Australian Securities and Investments Commission v Sigalla (No 2)

[2010] NSWSC 792

Reported Decision: 240 FLR 327
79 ACSR 198

New South Wales

Supreme Court

CITATION:	ASIC v Sigalla (No. 2) [2010] NSWSC 792
HEARING DATE(S):	17 and 18 June 2010
JUDGMENT DATE :	15 July 2010
JURISDICTION:	Equity
JUDGMENT OF:	White J
DECISION:	Refer to para 145 of judgment.
CATCHWORDS:	EVIDENCE – voir dire – where plaintiff brought charges of contempt against defendant in respect of orders made under Corporations Act 2001 (Cth), s 1323 restraining the defendant from dealing with his assets – admissibility of evidence objected to under Evidence Act 1995, s 138 – where evidence obtained pursuant to notices issued by plaintiff purportedly under Australian Securities and Investments Commission Act 2001 (Cth), ss 19(2), 30, 33 or 37(9) – whether evidence improperly obtained pursuant to invalid notices – whether plaintiff had power to issue the notices to investigate contempt charges – whether plaintiff lawfully exercised its power to issue notices – scope of ASIC’s investigative powers – whether notice issued under s 19 invalid for failing to set out effect of s 68 – legislative requirements as to the form of notices under ss 30 and 33 – whether non-compliance with legislative requirements renders notices invalid – purpose of requiring notices to state the matter to which the request for production of documents relates – whether notices valid where issued for stated purpose even if also issued for unstated purpose – whether notices valid where did not truly state the matters to which the request for production of documents related – weighing up of desirability of admitting evidence against undesirability of admitting evidence obtained pursuant to invalid notices
LEGISLATION CITED:	Evidence Act 1995 (NSW) Corporations Act 2001 (Cth) Australian Securities and Investments Commission Act 2001 (Cth) Supreme Court Act 1970 (NSW) Acts Interpretation Act 1901 (Cth) Legislative Instruments Act 2003 (Cth) Income Tax Assessment Act 1936 (Cth) Crimes Act 1900 (NSW) Australian Human Rights Commission Act 1986 (Cth)
CATEGORY:	Procedural and other rulings
CASES CITED:	ASIC v Sigalla [2010] NSWSC 606 NSW Food Authority v Nutricia Australia Pty Limited [2008] NSWCCA 252; (2008) 72 NSWLR 456 Director of Public Prosecutions v Australian Broadcasting Corporation (1987) 7 NSWLR 588 Johns v Australian Securities Commission (1992) 178 CLR 408 Williams v Keelty (2001) 111 FCR 175 Johns v Connor (1992) 35 FCR 1 Johns v Australian Securities Commission (1992) 35 FCR 146 Boys v Australian Securities Commission (1998) 80 FCR 403 Commissioner of Taxation of the Commonwealth of Australia v Australia and New Zealand Banking Group Limited (1979) 143 CLR 499 MacDonald v Australian Securities Commission (1993) 43 FCR 466 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 Clifford Corporation Ltd v ASIC (1998) 30 ACSR 130 Australian Securities Commission v Graco (1991) 29 FCR 491 Parker v Comptroller-General of Customs [2007] NSWCA 348 Parker v Comptroller-General of Customs [2009] HCA 7; (2009) 83 ALJR 494 Bunning v Cross (1978) 141 CLR 54
PARTIES:	Plaintiff: Australian Securities and Investments Commission Defendant: Andrew Sigalla
FILE NUMBER(S):	SC 2009/290316
COUNSEL:	Plaintiff: D R Stack Defendant: R J Bromwich SC with C A Botsman
SOLICITORS:	Plaintiff: ASIC Defendant: Bridges Lawyers

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

WHITE J

Thursday, 15 July 2010

2009/290316 Australian Securities and Investments Commission v Andrew Sigalla (No. 2)

JUDGMENT

1 HIS HONOUR: This judgment concerns the admissibility of evidence objected to under s 138 of the Evidence Act 1995 (NSW).

2 I am hearing a Further Amended Interlocutory Process filed by the Australian Securities and Investments Commission (“ASIC”) against Mr Andrew Sigalla by which ASIC charges Mr Sigalla with contempt for having allegedly contravened orders made by Bergin CJ in Eq on 26 August 2009, by Barrett J on 31 August 2009 and 3 September 2009, by me on 16 September 2009 (as such orders as were varied on 2, 9, 10, 13, 16 and 27 November 2009), and by Austin J on 30 November 2009 as varied on 16 December 2009. Originally there were 45 charges. ASIC has stated that it is not proceeding with two. The orders were made pursuant to s 1323 of the Corporations Act 2001 (Cth) and restrained certain dealings by Mr Sigalla with his assets. In the description of the charges which follows I have adopted the numbering in the Further Amended Interlocutory Process rather than the Further Amended Statement of Charge.

3 The first charge is that Mr Sigalla made a request for a sum of $300,000 to be transferred from his bank account with KAS Bank to a bank account held by Moon Corporation Pty Ltd with the National Australia Bank and subsequently took no steps to prevent the transfer occurring.

4 Charges 2-6 allege that Mr Sigalla breached orders of Barrett J by making five payments (four of $1,680 and one of $3,380) to Premier Models Sydney NSW for the provision of what are euphemistically called female models or escorts. Charge 7 has not been pressed.

5 Charges 8-13 allege that the first defendant breached orders of the court by making a payment of $3,000 to the TAB on or about 12 September 2009, and then used funds credited to his TAB account to place bets with the TAB in sums ranging between $250 and $1,000.

6 Charges 14-26 allege that Mr Sigalla breached the orders by using his credit cards to pay sums ranging from $660 to $3,850 to TLC Design Pty Ltd for the provision of female models or escorts. Thirteen such payments are alleged to have been made between 20 and 21 October 2009, 6 and 7 November 2009, 24 and 25 November 2009 and 7 January 2010.

7 Charges 27-30 allege that Mr Sigalla committed contempt of court by using his credit card to pay four sums of $660 to Luna Sydney Pty Ltd on or about 15 November 2009 for the provision of female models or escorts.

8 Charge 31 alleges that Mr Sigalla was guilty of contempt by, on 9 September 2009, causing a sum of $52,500 to be paid from his bank account with St George Bank to his bank account in the United States for the purpose of paying his children’s school fees in circumstances where he was allegedly aware that the fees had already been paid. I understand ASIC intends to allege that this was the stated, but not the true purpose, of the payment. Charge 32 has not been pressed.

9 Charges 33-42 are not relevant to the present issues concerning the admissibility of evidence.

10 Charges 42A to 42C allege that Mr Sigalla breached orders by making three payments on or about 4, 5 and 6 October 2009 of sums of $2,415 and $420 to Six Star International for the provision of female models or escorts.

11 I refused Mr Sigalla’s application to dismiss summarily the charges that he breached orders of the court by making payments by credit card (ASIC v Sigalla [2010] NSWSC 606).

