ASIC v Christopher John Mapstone

Supreme Court of NSW|2006-09-14|Before: White J

Reported Decision : 59 ACSR 214 (2006) 24 ACLC 1246

CITATION : ASIC v Christopher John Mapstone [2006] NSWSC 993

JURISDICTION : Equity Division Corporations List

CATCHWORDS : CORPORATIONS - Injunctions - Plaintiff alleges contraventions by defendant of ss 180(1), 181(1) and 182(1) Corporations Act 2001 (Cth) - Plaintiff seeks orders pursuant to ss 206C and/or 206E Corporations Act disqualifying defendant from managing corporations - Where serious question to be tried that defendant breached Corporations Act - Where serious question to be tried that defendant liable to be disqualified from managing corporations - Whether Court has power to grant interim injunction pursuant to s 1324 Corporations Act restraining defendant from managing corporations until final determination of proceedings - Where no serious question to be tried that plaintiff could obtain injunction on final basis - Held that Court has no power to grant interim injunction in circumstances of case - Balance of convenience considered in any event - Delay by plaintiff, absence of threat by defendant to public interest and absence of undertaking as to damages from plaintiff - Interim injunctive relief refused.

LEGISLATION CITED : Corporations Act 2001 (Cth) Trade Practices Act 1974 (Cth)

National Roads and Motorists Association v Parker [1986] 6 NSWLR 517 Australian Securities and Investments Commission v Australian Investors Forum (No 2) (2005) 23 ACLC 927 Australian Securities and Investments Commission v Edwards (2004) 51 ACSR 320 Australian Securities and Investments Commission v Sealand Insurers and Brokers Pty Ltd [1999] NSWSC 788 Kerridge v Foley [1968] 1 NSWR 628 CASES CITED : Air Express Limited v Ansett Transport Industries Operations Pty Limited (1981) 146 CLR 249 Corporate Affairs Commission (NSW) v Lombard Nash International Pty Ltd (1986) 11 ACLR 566 J D Heydon & B G Donald, Trade Practices Law: REstrictive Trade Practices, Deceptive Conduct and Consumer Protection, 'Injunctions: Section 80', Law Book Co, Sydney, 1989 Australian Securities and Investments Commission v Mauer-Swisse Securities Limited (2002) 42 ACSR 605 Trade Practices Commission v Gold Coast Property Sales Pty Ltd (1994) 49 ACSR 442 Australian Securities and Investments Commission v Sweeney [2001] NSWSC 114

Australian Securities & Investments Commission PARTIES : v Christopher John Mapstone

