Pisano v Australian Securities and Investments Commission - [2004] WASC 55

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: PISANO -v- AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION [2004] WASC 55

CORAM: ROBERTS-SMITH J

HEARD: 23 MARCH 2004

DELIVERED : 23 MARCH 2004

FILE NO/S: CIV 1353 of 2004

BETWEEN: ANTONIO PISANO
Plaintiff
AND
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
Defendant

Catchwords:

Injunction - Interlocutory injunction - Examination under s 19(2) Australian Securities and Investments Commission Act 2001 (Cth) - Refusal to allow applicant's solicitor to attend - Claim solicitor may himself be required for examination - Whether investigation might be impeded, hindered or compromised - Serious question to be tried - Balance of convenience

Injunction - Interlocutory injunction - Notice to produce books under s 33 Australian Securities and Investments Commission Act 2001 (Cth) - Whether too wide - Whether sufficiently specific - Serious question to be tried - Balance of convenience

Legislation:

Australian Securities and Investments Commission Act 2001 (Cth), s 19, s 33

Result:

Application granted

Category: B

Representation:

Counsel:

Plaintiff: Mr I A Morison
Defendant: Mr C G Colvin SC & Mr M K Benter

Solicitors:

Plaintiff: Williams & Co
Defendant: Australian Securities & Investment Commission

Case(s) referred to in judgment(s):

Nil

Case(s) also cited:

Nil

ROBERTS-SMITH J: This is an application by way of chamber summons filed on 22 March 2004 for orders for injunctive relief.
The plaintiff has presented a minute of proposed orders which shows that the orders sought are first that the Australian Securities and Investments Commission ("ASIC") be restrained from proceeding with the examination of the plaintiff pursuant to s 19(2) of the Australian Securities and Investments Commission Act 2001 (Cth) ("the ASIC Act") until the hearing and determination of the plaintiff's application by originating summons also filed in this matter; and secondly, that ASIC be restrained from seeking to enforce notices issued to the plaintiff pursuant to s 33 of the ASIC Act until the hearing and determination of the plaintiff's application for declaratory relief is determined.
The originating summons was likewise filed on 22 March 2002 and that seeks an order setting aside ASIC's decision to exclude Paul Thomas Williams from the plaintiff's s 19 examination and an order setting aside the notices to which I have referred.
Alternatively to those orders, the plaintiff seeks orders that ASIC extend the time for compliance with the notices until the hearing and determination of the plaintiff's application for declaratory relief or otherwise.
The grounds of the application are set out on the originating summons that as Mr Williams, the plaintiff's lawyer, is not acting for other examinees and is not likely to be so acting and is not under investigation personally by the defendant and is not likely to be under investigation, ASIC had no power to exclude him from the s 19 examination and the plaintiff is entitled by law to appear at the examination with Mr Williams as his lawyer.
Secondly, it is claimed that the s 33 notice is invalid in that it fails to specify any books or any category or class of books; it fails to identify the matter or matters being investigated or to identify the matter or matters sufficiently; it was unreasonable in allowing the plaintiff one-half of one hour after service to comply with the notice; it was unreasonable as to the width of the documents sought; it was uncertain and its issue constituted an abuse of power.
The application for the interlocutory injunction is supported by the affidavit of Antonio Pisano sworn on 22 March 2004.
I do not propose to go through in any detail what is contained in that affidavit. For present purposes it is sufficient to note that he is a director of Pisano Enterprises Pty Ltd in liquidation, and Yenbase Pty Ltd. A liquidator has been appointed to Pisano Enterprises, that being Mr Gary Anderson. On 16 March 2004 two officers of ASIC attended his offices and served him with notices pursuant to s 19(2) and s 33 of the ASIC Act.
There were some subsequent communications between the parties in relation to those notices. As a result of that, further notices were issued. It is submitted by Mr Morison on behalf of the applicant that the form of the new notices, and specifically that issued pursuant to s 33 of the Act, does not remedy the defect of which he complains.
The second notice was issued on 18 March 2004 and lists the books required to be produced as:
(1)all books and records relating to Pisano Enterprises Pty Ltd In Liquidation, either in its own right or in its capacity as trustee;
(2)all books and records relating to the Tony's Family Trust;
(3)all books and records relating to Yenbase Pty Ltd, either in its own right or in its capacity as trustee;
(4)all books and records relating to Teacher Investment Planning Service;
(5)all books and records relating to Pirasano Pty Ltd, either in its own right or in its capacity as trustee;
(6)all books and records relating to Peninsula Investments WA Pty Ltd, either in its own right or in its capacity as trustee, and
(7)all books and records relating to I and N Pisano Nominees Pty Ltd, either in its own right or in its capacity as trustee.
There is a further notice indicating books to be produced relating to a long list of creditors.
The point in relation to the attendance of Mr Williams is that ASIC has indicated in writing that it proposes to conduct an examination of him under s 19 of the ASIC Act, and so on that basis it is possible that he will be a witness in the matter ASIC is investigating. They say the end result is that the attendance of Mr Williams at the s 19 examination of Mr Pisano could lead to the investigation being impeded, hindered or compromised, and it is therefore likely that Mr Williams will be excluded from attendance.
I note the way in which that last indication has been formulated; that is to say, as an indication rather than a direction, but I think for all practical purposes it can be taken as a direction that Mr Williams is or will be excluded from the examination of Mr Pisano. It certainly seems to have been treated that way by the parties thus far. There is no suggestion that Mr Williams may be permitted by ASIC to attend the examination.
It is important for me to bear in mind that it is not for me to resolve the substantive issues today, and I do not do so. I am required to consider the arguments advanced by both sides on the basis of the principles which ordinarily apply to applications for interlocutory injunctions.
Mr Morison submits, on the basis of a range of authorities to which he has referred me, that both of the issues sought to be raised are live and viable issues so far as his client is concerned and in effect, therefore, there is a serious issue to be tried in respect of each of them.
So far as the general principles are concerned it is clear this is a case in which damages would not be an appropriate remedy. We are concerned here with the conduct of a corporate investigation by ASIC and either that investigation will continue on the basis of evidence provided in the course of an examination of Mr Pisano and on documents produced by him in the short‑term, or not.
The position adopted by senior counsel for ASIC, Mr Colvin SC, is that I should not in fact deal with the application for the interlocutory injunction this morning but rather simply adjourn the application to general chambers on 29 March 2004. He makes that submission on the basis of an undertaking given by ASIC that it will not proceed with the examination of Mr Pisano nor with the notices for seven days. In the meantime inquiries could be made, he says, of the court listing office, to ascertain at what time the originating summons could be brought on for hearing, and that if that could be done relatively quickly, then the position could be reviewed on 29 March in light of that.
It seems to me that there is really no issue so far as principle is concerned as to whether or not there is a serious question to be tried in respect of the two matters sought to be raised; that is not something which has been challenged by senior counsel for ASIC.
The question, it seems to me, really is, given as I am satisfied there is a serious issue to be tried in respect of each of those matters, the balance of convenience, and that perhaps may be framed as a question as to on which side the greater injury would lie were the interlocutory order made or not made as the case may be.
Given the undertaking already proffered by ASIC, it seems to me that there would not be significant disadvantage to ASIC were the matter to be dealt with today and the interlocutory injunction to go.
The point made by Mr Colvin as to the exigencies, integrity or effectiveness of the investigation is of course a sound one, but that could be accommodated by liberty to apply, and indeed it seems to me that the situation would be more satisfactory from not only the point of view of the parties but also that of the Court were the injunction to go but that the position of ASIC be accommodated by liberty to apply. In that way the same outcome as that proposed by Mr Colvin would result if the order were made except that it would avoid the necessity for the parties to come back in relation to the interlocutory injunction unless the defendant wished to vary or discharge it. Otherwise the matter could go straight to the hearing of the originating summons.
For those reasons it seems to me that the interlocutory injunction should be granted this morning but it should be granted on the basis that the plaintiff provides an undertaking in the usual form. The injunction should include a provision that the defendant would have liberty to apply on 48 hours' notice to discharge or vary the injunction.
In that way, should ASIC wish to put on an affidavit or affidavits and seek to vary or discharge the injunction, it would have the opportunity of doing so and its position in the meantime would not be any worse in my view than had it simply proceeded on the basis of the undertaking it has already indicated, bearing in mind of course that was only for seven days whereas the interlocutory injunction will run until determination of the originating summons.