12 The issue of admissibility of evidence can be understood from the first affidavit objected to. ASIC read an affidavit of Mr Glen Cameron sworn 14 December 2009. Mr Cameron is an employee of American Express Australia Limited. He deposed having been served by ASIC with a notice under s 33 of the Australian Securities and Investments Commission Act 2001 (Cth) (“ASIC Act”). He produced a copy of Mr Sigalla’s credit card statement for his American Express account for the period 18 August 2009 to 13 September 2009. The notice issued to American Express Australia Limited was dated 26 October 2009. It was issued by Mr Conor Brennan, a senior financial investigator employed by ASIC. The notice stated:

“ In relation to suspected contraventions by Andrew John Sigalla (‘ Sigalla ’), John Falconer (‘ Falconer ’) and Michael Otten (‘ Otten ’), now former directors of TZ Limited (ACN 073 979 272) (‘ TZ Limited ’) of
(a) Sections 182, 184, 590 and 596 of the Corporations Act 2001 (Cth); and/or
(b) Sections 173, 176A, 178BA and 178BB of the Crimes Act 1909 (NSW)
in the period 1 April 2004 to 18 June 2009 (‘ the relevant period ’) concerning the affairs of TZ Limited, in particular the conduct of Sigalla, Falconer and Otten as directors at times during the relevant period. You are hereby notified that, under section 33 of the Australian Securities and Investments Commission Act 2001, you are required to produce
to: Conor Brennan
at: Level 18, 1 Martin Place, Sydney NSW 2000
on: 27 October 2009
at: 11 am
the following books;
The American express [sic] statement of account [xxxx-yyyy-xxxx-yyy] for the period 13 September 2009 to current date. ”

13 The affidavit is relevant only insofar as Mr Cameron annexed the copies of Mr Sigalla’s statement of account with American Express. Counsel for Mr Sigalla objected to the affidavit on the ground that the evidence was improperly obtained and should be excluded pursuant to s 138 of the Evidence Act. Counsel submitted that although the notice stated that the documents were sought in connection with the investigation into suspected contraventions of former directors of TZ Limited during the period 1 April 2004 to 18 June 2009, in fact the documents could not have been sought for that purpose. The documents sought could only have come into existence after 13 September 2009 and it would be fanciful to think (so it was submitted) that statements of Mr Sigalla’s American Express account for periods after 13 September 2009 could be relevant to an investigation into his, or other former directors’, conduct as directors of TZ Limited up to 18 June 2009. Rather, so it was said, the documents were sought with a view to investigating or prosecuting charges of contempt. Not only was that not the purpose stated in the notice, but, so it was submitted, that was not a purpose for which ASIC could exercise its statutory power to compel the production of documents. Hence counsel for Mr Sigalla submitted that the evidence was obtained improperly and should be excluded pursuant to s 138 of the Evidence Act.

14 The same submission was made in respect of numerous affidavits read by ASIC. In each case documents were produced by third parties following service of a notice purportedly given in the exercise of a statutory power under the ASIC Act. Counsel for Mr Sigalla contended that ASIC had no power to issue the notice, that if it had power it did not lawfully exercise the power because the notices did not truly state the investigation for which they were issued, that the notices were invalid, and that the evidence was improperly obtained. Counsel challenged the validity of 38 notices issued by ASIC under ss 19(2), 30, 33 or 37(9) of the ASIC Act. The notices were issued between 1 September 2009 and 12 February 2010. Mr Sigalla contends that evidence obtained through the use of those notices should be rejected under s 138.

15 Section 138 of the Evidence Act provides:

“ 138 Exclusion of improperly or illegally obtained evidence

(1) Evidence that was obtained:
(a) improperly or in contravention of an Australian law, or
(b) in consequence of an impropriety or of a contravention of an Australian law,
is not to be admitted unless the desirability of admitting the evidence outweighs the undesirability of admitting evidence that has been obtained in the way in which the evidence was obtained.
(2) Without limiting subsection (1), evidence of an admission that was made during or in consequence of questioning, and evidence obtained in consequence of the admission, is taken to have been obtained improperly if the person conducting the questioning:
(a) did, or omitted to do, an act in the course of the questioning even though he or she knew or ought reasonably to have known that the act or omission was likely to impair substantially the ability of the person being questioned to respond rationally to the questioning, or
(b) made a false statement in the course of the questioning even though he or she knew or ought reasonably to have known that the statement was false and that making the false statement was likely to cause the person who was being questioned to make an admission.
(3) Without limiting the matters that the court may take into account under subsection (1), it is to take into account:
(a) the probative value of the evidence, and
(b) the importance of the evidence in the proceeding, and
(c) the nature of the relevant offence, cause of action or defence and the nature of the subject-matter of the proceeding, and
(d) the gravity of the impropriety or contravention, and
(e) whether the impropriety or contravention was deliberate or reckless, and
(f) whether the impropriety or contravention was contrary to or inconsistent with a right of a person recognised by the International Covenant on Civil and Political Rights, and
(g) whether any other proceeding (whether or not in a court) has been or is likely to be taken in relation to the impropriety or contravention, and
(h) the difficulty (if any) of obtaining the evidence without impropriety or contravention of an Australian law.
Note. The International Covenant on Civil and Political Rights is set out in Schedule 2 to the Human Rights and Equal Opportunity Commission Act 1986 of the Commonwealth [sic] . ”

16 Initially, counsel for Mr Sigalla did not submit that ASIC had obtained evidence in contravention of an Australian law. They submitted that the notices were issued for a purpose foreign to the power ASIC has under Part 3 of the ASIC Act. Counsel submitted that evidence obtained through the issue of such notices was obtained improperly or in consequence of an impropriety within the meaning of s 138(1). As the argument developed counsel also submitted that if ASIC had power to issue notices to obtain evidence for the purpose of investigating or prosecuting charges of contempt, at least some of the notices were invalid because the true purpose was not stated. The notice of 26 October 2009 to American Express referred to above is an example.

17 Initially, counsel for Mr Sigalla submitted that ASIC had committed a contempt of court by using the procedures for compulsory production of documents or provision of information under the ASIC Act to obtain a procedural advantage which could not be obtained under the procedural rules of the court. That contention was not pressed in final submissions. There was no evidence that the officers of ASIC who issued notices did so for the sole or dominant purpose of obtaining evidence that could not be obtained under the court’s procedures (NSW Food Authority v Nutricia Australia Pty Limited [2008] NSWCCA 252; (2008) 72 NSWLR 456 at [15], [158], [190]-[197]).

The Legislation

18 Sections 1(2)(d) and (g) and (3) of the ASIC Act provides:

“ 1 Objects
...
(2) In performing its functions and exercising its powers, ASIC must strive to:
...
(d) administer the laws that confer functions and powers on it effectively and with a minimum of procedural requirements; and
...
(g) take whatever action it can take, and is necessary, in order to enforce and give effect to the laws of the Commonwealth that confer functions and powers on it.
(3) This Act has effect, and is to be interpreted, accordingly. ”

19 Part 3 of the ASIC Act is headed “Investigation and information – gathering”. Subsection 13(1) provides:

“ 13 General powers of investigation
(1) ASIC may make such investigation as it thinks expedient for the due administration of the corporations legislation (other than the excluded provisions) where it has reason to suspect that there may have been committed:
(a) a contravention of the corporations legislation (other than the excluded provisions); or
(b) a contravention of a law of the Commonwealth, or of a State or Territory in this jurisdiction, being a contravention that:
(i) concerns the management or affairs of a body corporate or managed investment scheme; or
(ii) involves fraud or dishonesty and relates to a body corporate or managed investment scheme or to financial products. ”

20 The “corporations legislation” means the ASIC Act and the Corporations Act (no excluded provision is relevant). Thus, on the face of the section, where ASIC has reason to suspect a contravention of the Corporations Act or the ASIC Act, or another law of the Commonwealth or of a State or Territory, being a suspected contravention falling within s 13(1)(b)(i) or (ii), ASIC is empowered to make such investigation as it sees fit for the due administration of the Corporations Act or the ASIC Act. Paragraphs (a) and (b) of s 13(1) specify the necessary criteria for the exercise of the investigative power. But once the power to investigate is enlivened, the power is not confined to investigating the suspected contraventions. Whether this prima facie reading of the section is correct is addressed below.