COUNSEL : Plaintiff: A J Abadee Defendant: In Person

SOLICITORS : Plaintiff: ASIC Defendant: N/A

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST

3863/06 Australian Securities & Investments Commission v Christopher John Mapstone JUDGMENT 1 HIS HONOUR: This is an application under s 1324(4) of the Corporations Act 2001 (Cth) for an interim injunction to restrain the defendant from managing corporations pending determination of the plaintiff's application. In its originating process, the Australian Securities and Investments Commission ("ASIC") sought relief which was modified by a statement of claim subsequently filed. It now claims the following relief: " (a) A declaration pursuant to s 1317E of the Corporations Act that the defendant, whilst being a director of Tri-State Petroleum Pty Ltd, contravened ss 180(1), 181(1) and/or s 182(1) of the Corporations Act by: i. misapplying funds belonging to the Company for purposes not authorised by the Company; ii. failing to account for the withdrawal of the Company's tax refund of $608,367 for the financial year ended 30 June 2002; iii. failing to deliver all of the Company's documents in his possession despite the Company's request; iv. failing to assist the Company to reconstruct its accounts despite the Company's request; and/or v. failing to complete an inventory of the Company's assets and liabilities. (b) An injunction pursuant to s 1324 of the Corporations Act to restrain the defendant from managing corporations for such period as the Court thinks fit. (c) An order or orders pursuant to ss 206C and/or 206E of the Corporations Act that the defendant be disqualified from managing corporations for such period as the Court thinks fit. (d) Such further and other declarations and orders as the Court thinks fit; " 2 The statement of claim alleges that the defendant was a bankrupt between 2 August 1990 and 17 January 2004. It is alleged that from April 1997, the defendant held office as a director of, and managed, various companies, notwithstanding that pursuant to s 206B(3) of the Corporations Act he was disqualified from managing corporations. 3 This claim is not being pursued. It was raised because ASIC had obtained a search of the National Personal Insolvency Index of the Insolvency Trustee Service of Australia. That search indicated that the defendant had indeed been bankrupt between 2 August 1990 and 17 January 2004. The defendant disputed this. I granted him an adjournment to enable him to obtain documents to prove his assertion that he had been discharged from bankruptcy in about 1993. Such documents have now been produced and show that he was discharged from bankruptcy on 17 January 1994. As will be seen, this has significant implications for the outcome of the present application. 4 The interim relief is sought pending the determination of ASIC's claim that the defendant be disqualified from managing corporations pursuant to s 206C or s 206E of the Corporations Act. The power under s 206C to disqualify a person from managing corporations arises if a declaration is made under s 1317E that a person has contravened a civil penalty provision, and the Court is satisfied that the disqualification is justified. The power to disqualify a person from managing corporations arises under section 206E if, inter alia, the person has at least twice contravened the Act, and the Court is satisfied that the disqualification is justified. Serious Issue that Defendant may be Disqualified from Managing Corporations 5 In submissions, ASIC relied on two matters as giving rise to a serious issue that there were grounds for disqualification under ss 206C and 206E. It submitted that there was serious issue that the defendant has contravened s 182 of the Act. Subsection 182(1) provides: " 182 Use of position - civil obligations

Use of position - directors, other officers and employees (1) A director, secretary, other officer or employee of a corporation must not improperly use their position to: (a) gain an advantage for themselves or someone else; or (b) cause detriment to the corporation. Note: This subsection is a civil penalty provision (see section 1317E). " 6 The alleged breach of s 182 was that the defendant failed to account for a tax refund of $688,367 received by Tri-State Petroleum Pty Ltd in February 2002. 7 Tri-State was incorporated on 27 August 1997. Between that date and 5 November 2002, the defendant was its sole director and secretary. There is evidence that he was also the sole signatory to the company's bank accounts. All of the shares in Tri-State were owned by a Hong Kong company, Topwell International Oil & Trading Limited. 8 Tri-State conducted business as an importer and wholesaler of refined petroleum products. It appears that in about July 2000, the company ceased carrying on active business. On 24 August 2000, Topwell wrote to the defendant requesting that he implement immediately what was called a "shareholder's resolution". This included a resolution that all withdrawals from the company's bank accounts required the signatures of both the defendant and a Mr Griffin, from the firm of accountants acting for the company. Topwell also "resolved" that all funds of Tri-State exceeding the amount the company was required to pay to third parties be paid into an account in the company's name with a named financial institution and not be accessed, except on the joint signatures of the defendant and Mr Griffin. ASIC contends that the defendant failed to honour this request. However, that failure was relied on only as background to the alleged contravention of s 182 by the defendant's failing to account for moneys received in February 2002, and subsequently disbursed. Therefore, it is unneccesary to consider what obligation, if any, the defendant had to act on such a resolution (National Roads and Motorists Association v Parker (1986) 6 NSWLR 517 at 521). The constitution of Tri-State was not in evidence. 9 Tri-State received the tax refund of $608,366.94 on 5 February 2002. The moneys were paid into an account of the company with the National Australia Bank. Between that date and 12 August 2002, the account was reduced to a credit balance of $492.59. As I have said, the evidence is that the defendant was the sole signatory to the account at this time. The defendant was removed as the director and secretary of Tri-State on 5 November 2002. He was replaced by a Mr George Jack. Mr Jack is an accountant and had acted for Tri-State from about July 1999. Mr Jack deposed that: " In the year ended 30 June 2002 the company received a refund of overpaid tax from the Australian Taxation Office ("ATO") of $608,367. Based on my knowledge of Tri-State's affairs, there would not have been any significant creditors outstanding at that time and yet that entire refund had been withdrawn from Tri-State's accounts without any explanation during the time when the Defendant was a sole signatory of Tri-State's bank account ".

