate portfolio. The Federal Court granted the ex parte freezing orders to prevent the dissipation of the defendants' assets.

The legal issues before the court included whether the evidence provided by ASIC was sufficient to justify the granting of the freezing orders and whether variations to those orders should be permitted to allow certain payments to be made. ASIC argued that the evidence was sufficient to satisfy the court that the freezing orders were appropriate. However, Mr Marco's lawyers contended that the evidence was insufficient and that the orders should be varied to allow certain payments to be made, such as those related to the completion of building works at a property held by AMS Holdings. The court needed to consider the interests of all parties involved, including the investors who may have been defrauded, the defendants, and any other parties who might be affected by the orders.

The court found that the evidence provided by ASIC was sufficient to justify the granting of the initial freezing orders. However, it also found that variations to the orders could be appropriate if it could be demonstrated that such variations were in the overall financial interests of the aggrieved persons. In this case, the court accepted that it was in the interests of the investors for the building works to be completed, as the property's value would be enhanced for their benefit if ASIC ultimately succeeded in its claims. The court also considered the interests of the builder, who had a pre-existing contract with AMS Holdings and appeared to be innocently entitled to payment for the work performed. After reviewing additional evidence provided by Mr Marco, including a report from a Quantity Surveyor, the court was satisfied that the variation orders were appropriate and endorsed the proposed consent orders.

The final orders permitted Mr Marco to pay two specified invoices for the refurbishment of a property at 151 Scarborough Beach Road, Mount Hawthorn, in the total sum of $473,228.37 (inclusive of GST). This decision demonstrates the court's willingness to consider variations to freezing orders if it can be shown that such variations are in the best interests of the aggrieved parties and will not undermine the purpose of the original orders.