21 Section 19 of the ASIC Act provides:

“ 19 Notice requiring appearance for examination
(1) This section applies where ASIC, on reasonable grounds, suspects or believes that a person can give information relevant to a matter that it is investigating, or is to investigate, under Division 1.
(2) ASIC may, by written notice in the prescribed form given to the person, require the person:
(a) to give to ASIC all reasonable assistance in connection with the investigation; and
(b) to appear before a specified member or staff member for examination on oath and to answer questions.
Note: Failure to comply with a requirement made under this subsection is an offence (see section 63).
(3) A notice given under subsection (2) must:
(a) state the general nature of the matter referred to in subsection (1); and
(b) set out the effect of subsection 23(1) and section 68. ”

22 Subsection 23(1) and s 68 provide:

“ 23 Examinee’s lawyer may attend
(1) The examinee’s lawyer may be present at the examination and may, at such times during it as the inspector determines:
(a) address the inspector; and
(b) examine the examinee;
about matters about which the inspector has examined the examinee.
...
68 Self incrimination
(1) For the purposes of this Part, of Division 3 of Part 10, and of Division 2 of Part 11, it is not a reasonable excuse for a person to refuse or fail:
(a) to give information; or
(b) to sign a record; or
(c) to produce a book;
in accordance with a requirement made of the person, that the information, signing the record or production of the book, as the case may be, might tend to incriminate the person or make the person liable to a penalty.
(2) Subsection (3) applies where:
(a) before:
(i) making an oral statement giving information; or
(ii) signing a record;
pursuant to a requirement made under this Part, Division 3 of Part 10 or Division 2 of Part 11, a person (other than a body corporate) claims that the statement, or signing the record, as the case may be, might tend to incriminate the person or make the person liable to a penalty; and
(b) the statement, or signing the record, as the case may be, might in fact tend to incriminate the person or make the person so liable.
(3) The statement, or the fact that the person has signed the record, as the case may be, is not admissible in evidence against the person in:
(a) a criminal proceeding; or
(b) a proceeding for the imposition of a penalty;
other than a proceeding in respect of:
(c) in the case of the making of a statement—the falsity of the statement; or
(d) in the case of the signing of a record—the falsity of any statement contained in the record. ”

23 Division 3 of Part 3 concerns the power to require production of books and related provisions. Sections 28, 30, 33(1) and 37 provide:

“ 28 When certain powers may be exercised
A power conferred by this Division (other than sections 29, 30A, 35, 36 and 39A) may only be exercised:
(a) for the purposes of the performance or exercise of any of ASIC’s functions and powers under the corporations legislation; or
(b) for the purposes of ensuring compliance with the corporations legislation; or
(c) in relation to:
(i) an alleged or suspected contravention of the corporations legislation; or
(ii) an alleged or suspected contravention of a law of the Commonwealth, or of a State or Territory in this jurisdiction, being a contravention that concerns the management or affairs of a body corporate, or involves fraud or dishonesty and relates to a body corporate or financial products; or
(d) for the purposes of an investigation under Division 1.
...
30 Notice to produce books about affairs of body corporate or registered scheme
(1) ASIC may give to:
(a) a body corporate that is not an exempt public authority; or
(b) an eligible person in relation to such a body corporate;
a written notice requiring the production to a specified member or staff member, at a specified place and time, of specified books relating to affairs of the body.
Note: Failure to comply with a requirement made under this subsection is an offence (see section 63).
(2) ASIC may give to:
(a) the responsible entity of a registered scheme; or
(b) an eligible person in relation to the responsible entity;
a written notice requiring the production to a specified member or staff member, at a specified place and time, of specified books relating to the operation of the scheme.
Note: Failure to comply with a requirement made under this subsection is an offence (see section 63).
...
33 Notice to produce documents in person’s possession
(1) ASIC may give to a person a written notice requiring the production to a specified member or staff member, at a specified place and time, of specified books that are in the first mentioned person’s possession and relate to:
(a) affairs of a body corporate; or
(ab) affairs of a registered scheme; or
(b) a matter referred to in any of paragraphs 31(1)(g) to (m), inclusive; or
(c) a matter referred to in paragraph 32A(c) or (d).
Note: Failure to comply with a requirement made under this section is an offence (see section 63).
...
37 Powers where books produced or seized
(1) This section applies where:
(a) books are produced to a person under a requirement made under this Division; or
(b) under a warrant issued under section 36, a person:
(i) takes possession of books; or
(ii) secures books against interference; or
(c) by virtue of a previous application of subsection (8) of this section, books are delivered into a person’s possession.
(2) If paragraph (1)(a) applies, the person may take possession of any of the books.
(3) The person may inspect, and may make copies of, or take extracts from, any of the books.
(4) The person may use, or permit the use of, any of the books for the purposes of a proceeding.
(5) The person may retain possession of any of the books for so long as is necessary:
(a) for the purposes of exercising a power conferred by this section (other than this subsection and subsection (7)); or
(b) for any of the purposes referred to in paragraphs 28(a), (b) and (d) or 30A(2)(a), (b) and (d), as the case requires; or
(c) except in the case of books required to be produced for a purpose specified in subparagraph 30A(2)(a)(ii) or 30A(2)(b)(ii)—for a decision to be made about whether or not a proceeding to which the books concerned would be relevant should be begun; or
(d) for such a proceeding to be begun and carried on.
(6) No one is entitled, as against the person, to claim a lien on any of the books, but such a lien is not otherwise prejudiced.
(7) While the books are in the person’s possession, the person:
(a) must permit another person to inspect at all reasonable times such (if any) of the books as the other person would be entitled to inspect if they were not in the first mentioned person’s possession; and
(b) may permit another person to inspect any of the books.
(8) Unless subparagraph (1)(b)(ii) applies, the person may deliver any of the books into the possession of ASIC or of a person authorised by it to receive them.
(9) If paragraph (1)(a) or (b) applies, the person, or a person into whose possession the person delivers any of the books under subsection (8), may require:
(a) if paragraph (1)(a) applies—a person who so produced any of the books; or
(b) in any case—a person who was a party to the compilation of any of the books;
to explain any matter about the compilation of any of the books or to which any of the books relate.
Note: Failure to comply with a requirement made under this subsection is an offence (see section 63).

(10) In this section:
proceeding includes:
(a) in relation to a contravention of Division 2 of Part 2—a proceeding under a law of the Commonwealth, a State or a Territory; and
(b) otherwise—a proceeding under a law of the Commonwealth, or of a State or Territory in this jurisdiction. ”

24 In the present case ASIC purportedly exercised powers conferred by ss 30, 33 and 37(9). No argument was raised that the notices issued to bodies corporate under ss 30 and 33 did not relate to the affairs of those bodies. The powers under ss 30, 33 and 37(9) can be exercised only for a purpose described in s 28. Such purposes extend to the carrying out of an investigation authorised by s 13 (s 28(a) and (d)). Such powers may also be exercised for the purpose of ensuring compliance with the corporations legislation (s 28(b)).