10 Mr Jack also deposed that it had not been possible for him to prepare financial statements or taxation returns for Tri-State for the financial years after the year ended 30 June 1999 because the defendant has failed to provide company records. 11 The company's bank statements show that the moneys received on 15 February 2002 were disbursed by various internet transfers. The bank statements provide descriptions of some such transfers. The first was described as "transfer lawyer" in an amount of $10,000. That money was paid on 19 February 2002. Some transfers have the description "transfer INV". There was also one payment to Wesfarmers of $156,000. The others only have the description "transfer". 12 The defendant submitted that, although Mr Jack says, based on his knowledge of Tri-State's affairs, that the company would not have had any significant creditors, it does not appear what knowledge Mr Jack had of the company's affairs in 2002. It was pointed out that, whatever his knowledge was, it was insufficient to enable him to prepare financial statements. There is some force in that submission. Nonetheless, the transactions cry out for explanation and none has yet been provided. 13 The defendant submitted that the company had debts arising from legal action to which it was a party, which was brought by the liquidator of a company called Express Lane to recover an alleged voidable preference. There is evidence that as at February 2001, such action was in prospect. 14 However, with the exception of the payment of $10,000, it is no more than speculation to say that the transfers were made in payment of any debts of the company for legal expenses, and it is no more than speculation to say that any of the payments were made in connection with such litigation. 15 This is an interlocutory application. The evidence on the claim for the disqualification of the defendant is far from complete. The defendant represented himself on the application. He swore an affidavit which partially responded to Mr Jack's evidence. The affidavit is difficult to follow and appears to assume a prior knowledge of Tri-State's affairs and of a dispute between the defendant and that company's shareholders. The defendant's affidavit included the following paragraphs, which were read without objection: " 15. The Claimant TSP, through George Peter William Jack has previously stated to have access to the company accounts, conversely then calculated from information, a figure as to a claim against the Defendant. The reference is to a margin commission paid between 9% and 15%.

The shareholders of Topwell have not provided any contract of engagement with the Director (Defendant) of TSP, who developed the business as a new company with no infrastructure.

The Claimant TSP, through George Peter William Jack has sought to seek a claim from the Defendant and has not sought to make a claim against the company debtors, as previously referred in this matter and a previous matter 2300/2005.

I have been present at the firm of Griffin Jack & Co., with the shareholders of Topwell International Oil & Trading Limited, the shareholder of Tri-State Petroleum Pty Limited, where operating, supply, payment and tax issues were discussed.

The Defendant had a livelihood removed at June 30, 2000 and will seek a cross claim against the original claimant Topwell.

