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Re APCH (No 2)

Re APCH (No 2)

Case [2012] VSC 576 4 December 2012

Stay of Proceedings

Legal Privilege

Corporate Law & Governance

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IN THE SUPREME COURT OF VICTORIA

AT MELBOURNE

COMMERCIAL & EQUITY DIVISION

COMMERCIAL COURT
CORPORATIONS LIST

No. S CI 1199 of 2012

IN THE MATTER of AUSTRALIAN PROPERTY CUSTODIAN HOLDINGS LIMITED (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED) (CONTROLLERS APPOINTED)
BETWEEN
AUSTRALIAN PROPERTY HOLDINGS LIMITED (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED) (CONTROLLERS APPOINTED)	Plaintiff
v
MICHAEL RICHARD LEWIS WOOLRIDGE & ORS	Defendants

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JUDGE:	ROBSON J
WHERE HELD:	Melbourne
DATE OF HEARING:	8 October 2012
DATE OF JUDGMENT:	4 December 2012
CASE MAY BE CITED AS:	Re APCH (No 2)
MEDIUM NEUTRAL CITATION:	[2012] VSC 576

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CORPORATIONS – Application for a stay of civil redress proceedings – Concurrently civil penalty proceedings on foot challenging the same alleged conduct – Relevant principles to be applied – McMahon v Gould applied – Stay refused.

CORPORATIONS – Application to file limited defences on grounds of exercising privilege against exposure to penalty and self-incrimination – Discussion of principles applicable to non penalty proceedings – Ruling that defendants to civil penalty proceedings entitled to rely on privilege in limine – Balance of defendants required to deliver defence – Ruling that the balance of the defendants may seek to take privilege if the claim to privilege is bona fide and reasonably claimed – Onus on balance of defendants to establish penalty privilege bona fide and reasonably pleaded.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J.G. Santamaria QC with Mr J.P. Moore	Clayton Utz
For the ASIC	Mr P.D. Crutchfield SC with Ms M. Hogan (solicitor)	Australian Securities and Investments Commission
For the First Defendant	Mr P.E. Anastassiou SC with Mr R.G. Craig	Norton Gledhill
For the Second Defendant	Mr D.J. Williams SC	Maddocks
For the Third Defendant	Mr P.J. Bick QC with Mr J.P. Tomlinson	SBA Law
For the Fourth Defendant	Mr T.J. McLean	Millens
For the Fifth Defendant	Mr D. Leggatt (solicitor)	DLA Piper Australia
For the Sixth, Twelfth and Fourteenth Defendants	Mr D.J. Crennan	Wotton + Kearney
For the Seventh and Eighth Defendants	Mr P. Cash (solicitor)	Norton Rose
For the Ninth, Tenth, Eleventh and Thirteenth Defendants	Mr A. Joseph (solicitor) with Ms F.J. Bentley	Strongman & Crouch
For the Fifteenth Defendant	Mr D.R. Luxton	Colin Biggers & Paisley

TABLE OF CONTENTS

Introduction............................................................................................................................... 2
Further details about the proceedings......................................................................................... 3
The proceedings to date.............................................................................................................. 4
Should this proceeding by stayed?.............................................................................................. 6
Mr Lewski’s concern that ASIC may take criminal proceedings against him.......................... 10
Would a stay cause prejudice to APCH?................................................................................. 11
If stay not granted, would the proceedings be delayed in any event?....................................... 14
Dishonesty allegations.............................................................................................................. 14
Burden of two proceedings....................................................................................................... 15
Inconsistent judgments............................................................................................................ 16
This proceeding for benefit of the secured appointor................................................................. 16
Risk to impingement of privileges............................................................................................. 17
Dr Wooldridge’s submissions................................................................................................... 18
Submissions of Messrs Clarke, Butler, Jaques, and the other defendants.................................. 19
Conclusions regarding stay of proceedings.............................................................................. 19
The alternative orders............................................................................................................... 20
Legal principles relating to penalty privilege and the filing of a defence................................... 22
Privilege and the filing of a defence........................................................................................... 27
The relevant principles to this application................................................................................ 34

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Re APCH (No 2)

Details

AGLC: re APCH (No 2) [2012] VSC 576
Case: [2012] VSC 576
Decision Date: 4 December 2012

CaseChat Overview and Summary

The case of Re APCH (No 2) involved the Australian Securities and Investments Commission (ASIC) and several defendants, including APCH and others. The defendants sought to stay civil penalty proceedings against them, arguing that concurrent civil penalty and civil redress proceedings challenged the same alleged conduct. The matter was heard in the Federal Court of Australia.

The primary legal issue before the court was whether the civil penalty proceedings should be stayed to allow for the civil redress proceedings to proceed. Additionally, the court had to determine whether the defendants were entitled to rely on the privilege against self-incrimination in limine and the onus of proof concerning the bona fide and reasonable claim of such privilege. The principles discussed in McMahon v Gould were pivotal in the court's reasoning, as they established the framework for determining the appropriate course of action in cases with concurrent proceedings.

The court considered the principles outlined in McMahon v Gould and ruled that the defendants in civil penalty proceedings are entitled to rely on the privilege against self-incrimination in limine. The court found that the defendants should be allowed to take the privilege if the claim is bona fide and reasonably pleaded. The onus was placed on the defendants to establish that the privilege was bona fide and reasonably claimed. Consequently, the court refused the application for a stay of the civil penalty proceedings, allowing both sets of proceedings to continue concurrently.

The final orders of the court were that the application for a stay of the civil penalty proceedings was refused. The court also ruled that the defendants could rely on the privilege against self-incrimination in limine if the claim was bona fide and reasonably pleaded, with the onus on the defendants to prove this. The court did not grant the defendants permission to file limited defences based on the privilege, leaving the matter open for further proceedings.

Orders