ASIC was entitled to issue notices under Part 3 of the ASIC Act to investigate charges of contempt

25 The orders Mr Sigalla is alleged to have breached were made on the application of ASIC pursuant to s 1323 of the Corporations Act. Section 1323(9) provides that a person must not contravene an order of the court made under the section that is applicable to that person. Such a contravention is an offence of strict liability (ss 1311 and 1323(10)).

26 Counsel for Mr Sigalla accepted that ASIC could exercise its powers under Division 3 of Part 3 of the ASIC Act for the purpose of investigating a suspected contravention of s 1323 for the purposes of considering whether proceedings for an offence should be instituted for that contravention. The present proceedings for contempt are not of that character. Counsel for Mr Sigalla correctly submitted that the law of contempt is state law and not federal law (Director of Public Prosecutions v Australian Broadcasting Corporation (1987) 7 NSWLR 588 at 593, 595). Whilst it was accepted that ASIC has power to commence proceedings for contempt (such a power being necessarily incidental to the power to bring proceedings pursuant to s 1323 of the Corporations Act), counsel for Mr Sigalla submitted that nothing in Part 3 of the ASIC Act authorises ASIC to use the powers contained therein to gather evidence for the purposes of investigating or prosecuting proceedings for contempt.

27 Counsel also submitted that if ASIC had power to issue the notices for, for example, a suspected contravention of s 1323 which might be punishable by criminal proceedings pursuant to s 1311 of the Corporations Act, such powers could only be exercised for that purpose and it would be an abuse of power to use information or documents for a different purpose, namely the investigation and prosecution of charges of contempt for which ASIC had no direct power to compel the production of documents or provision of information. Counsel referred to Johns v Australian Securities Commission (1992) 178 CLR 408 at 423 where Brennan J said:

“ But when a power to require disclosure of information is conferred for a particular purpose, the extent of dissemination or use of the information disclosed must itself be limited by the purpose for which the power was conferred. In other words, the purpose for which a power to require disclosure of information is conferred limits the purpose for which the information disclosed can lawfully be disseminated or used. In Marcel v Commissioner of Police Sir Nicolas Browne-Wilkinson V-C said, in reference to a statutory power conferred on police to seize documents:
‘ Powers conferred for one purpose cannot lawfully be used for other purposes without giving rise to an abuse of power. Hence, in the absence of express provision, the Act cannot be taken to have authorised the use and disclosure of seized documents for purposes other than police purposes.’

And in Morris v Director of the Serious Fraud Office, Sir Donald Nicholls V.-C. said in reference to information acquired by exercise of statutory powers:
‘The compulsory powers of investigation exist to facilitate the discharge by the S.F.O. of its statutory investigative functions. The powers conferred by s. 2 are exercisable only for the purposes of an investigation under s. 1. When information is obtained in exercise of those powers the S.F.O. may use the information for those purposes and purposes reasonably incidental thereto and such other purposes as may be authorised by statute, but not otherwise. Compulsory powers are not to be regarded as encroaching more upon the rights of individuals than is fairly and reasonably necessary to achieve the purpose for which the powers were created. That is to be taken as the intention of Parliament, unless the contrary is clearly apparent.’” (citations omitted)

28 Counsel also relied on Williams v Keelty (2001) 111 FCR 175 at [234] in support of a submission that if ASIC were actuated by more than one purpose in exercising its powers under Division 3 of Part 3, one of those purposes being within power and another not, then the exercise of the powers would be invalidated if the ulterior purpose were a substantial purpose in the sense that, but for that purpose, the power would not have been exercised.

29 In my view ASIC had the power to investigate a suspected breach of the orders and to obtain evidence to support a charge of contempt. A breach of the orders is a contravention of s 1323(9) of the Corporations Act. The fact that s 1311 of the Corporations Act provides one sanction against a contravention of s 1323, that is, by criminal proceedings, does not mean that the power to investigate a suspected contravention of s 1323 and to issue notices for production of documents can only be exercised for the purpose of investigating and prosecuting a criminal offence.

30 Neither s 13 nor s 28 of the ASIC Act confines the use of material obtained in an investigation or pursuant to a notice issued under Division 3 to pursuit of the suspected contraventions of the Corporations Act which triggered the investigation, or to the suspected contravention of s 1323 by the institution of criminal proceedings. To the contrary, obtaining material pursuant to the powers in Part 3 of the ASIC Act to investigate and pursue a charge of contempt is authorised by each paragraph of s 28.

31 Such a course is within the scope of an investigation authorised by s 13(1) for ASIC to do what it thinks expedient for the “due administration of the corporations legislation”. In Johns v Connor (1992) 35 FCR 1 at 11, Johns v Australian Securities Commission (1992) 35 FCR 146 at 167, and Boys v Australian Securities Commission (1998) 80 FCR 403 at 423-425 Lockhart J, Black CJ and Von Doussa J and Merkel J said that ASIC could exercise its investigative power under s 13 only for the purpose of investigating a suspected contravention of the corporations legislation, although if, in the course of its investigation it came to suspect additional contraventions, it could investigate those as well. This suggested limitation on the investigative power is inconsistent with the express terms of s 13(1). But even if it is correct, it does not preclude ASIC’s extending its investigation into a suspected contravention of s 1323(9), nor limit the investigation to possible criminal proceedings arising from such a contravention. An exercise of the power pursuant to Division 3 of Part 3 of the ASIC Act to obtain books and information for possible contempt proceedings is a purpose authorised by paras 28(a) and (d).

32 The fact that proceedings for contempt based upon the alleged contravention of orders made under s 1323(1) is classified as a proceeding involving the application of state law which ASIC can bring by virtue of its being a litigant does not mean that such proceedings are not also brought to further the due administration of the corporations legislation. The exercise of a power in order to investigate and prosecute contempt proceedings is within the purpose provided for by s 28(b) of ensuring compliance with the corporations legislation. It is also an exercise of power “in relation to” a suspected contravention of the corporations legislation and thus authorised by s 28(c), notwithstanding that the charge of contempt is not a charge brought pursuant to the exercise of a power expressly conferred by the Corporations Act.

33 Section 1(2)(g) of the ASIC Act requires that, in performing its functions and exercising its powers, ASIC must strive to take whatever action it can take and is necessary in order to enforce and give effect to the laws of the Commonwealth that confer functions and powers on it. Bringing contempt proceedings to enforce orders made under s 1323 and to punish non-compliance with such orders is consistent with s 1(2)(g). The ASIC Act is to be interpreted in a way which promotes ASIC’s ability so to act (s 1(3)).

34 Pursuant to s 37(4) of the ASIC Act a person to whom books are produced under a notice given under s 30 or s 33 may use or permit use of the books for the purposes of a “proceeding”. In that section “proceeding” includes a proceeding under a law of the Commonwealth or of a State or Territory (s 37(10)). The definition of “proceeding” is inclusive. It is not necessary to decide whether the charges of contempt are a proceeding “under” a law of a State. (On one view the proceeding is a proceeding “under” s 23 of the Supreme Court Act 1970 (NSW) which confers on the court all jurisdiction which may be necessary for the administration of justice in New South Wales.) Whether that is so or not, the documents may be used for the purposes of a proceeding as defined in s 5 of the ASIC Act, being a proceeding in a court.