The Defendant will also seek a cross claim against Mitsui Oil Asia Pte Limited for the 'stop supply' without advice." 16 The defendant did not address the complaint that he had failed to account for the disbursement of the tax refund of $608,367. 17 The inference is open from the fact that the defendant had control of Tri-State's bank account that, apart from the payment of $176,000 to Wesfarmers and the $10,000 paid for "transfer lawyer", the moneys were paid from Tri-State's bank account for his personal benefit. There is no material to show that the defendant was entitled, or arguably entitled, to receive any such moneys. 18 The defendant has not yet provided an explanation for the transaction. There is a serious question to be tried that the defendant has contravened s 182 of the Corporations Act. I accept that there is a serious question to be tried that a declaration may be made under s 1317E of such a contravention. 19 The defendant has not admitted receiving the funds. If, at a final hearing, it emerges that the defendant has taken the company's moneys for his personal benefit without any entitlement to those moneys, or at least without a claim of right made in good faith, there will be a strong case for the Court to be satisfied that a disqualification order is appropriate. No claim for an entitlement to the moneys received by the company in February 2002 has been articulated by the defendant. 20 For these reasons, there is a serious question to be tried that the defendant is liable to be disqualified from managing corporations pursuant to s 206C. 21 ASIC relied on the same alleged contravention of s 182 as being one of at least two contraventions to be established pursuant to s 206E. The other contravention on which it relies is a contravention of s 475(1) of the Act, for which the defendant was convicted on 20 April 2005. 22 There is a serious question to be tried that the defendant is liable to be disqualified from managing corporations pursuant to s 206E. Other Proceedings Against the Defendant 23 There are some further relevant facts. On 18 August 2005, orders were made in proceedings No. 2721 of 2004 between Tri-State and the defendant, pursuant to s 1317H of the Corporations Act, that the defendant compensate Tri-State in the amount of $1,773,333 and pay interest of $205,949.55. A declaration was made, purportedly pursuant to s 1317E of the Act, that the defendant had contravened subss 181(1) and 182(1) of the Act by failing to account to Tri-State for the profits before tax totalling at least $1,773,333 in the period from 1 July 1999 to 25 July 2000. 24 As I said, the declaration was purportedly made pursuant to s 1317E. These orders were made in default of a defence. The Court's attention appears not to have been drawn to subss 1317J(1) and (4), which provide that only ASIC may apply for a declaration of contravention (although the company may apply for compensation orders). Presumably that is why ASIC did not rely upon those declarations in its submissions on the present application. 25 On 16 June 2006, Tri-State served a bankruptcy notice on the defendant claiming a debt of $1,979,282.55 pursuant to the judgment. The creditors' petition was filed on 19 August 2006. This petition is listed for hearing on 28 September 2006 in the Federal Magistrate's Court. The Defendant's Directorships 26 ASIC's records show that the defendant is currently a director of six companies. There is no evidence as to who are the shareholders of those companies. No evidence was adduced by ASIC as to whether any of them is currently trading or, if so, what the level of trading is. Nor is there evidence of how many creditors the companies have, nor what is the amount of debts the companies have incurred or are incurring. Power to make Interim Order Restraining Defendant from Managing Corporations 27 The defendant describes himself as "a consultant in the petroleum industry". He volunteered from the bar table that two of the companies are currently trading. 28 Disqualification orders under ss 206C and 206E are final orders. The present question is whether there is power to make an interim order that the defendant be restrained from managing corporations until the final determination of the proceedings, on the basis of there being a serious question to be tried that such disqualification orders may be made at a final hearing. If there is such power, the issue then is whether the power should be exercised. 29 ASIC relied upon subs 1324(4) as providing the jurisdiction to make the interim order sought. As noted above, the statement of claim seeks an injunction pursuant to s 1324 of the Corporations Act to restrain the plaintiff from managing corporations for such period as the Court thinks fit. Section 1324 relevantly provides: " 1324 Injunctions (1) Where a person has engaged, is engaging or is proposing to engage in conduct that constituted, constitutes or would constitute: (a) a contravention of this Act; or (b) attempting to contravene this Act; or (c) aiding, abetting, counselling or procuring a person to contravene this Act; or (d) inducing or attempting to induce, whether by threats, promises or otherwise, a person to contravene this Act; or (e) being in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of this Act; or (f) conspiring with others to contravene this Act; the Court may, on the application of ASIC, or of a person whose interests have been, are or would be affected by the conduct, grant an injunction, on such terms as the Court thinks appropriate, restraining the first-mentioned person from engaging in the conduct and, if in the opinion of the Court it is desirable to do so, requiring that person to do any act or thing.

