Australian Securities and Investments Commission v Rich

The respondents, who were directors of a company, were charged with breaches of the Corporations Act. They were alleged to have contravened continuous disclosure obligations by failing to disclose certain matters to the company’s shareholders. The Australian Securities and Investments Commission brought the case to the Federal Court of Australia, which was presided over by Finkelstein J. The respondents applied for the expert opinion evidence of a director to be admitted, and for leave to subpoena the company’s records.

The primary legal issue was whether the expert evidence was admissible under section 79 of the Evidence Act 1995 (Cth), and whether it should be rejected on discretionary grounds under section 135. Finkelstein J considered that the expert’s evidence on the responsibilities of the chairman, managing director and finance director of a company was relevant to the issues in the case. However, the expert’s evidence on the financial performance of new business was not relevant, because the expert did not have the necessary experience in such a business. The expert’s evidence was not so exceptional that it could not be adduced by the respondents through other means, and Finkelstein J was not satisfied that the expert’s evidence was necessary to achieve substantial justice between the parties. The judge therefore rejected the expert’s evidence on the new business. The respondents were also denied leave to subpoena the company’s records.

Finkelstein J held that the expert’s evidence on the responsibilities of the directors was admissible, and that the evidence on the new business should be rejected on discretionary grounds. The respondents’ application to subpoena the company’s records was also denied. The case demonstrates the importance of ensuring that expert evidence is relevant and necessary, and that it is not rejected on discretionary grounds. The case also highlights the importance of ensuring that expert evidence is based on sufficient experience in the relevant field.