35 For these reasons I reject the submissions of counsel for Mr Sigalla that ASIC was not entitled, through the exercise of its powers under Part 3 of the ASIC Act, to obtain documents for the purpose of investigating or pursuing the charges of contempt.

Notice to Mr Sigalla under section 19(2)(a)

36 Separate arguments were addressed in relation to evidence obtained following the service of a notice on Mr Sigalla on 19 October 2009.

37 On 9 September 2009 ASIC served a notice on Mr Sigalla pursuant to s 19(2) of the ASIC Act requiring him to appear on 9 September 2009 to be examined on oath and affirmation and to answer questions put to him in relation to the investigation into the affairs of TZ Limited, and, in particular, the conduct of him, Mr Falconer and Mr Otten as directors during the period from 1 April 2004 to 18 June 2009. The investigation was also said to extend to suspected contraventions by two other companies. The notice of 9 September 2009 also required Mr Sigalla “to give the Australian Securities and Investments Commsion all reasonable assistance in connection with the investigation.” This notice was given pursuant to s 19(2) of the ASIC Act. The notice given on 9 September 2009 was in the prescribed form. It set out the effect of s 23(1) and s 68 of the ASIC Act insofar as it summarised the terms of those provisions. The notice of 9 September 2009 did not state any particular matter in respect of which ASIC required Mr Sigalla to provide all reasonable assistance.

38 The notice to Mr Sigalla of 9 September 2009 was addressed to him, care of his solicitor, Mr Ward of HWL Ebsworth Lawyers. Mr Sigalla attended the examination on 9 September 2009. Mr Sigalla was further examined on 24 and 29 September 2009.

39 On 19 October 2009 Mr Jackson sent an email to Mr Ward in which he stated:

“ Pursuant to s 19(2)(a) of the ASIC Act 2001, I require Mr Sigalla to give to ASIC all reasonable assistance in connection with its TZ Limited investigation, by attending before one or other of Grant Jackson or Richard Wells at the offices of ASIC at Level 18, 1 Martin Place Sydney on or before 10:00am on Wednesday 21 October 2009 and there signing the original of the letter to JPMorgan Chase, a copy of which are [sic] attached. ”

40 The attached letter was addressed to JPMorgan Chase in New York. It provided for Mr Sigalla to authorise JPMorgan Chase to provide ASIC with every assistance in relation to accounts held by JPMorgan Chase over which Mr Sigalla had or had previously had authority or control, including a particular account said to be in his name, and accounts if any held by two other companies.

41 Mr Sigalla did not sign the attached letter. Mr Sigalla’s solicitor, Mr Ward, replied on 20 October 2009. He noted that Mr Sigalla’s family resided in the United States. Mr Ward said that Mr Sigalla’s wife was dependent upon the JPMorgan Chase bank account on which to live and Mr Sigalla was concerned that any further contact with JPMorgan Chase would cause that bank to close the account thereby depriving the family of its means of meeting their living expenses. Mr Ward said:

“ Mr Sigalla remains conscious of his obligation under Section 19 of the ASIC Act. ...

...

Mr Sigalla will provide assistance by the provision of Bank statements or other documents as reasonably requested in relation to the JPMorgan Chase account in the absence of a draft letter being sent.

...

Mr Sigalla remains conscious of his obligations under the ASIC Act and he is willing to co-operate further with the investigation. In this spirit we would be grateful if you would consider the above and discuss further with us alternatives to the step contemplated by your letter of 19 October 2009 .”

42 Subsequently Mr Sigalla offered to provide ASIC with a draft of a letter to JPMorgan Chase that he was prepared to sign. However, he withdrew from that position. Instead, through Mr Ward, he offered to provide to ASIC all bank statements that ASIC required from the relevant account. Thereafter Mr Ward, on behalf of Mr Sigalla, sent to ASIC various JPMorgan Chase Bank statements.

43 Counsel for Mr Sigalla now objects to the tender of those bank statements on the ground that they were provided in consequence of a demand purportedly made by ASIC pursuant to s 19(2)(a) of the ASIC Act, that is, a demand that Mr Sigalla give ASIC all reasonable assistance in connection with the investigation. Counsel contends that that notice was given on 19 October 2009, and was invalid because the notice given by email on that day did not set out the effect, relevantly, of s 68 of the ASIC Act. Counsel submitted that the statements as to the effect of s 68 of the ASIC Act enclosed with ASIC’s notice of 9 September 2009 could not be relied upon in respect of the notice given on 19 October 2009. Counsel also submitted that the notice given on 9 September 2009 was defective because it did not accurately set out the effect of s 68. Counsel submitted that s 68(1) abrogated the privilege against self-incrimination only in respect of a requirement for a person to give information, sign a record or produce a book. There was no abrogation of the privilege in respect of a person who is required to provide all reasonable assistance pursuant to s 19(2)(a). It was submitted that the notice should have stated that this was the effect of s 68 so that Mr Sigalla would have known that he could have claimed privilege against self-incrimination when required to provide assistance under s 19(2)(a). Instead it should be inferred that he co-operated to the extent he did in the belief that he would otherwise be liable for contravening s 19(2)(a). Hence it was submitted that the bank statements of the JPMorgan Chase bank account produced by Mr Sigalla to ASIC should be rejected as evidence improperly obtained or obtained in consequence of an impropriety or contravention of an Australian law.

44 I do not accept that it was incumbent on ASIC on each occasion on which it required Mr Sigalla to give ASIC all reasonable assistance in connection with the investigation for it to serve a fresh notice in the prescribed form. The form prescribed for the purposes of s 19(2) is Form 1 in Schedule 1 to the Australian Securities and Investments Commission Regulations 2001 (Cth) (“ASIC Regulations”) (Reg 4). That form provides as follows:

“ Form 1 - Notice requiring appearance at an examination or reasonable assistance in connection with an investigation
(regulation 4)
Australian Securities and Investment Commission Regulations 2001
Australian Securities and Investments Commission

NOTICE REQUIRING APPEARANCE AT AN EXAMINATION OR REASONABLE ASSISTANCE IN CONNECTION WITH AN INVESTIGATION

To: ¹
In relation to an investigation of ²
you are notified that under subsection 19(2) of the Australian Securities and Investments Commission Act 2001 (‘the Act’) you are required:
(a) to appear at ³ on
⁴ at
⁵ before ⁶
for examination on oath or affirmation and to answer questions put to you in relation to the investigation; and
(b) to give the Australian Securities and Investments Commission all reasonable assistance in connection with the investigation.
Please note the provisions of subsection 23(1) of the Act (relating to legal representation) and section 68 of the Act (relating to self-incrimination). The effect of those provisions is set out at the end of this form.
Dated ⁴ .