… (4) Where in the opinion of the Court it is desirable to do so, the Court may grant an interim injunction pending determination of an application under subsection (1). … (6) The power of the Court to grant an injunction restraining a person from engaging in conduct may be exercised: (a) whether or not it appears to the Court that the person intends to engage again, or to continue to engage, in conduct of that kind; and (b) whether or not the person has previously engaged in conduct of that kind; and (c) whether or not there is an imminent danger of substantial damage to any person if the first-mentioned person engages in conduct of that kind. … (8) Where ASIC applies to the Court for the grant of an injunction under this section, the Court must not require the applicant or any other person, as a condition of granting an interim injunction, to give an undertaking as to damages. " 30 The injunctive power under s 1324(1) arises if a person has engaged, is engaging, or proposes to engage, in conduct that constituted, constitutes, or would constitute, a contravention of the Act (s 1324(1)(a); paras (b) to (f) are not presently relevant.) At least one of those conditions for the exercise of power under subs 1324(1) must be satisfied. Subsection 1324(6) does not indicate otherwise, although the subsection makes it clear that if one of the conditions for the exercise of the power has arisen, the power may be exercised whether or not the matters in s 1324(6)(a)-(c) arise. Under subs 1324(1), the Court may grant an injunction restraining that person from engaging in "the conduct". The conduct which may be restrained is conduct by which the person has contravened, or is contravening, or would contravene the Act. 31 ASIC's case originally included an allegation that the defendant had contravened the Act by managing corporations when he was disqualified. That part of its case has fallen away. There is no evidence that the defendant has contravened the Act by managing corporations, as distinct from his having engaged in particular conduct which allegedly contravenes the Act, in failing to account for moneys received by the company. Nor is there evidence that the defendant proposes to continue as a director, or otherwise to manage corporations, if he is made bankrupt. On the present materials, I see no basis upon which the Court could make the final injunction sought. 32 Counsel for ASIC referred to Australian Securities and Investments Commission v Australian Investors Forum (No 2) (2005) 53 ACSR 305; 23 ACLC 929, where an interim injunction was granted restraining a defendant from managing a corporation. However, that order was made when the defendant was bankrupt, and therefore was engaging, or threatening to engage, in conduct in breach of the Act (paras [1] and [48]). 33 In Australian Securities and Investments Commission v Edwards (2004) 51 ACSR 320, Barrett J refused to accept an undertaking from a defendant not to manage corporations. The undertaking was offered in terms of s 206A which forbids persons under disqualification from doing anything which would amount to management of a corporation. His Honour said (at paragraphs 8 to 11): " [8] The difficulty is that the court does not have jurisdiction to make an order that the first defendant desist from doing the things mentioned in s 206A(1), whether for a specified period or at all. There is no power under the Corporations Act for the court to make an order forbidding a person to be a director or secretary of corporations generally or compelling a person to desist from all acts of management and administration in relation to corporations. There is a power under each of ss 206C, 206D, 206E and 206F, exercisable by the court upon application made by ASIC, to "disqualify a person from managing corporations" for a period determined in accordance with the particular section. But the only consequence of such an order of disqualification is to subject the person in respect of whom it is made to the s 206A regime which makes it an offence for a disqualified person to do any of the things concerning management and administration of corporations mentioned in s 206A(1). A disqualification order under any of the sections mentioned does not, of its own force, operate to restrain the person concerned from engaging in any conduct. Its sole effect is to bring the person within s 206A.

[9] The offence created by s 206A(1) is stated to be an offence of strict liability. This means that what the Criminal Code (Cth) calls "fault elements" are not part of the offence and that the defence of "mistake of fact" under s 9.2 of that code is not available. Section 206A(2B) does, however, say that it is a defence to a contravention of s 206A(1) if the person concerned has permission under ss 206F or 206G which includes leave to manage the particular corporation in question. There is thus a special statutory scheme, complete with its own mental elements and mechanisms for dispensation.

[10] It would be inconsistent with this scheme of regulation, in which a declaration by the court under s 1317E may lead on to the court's making an order of disqualification under s 206C the effect of which is to cause conduct otherwise lawful to be an offence under s 206A(1), for the court simply to make an order prohibiting the doing of the things which, if done, would amount to the offence. The Corporations Act does not allow any such order to be made; nor does any established head of equitable jurisdiction. While an injunction may lie where conduct will entail contravention of a statutory prohibition, the position in the present context is that there is no statutory prohibition (in the form of creation of an offence) unless and until both a s 1317E declaration and a s 206C order have been made by the court. The foundation for the grant of a final injunction therefore does not exist in this case.