Signature of person authorised
by the Commission to conduct the
examination:

NOTICE OF RELEVANT STATUTORY PROVISIONS
1. Subsection 23 (1) of the Act provides that a person who is required to submit to an examination is entitled to have his or her lawyer attend the examination. It also provides that the person’s lawyer may address the inspector or ask the person questions about matters raised with the person by the inspector.
2. (1) You must not fail to comply with this notice without
reasonable excuse (see subsection 63 (1) of the Act).
(2) It is not a reasonable excuse for failure to comply with this notice that giving information or signing a record or producing a book might tend to incriminate you or expose you to a penalty (see subsection 68 (1) of the Act).
(3) However, if:
(a) before making an oral statement or signing a record in answer to this notice you claim that making the statement or signing the record might tend to incriminate you or expose you to a penalty; and
(b) making the statement or signing the record might in fact tend to incriminate you or expose you to a penalty;
the statement, or the fact that you have signed the record, is not admissible in evidence in any criminal proceedings, or proceedings for the imposition of a penalty, against you other than proceedings in respect of the falsity of the statement or the record.
(4) The right to make a claim of this kind is not available to a body corporate (see subsections 68 (2) and (3) of the Act).
__________________________________________________________________________
1 insert full name and address of the person to whom the notice is to be given
2 insert the nature of the matter to which the investigation relates
3 insert time of day
4 insert date
5 insert full particulars of the address of the place at which the requirement is to be satisfied
6 insert full name of the person conducting the examination ”

45 The prescribed form does not require ASIC to specify the particular assistance it requires in connection with the investigation. Rather, what is contemplated is that a person who may be required to provide such assistance is to be given notice in the prescribed form, which notice is to include a statement as to the effect of ss 23(1) and 68 of the ASIC Act. Once a notice in that form is given the recipient’s attention is drawn to the relevant sections. The form of the notice contemplates that after service of the notice ASIC may make particular requests for assistance. Provided the notice is given in respect of the same investigation, there is no reason, either as a matter of policy or legislative requirement, that the information already given need be repeated. The construction advanced by counsel for Mr Sigalla would be inconsistent with interpreting the Act consistently with ASIC’s “[administering] the laws that confer functions and powers on it effectively and with a minimum of procedural requirements” (s 1(2)(d) and (3)).

46 The notice given to Mr Sigalla on 9 September 2009 was in the prescribed form. Counsel for Mr Sigalla also submitted that the prescribed form did not comply with the requirement in s 19(3) that, relevantly, the notice set out the effect of s 68. As noted above, counsel for Mr Sigalla submitted that s 68 abrogates the privilege against self-incrimination only insofar as a person is required to give information, or sign a record or produce a book (s 68(1)). In the context of Part 3, a “record” appears to be a record of examination. Counsel for Mr Sigalla argued that the effect of s 68 is that the privilege against self-incrimination is not abrogated where a person is required to give ASIC reasonable assistance otherwise than by being required to give information, or to sign a record, or to produce a book. In requiring Mr Sigalla to sign the letter addressed to his bank, ASIC was not requiring that he give information, or sign a “record”, or produce a book.

47 I am prepared to assume the correctness of this argument. Nonetheless, I do not accept that the notice given under s 19(2) did not set out the effect of s 68. The notice correctly said that it was not a reasonable excuse for failure to comply with the notice that giving information, or signing a record, or producing a book, may tend to incriminate Mr Sigalla or expose him to a penalty. That is the effect of s 68. Section 19(3) does not require ASIC to set out more generally the law in relation to privilege against self-incrimination so as to advise a recipient of a notice in what circumstances privilege may be claimed, as distinct from setting out the effect of s 68 which sets out the circumstances in which privilege against self-incrimination may not be claimed.

48 Accordingly, I do not consider that the email of 19 October 2009 requiring Mr Sigalla to give ASIC reasonable assistance by signing the letter addressed to JPMorgan Chase was given improperly or in contravention of an Australian law. The documents that Mr Sigalla ultimately provided were not improperly obtained.

49 Even if I am wrong in my conclusion that the notice of 19 October 2009 is valid, nonetheless, the bank statements were not obtained improperly or in contravention of an Australian law, or in consequence of an impropriety or such a contravention. Mr Sigalla was legally represented at the time. His solicitor said that Mr Sigalla was conscious of his obligations under s 19 of the Act. There is no evidence that Mr Sigalla and his solicitor were not aware of what is now said to be his right to claim privilege against self-incrimination as an answer to the requirement to sign the letter. He did not sign the letter. Rather, he expressed his willingness to co-operate with the investigation. It is a result of that willing co-operation that he provided statements of his bank account with JPMorgan Chase.

50 Had I otherwise been of the view that s 138 was engaged, nonetheless I consider that the desirability of admitting the evidence outweighs the undesirability of doing so. The probative value of the evidence is high. There is unlikely to be any issue as to the accuracy of the bank statements. The evidence is important in relation at least to charge 3 of the Further Amended Interlocutory Process concerning the alleged contempt in relation to payment of school fees. If there were any impropriety or contravention, it was certainly not grave, deliberate or reckless. ASIC could not be criticised for following the form prescribed by the ASIC Regulations. It is true that no other proceeding is likely to be taken in relation to the alleged impropriety or contravention and it is also true that there would have been no difficulty of ASIC obtaining the evidence by a notice given to Mr Sigalla for the production of books to which privilege against self-incrimination would not have been an answer. Weighing all of the factors required by s 138 I do not consider that the evidence ought to be excluded, even if subs 138(1) were engaged.

Legislative requirements as to the form of notices under sections 30 and 33

51 The existence of a power to obtain documents for the purpose of investigating or pursuing charges of contempt and the proper exercise of the power are different matters. Regulation 5 of the ASIC Regulations provides:

“ Notice to produce books

A notice under section 30, subsection 31(1) or section 32A or 33 of the Act to produce books must be in accordance with Form 2. ”

52 Form 2 provides:

“ Form 2 – Notice requiring the production of books
(regulation 5)
Australian Securities and Investment Commission Regulations 2001
Australian Securities and Investments Commission
NOTICE REQUIRING THE PRODUCTION OF BOOKS
To: ¹
In relation to ²
you are notified that, under section 30 ³ /subsection 31(1) ³ /section 32A ³ /section 33 ³ of the Australian Securities and Investments Commission Act 2001 you are required to produce to
⁴ at ⁵ on ⁶ at ⁷
the following books:
⁸
Dated ⁶ .
Signature of the person requiring
the production of books:
_______________________________________________________
1 insert full name and address of the person to whom the notice is to be given
2 insert the nature of the matter to which the request for production of books relates
3 strike out or delete if inapplicable
4 insert the full name of the person to whom the books are to be produced
5 insert time of day
6 insert date
7 insert full particulars of the address of the place at which the books are to be produced
8 insert description(s) of the books that are to be produced”

53 Thus, the Regulations require that a notice requiring the production of books is to insert “the nature of the matter to which the request for production of books relates”.

54 Section 25C of the Acts Interpretation Act 1901 (Cth) provides:

“ 25C Compliance with forms
Where an Act prescribes a form, then, unless the contrary intention appears, strict compliance with the form is not required and substantial compliance is sufficient. ”

55 This provision applies to the ASIC Regulations by virtue of s 13(1)(a) of the Legislative Instruments Act 2003 (Cth). Counsel for Mr Sigalla submitted that s 25C of the Acts Interpretation Act did not apply and that strict compliance with reg 5 was required for such notices to be valid. Counsel drew the distinction between reg 4 which states that for the purposes of subs 19(2) of the ASIC Act, form 1 is prescribed, and reg 5 which states that a notice under, inter alia, ss 30 and 33 of the Act to produce books must be in accordance with form 2. I do not accept that argument. Although reg 5 does not state that form 2 is “prescribed” that is the effect of the regulation. The ordinary meaning of the word “prescribed” is that it is a mandate or direction to comply with some requirement. That is achieved by reg 5 providing that a notice under s 30 or s 33 “must be in accordance with form 2”.

56 Section 251(1) of the ASIC Act provides that:

“ 251 The regulations
(1) The Governor General may make regulations prescribing matters:
(a) required or permitted by this Act to be prescribed; or
(b) necessary or convenient to be prescribed for carrying out or giving effect to this Act. ”

Regulation 5 was presumably made pursuant to s 251 and is a regulation that “ prescribes ” matters for the purposes of the ASIC Act . Thus the effect of s 25C of the Acts Interpretation Act as applied by s 13 of the Legislative Instruments Act is that the regulation will be complied with if there is substantial compliance with the form.

57 As appears below, a number of the notices misstated the nature of the matter to which the request for production of books related. In relation to many of the notices, there is a question as to whether ASIC substantially complied with the requirements of reg 5. If not, there is a question as to whether the consequence of non-compliance is that the notices are invalid. I will deal with these questions when dealing with each of the notices.

File Notes of ASIC’s Investigation

58 ASIC’s investigation pursuant to s 13 of the ASIC Act was prompted by a letter dated 10 August 2009 from the solicitors for TZ Limited to the chairman of ASIC. It was alleged that Mr Sigalla had misappropriated very substantial sums of money belonging to TZ Limited by transferring the same to himself or to a company said to be owned by him, BZI Pty Limited. ASIC’s investigation commenced on 14 August 2009. On 14 August 2009 a file note (“s 13 file note”) was created by Mr John Chambers, the leader of ASIC’s investigation. It set out the scope of ASIC’s investigation under s 13 of the ASIC Act. It was subsequently varied on four occasions. The preparation of such file notes, whilst desirable, is not essential to the power to investigate. Nor do such file notes confine the permitted scope of investigation. The file note of 14 August 2009 in its final form read:

“ On 14 August 2009, ASIC commenced an investigation (‘the TZ investigation’) pursuant to Section 13 of the ASIC Act regarding suspected contraventions of:
(a) Sections 180, 181, 182 and 184 of the Corporations Act 2001 (‘the Act’) which concerns the duties owed by officers and employees of corporations;
(b) Sections 590 and 596 of the Act which concerns offences and frauds committed by officers and employees of corporations;
(c) Section 1308 of the Act which concerns the making of false and misleading statements by corporations; and
(d) Sections 173, 176A, 178BA and 178BB of the Crimes Act, 1900 (NSW),
by Mr Andrew Sigalla, Mr John Falconer and Mr Michael Otten, as directors of TZL between 1 April 2004 to 18 June 2009. The TZ investigation also included the investigation of BZI Pty Ltd (‘BZI’) a company associated with Mr Sigalla. ”

59 Mr Brennan had been given a draft of the file note that was not complete. The draft stated:

“ I have reason to suspect contraventions of:
(a) Sections 182, 184, 590 and 596 of the Corporations Act 2001 (Cth); and/or
(b) Sections 173, 176A, 178BA and 178BB of the Crimes Act 1909 (NSW)
in the period 1 April 2004 to 18 June 2009 (‘ the relevant period ’) concerning the affairs of TZ Limited, in particular the conduct of Sigalla, Falconer and Otten as directors at times during the relevant period. ”

60 Mr Brennan used the incomplete draft of the s 13 file note when completing the notices he issued under s 33 of the ASIC Act.

61 On 16 November 2009 Mr Chambers’ file note was extended to include the following:

“ I continue to have reason to suspect contraventions of
A. Sections 180, 181, 184, 208, 259A, 260A, 590, 1041A to 1041C and 1041E and 1041F, 1307, 1308 of the Corporations Act 2001 (Cth); and
B. Sections 173, 176A, 178BA and 178BB
In the period 1 April 2004 to the 30 June 2009 (‘the relevant period’) concerning the affairs of TZ Limited, in particular the conduct of Sigalla, Falconer and Otten as directors at times during the relevant period.
Further suspected contraventions of
A. Sections 180, 181, 184, 590, 596 and 1307 of the Corporations Act 2001 (Cth); and
B. Sections 176A, 178BA, and 178BB of the Crimes Act 1900 (NSW)
In the period 1 April 2004 to 30 September 2009 concerning the affairs of ZMS, in particular the conduct of Sigalla as a director at all relevant times.
Further suspected contraventions of
i. Sections 63, 64 and 67 of the ASIC Act; and
ii. S 1323 (9) of the Corporations Act 2001 (Cth). ”

62 Sections 63, 64 and 67 of the ASIC Act create offences in respect of non-compliance with requirements made on a person by ASIC under Part 3 of the ASIC Act. Officers of ASIC suspected that Mr Sigalla had not complied with his obligations under Part 3 of the ASIC Act in connection with its investigation and had contravened the orders made on 26 August 2009 in contravention of s 1323(9) of the Corporations Act earlier than 16 November 2009. Mr Chambers suspected contraventions of s 63, 64 and 67 of the ASIC Act by no later than 14 October 2009. Mr Chambers said that there was an informal and gradual extension of the investigation to include suspected contraventions of ss 63, 64 and 67 of the ASIC Act and s 1323(9) of the Corporations Act as different issues emerged over time. The first issue in respect of which ASIC suspected that there may have been a contravention of s 64 of the ASIC Act (which makes it an offence to make false statements in the course of an examination) arose during the course of Mr Sigalla’s examination on 24 September 2009. By the middle of October everyone in ASIC’s investigating team had in mind that the investigation was widened to include suspected contraventions of ss 63, 64 and 67 of the ASIC Act. Mr Chambers said that it was on or around 20 October 2009 that he first suspected that Mr Sigalla had breached the restraining orders and thus suspected a contravention of s 1323(9).

Notices Valid Where Issued for Stated Purpose Even if also Issued for Purpose Not Stated

63 The earliest of the impugned notices is dated 1 September 2009. It was issued to Starwood Pacific Hotels Pty Limited trading as Sheraton on the Park. It was issued by Mr Terry Marks who signed as a delegate of ASIC pursuant to s 33 of the ASIC Act. It required the production of:

“ All books relating to any bookings made by, and accommodation provided to Andrew Sigalla, BZI Pty Ltd, and ZMS Investments Pty Ltd between 30 August 2009 to the date of this Notice, including books relating to the payment of such accommodation. ”

64 The notice described the nature of the matter to which the request for production of books related as:

“ In relation to investigation under section 13 of the Australian Securities and Investments Commission Act 2001 (the ASIC Act) regarding the conduct of Andrew John Sigalla (‘ Sigalla ’), John Falconer (‘ Falconer ’) and Michael Otten (‘ Otten ’), now former directors of TZ Limited (ACN 073 979 272) (‘ TZ Limited ’) between 1 April 2004 and 1 July 2009 ... ”

65 Mr Marks deposed that ASIC was investigating Mr Sigalla’s sources of funds. The investigation was in relation to the allegation referred to above made by solicitors for TZ Limited that Mr Sigalla had misappropriated many millions of dollars. ASIC wished to trace Mr Sigalla’s sources of funds by identifying accounts and funds associated with him and entities associated with him. Mr Marks was aware that upon Mr Sigalla’s return to Australia from New York he was staying at the Sheraton on the Park. As a starting point to identifying funds available to Mr Sigalla, he commenced by establishing the method by which Mr Sigalla was paying for his accommodation. This notice was not issued in order to investigate whether Mr Sigalla had breached orders of the court with the view to possibly instituting proceedings for contempt. In my view it sufficiently stated the nature of the matter to which the request for production of documents related.

66 In Commissioner of Taxation of the Commonwealth of Australia v Australia and New Zealand Banking Group Limited (1979) 143 CLR 499 the High Court considered the validity of notices issued by a delegate of the Commissioner of Taxation purportedly pursuant to s 264(1)(b) of the Income Tax Assessment Act 1936 (Cth). That section provided:

137 The notice of 14 December 2009 issued by Mr Brennan to St George Bank Limited calls for transaction trace details on a particular numbered account for the period 11 December 2009 to 31 December 2009. In her first affidavit Ms McGuiness produced the notice and produced documents in response to it which she said showed that a particular credit card number was linked to Mr Sigalla’s St George Bank account. The effect of Ms McGuiness’ evidence is that the credit card in question was Mr Sigalla’s credit card and was used by him to withdraw cash of $2,000 at the Randwick TAB on 12 September 2009. Also relevant to this issue is a notice dated 28 October 2009 issued by Mr Brennan to St George Bank which called for:

“1. The trace documents in relation to a $2,000 withdrawal from TAB Randwick from account [xxx]
2. The bank statements for account [xxx] for the period 1 September 2009 to current.”

138 The evidence was that the notice was given for a dual purpose, but the trace documents sought in para 1 of the notice would only have been relevant to the investigation as to whether there had been a contravention of s 1323(9). There was no “dual purpose” which could validate the first part of the notice. In her first affidavit of 21 January 2010 Ms McGuiness produced the notice of 28 October 2009 and provided the trace details showing a $2,000 withdrawal from Mr Sigalla’s credit card account as a cash transaction through the TAB at Randwick on 12 September 2009.

139 This evidence is relevant to charges 11, 12 and 13 of the Further Amended Interlocutory Process alleging a breach of restraining orders by Mr Sigalla’s allegedly having paid $3,000 to TAB on or about 12 September 2009 to the credit of a betting account in his name, and thereafter on the same day placing five bets totalling $2,750. These are charges 8-13 of the Further Amended Interlocutory Process. These charges are also at the lower end on the scale of seriousness. The evidence is highly probative of the facts relevant to the charges, but having regard to the seriousness of the charges and the other matters referred to previously in these reasons in relation to the exercise of the judgment under s 138, I consider the evidence should be excluded. I reject paras 24-27 of Ms McGuiness’ first affidavit of 21 January 2010, and the documents referred to in those paragraphs.

140 A further notice was issued by Mr Brennan to St George Bank Limited on 10 February 2010 requiring the production of bank statements for Mr Sigalla’s account for the period from 5 October 2009 to the current date. That notice was also invalid as being given for the sole purpose of investigating or seeking to prove a suspected contravention of the orders. Ms McGuiness’ third affidavit sworn on 18 February 2010 annexed the notice and the statements. It is not clear to me to what charges the bank statements produced in response to the notice of 10 February 2010 are said to be relevant. Prima facie the evidence should be excluded. If counsel can demonstrate that the documents produced in response to that notice have high probative value in relation to one or more of the serious charges, I may allow the evidence. My present view is that the evidence should be excluded.

141 The same affidavit of Ms McGuiness attached earlier bank statements in response to the second paragraph of the notice of 28 October 2009. Those bank statements included an entry showing an “EFTPOS purchase” of $2,000 at TAB Randwick on 12 September 2009. Although I have excluded other evidence in relation to that payment, the bank statements produced in response to the second paragraph of the s 33 notice issued on 28 October 2009 were not obtained improperly. That part of the notice was valid because it was issued in part for the stated purpose of the investigation into Mr Sigalla’s conduct as a director by attempting to trace funds. Its use on the charges for contempt is permitted. Accordingly, I allow paras 10-12 of Ms McGuiness’ third affidavit.

142 The notice issued by Mr Brennan on 5 February 2010 (document 22 of exhibit 1) was issued by Mr Brennan to Tabcorp Limited and required the production of all account opening details of Mr Sigalla. This notice was invalid for the reasons previously given. ASIC reads an affidavit of Mr David Watts of Tabcorp Holdings Limited. Relevantly he annexed a copy of a betting summary and report of account operated by Tabcorp for Mr Sigalla. He deposed to the placing of five bets totalling $2,750 on 12 September 2009. This evidence is highly probative of the charges numbered 8-13 of the Further Amended Interlocutory Process. However, those charges are at the lower end of the scale of seriousness. For the same reasons I gave in relation to the evidence of Mr Cameron, this evidence should be rejected pursuant to s 138. I reject the affidavit of Mr Watts.

143 The last invalid notice was issued by Mr Brennan on 12 February 2010 to the Commonwealth Bank of Australia. It required production of the merchant name of a particular EFTPOS terminal and the bank account statement connected with the EFTPOS terminal and related information. ASIC will read an affidavit of a Mr Rajani Helaluddin sworn on 24 February 2010. He annexed documents showing that the merchant trading name in question was that of Premier Models and that the facility was opened by Mr Chandler. He attached bank statements from Mr Chandler’s account. No submissions were made as to the significance of Mr Helaluddin’s evidence to ASIC’s ability to substantiate its allegations that Mr Sigalla contravened restraining orders by making payments on his credit card to Premier Models. The seriousness of the charges in relation to Premier Models is also at the lower end of the scale. The significance of Mr Helaluddin’s evidence in relation to those charges is not demonstrated. Whilst Mr Helaluddin identifies Mr Chandler with Premier Models, that does not appear in itself to be a relevant matter to the determination of the charges. The attached statement of account of Mr Chandler’s with the Commonwealth Bank does not on its face disclose payments to him from Mr Sigalla. The evidence does not appear to me to be of high probative value. Nor are the charges to which it relates at the higher end of the scale of seriousness. For the same reasons as given previously, I consider that the evidence obtained pursuant to the notice of 12 February 2010 should be rejected pursuant to s 138 of the Evidence Act. I reject the affidavit of Mr Helaluddin.

144 It is possible that there is other evidence that has been read which, consistently with these reasons, should be excluded. If so, that can be addressed on the resumption of the hearing.

145 In summary, I reject the statements of Mr Sigalla’s account with American Express after 12 October 2009 produced by Mr Cameron. I reject paras 18-22 and 24-27 of the first affidavit of Ms McGuiness of 21 January 2010 and the documents referred to in those paragraphs. I reject paras 10-15 of the second affidavit of Ms McGuiness of 21 January 2010 and the documents referred to in those paragraphs. Unless ASIC can demonstrate that the documents produced by St George Bank Limited pursuant to the notice dated 10 February 2010 have high probative value in relation to one or more of the more serious charges, I propose to reject the notice of that date and the statements of account annexed to Ms McGuiness’ third affidavit of 18 February 2010 referred to at paras 14-17. I allow paras 10-12 of that affidavit as they relate to documents produced in response to the second paragraph of the notice of 28 October 2009, which I have found to be valid. I reject the affidavits of Mr Watts and of Mr Helaluddin. I will hear counsel further as to whether any other evidence read to date should be excluded consistently with these reasons. Subject to that, I do not exclude any other evidence read by ASIC to date pursuant to s 138 of the Evidence Act.

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