[11] Since, on this analysis, the court has no power to grant an injunction in the same terms as the proffered undertaking, the constraints discussed in the Thomas Australia Holdings case mean that it will not accept that undertaking." 34 Subsection 1324(4) permits the Court to grant an interim injunction pending a determination of an application under subs (1). Section 1324(4) is not expressly confined to granting an interim injunction to restrain conduct which allegedly has contravened, is contravening, or would contravene the Act. It might be implied that the subsection is so confined (Australian Securities and Investments Commission v Sea-Land Insurers and Brokers Pty Ltd [1999] NSWSC 788 at [6]-[11]). It is not necessary for me to express a concluded view on this. However wide the jurisdiction under subs 1324(4) might be, it is a jurisdiction in aid of an application under subs 1324(1), not in aid of applications brought under other provisions of the Act. Accordingly, unless there is a serious question to be tried that ASIC is entitled to the final injunctive relief which it seeks under subs 1324(1), it would not be proper to grant an interim injunction under subs 1324(4). For the above reasons, I do not think there is a serious question to be tried that ASIC could obtain the injunction sought, in the absence of evidence that the defendant has in the past, or proposes in the future, to manage corporations whilst disqualified. Discretionary Reasons for Refusing Interim Relief if Power were Available 35 If, contrary to my view, there is such a power under s 1324(4) to grant the interim injunction sought in this case, I would not exercise that power because of the delay in the making of the application, and the lack of evidence as to any jeopardy faced by persons dealing, or proposing to deal, with corporations which the defendant is managing. 36 As to the delay, the present director, Mr Jack, assumed management of Tri-State in November 2002. The alleged contraventions are now four years old. Proceedings were commenced by Tri-State against the defendant on 5 May 2004. ASIC received a complaint in relation to the defendant's conduct on 25 August 2005. These proceedings were commenced on 21 July 2006. The delays are self-evident. The delay from 25 August 2005 to 21 July 2006 in making the present application suggests there is no pressing urgency for the grant of the injunctive relief. 37 That is emphasised by the fact that there is no evidence that any person who has dealt with other companies the defendant has been managing since November 2002 has suffered, or is likely to suffer, from the defendant's behaviour. There is no evidence as to the extent of trading being undertaken by any of the companies the defendant is managing, or their financial position. In other words, there is no evidence of any particular threat to the public interest against which an interim injunction would provide protection. 38 The absence of an undertaking as to damages, if that is a relevant consideration, would only add support to my view that the power pursuant to s 1324(4) should not be exercised in this case, if the power were otherwise available. I prefer to express no concluded view on the effect of s 1324(8) on whether the absence of an undertaking as to damages can be considered on the balance of convenience. 39 The rule which applies in relation to the equitable jurisdiction to grant interlocutory injunctions is that such an injunction will be refused if no undertaking as to damages is proffered, except in special circumstances (Kerridge v Foley [1968] 1 NSWR 628 at 630; Air Express Limited v Ansett Transport Industries (Operations) Pty Limited (1981) 146 CLR 249 at 311). That rule cannot apply to applications under s 1324. Clearly, the power to grant interim injunctions on ASIC's application is not reserved merely for special cases. 40 Hardship to the defendant, if the defendant is restrained by an interim injunction, but it is found at the final hearing that the injunction ought not to have been given, must be a relevant consideration under s 1324(4). Prima facie, the absence of amelioration of that hardship through an undertaking as to damages is also relevant to deciding whether the grant of an interim injunction is desirable (Corporate Affairs Commission (NSW) v Lombard Nash International Pty Ltd (No. 1) (1986) 11 ACLR 566 at 571). On the other hand, s 1324(8) may indicate a legislative intention that not only can an undertaking as to damages not be required where ASIC is the applicant, but also that its absence is not to be taken into account. The authorities on the like provision of s 80(6) of the Trade Practices Act 1974 (Cth) do not all speak with the one voice (J D Heydon & B G Donald, Trade Practices Law: Restrictive Trade Practices, Deceptive Conduct and Consumer Protection, 'Injunctions: Section 80', Law Book Co, Sydney, 1989 at [18.760]). I, therefore, prefer to express no view on that question until it is necessary to do so. 41 ASIC submitted that the utility of the grant of an interim injunction was not confined to the risk of future wrongdoing, but could extend to making known the Court's disapproval of the defendant's conduct. It cited Australian Securities and Investments Commission v Mauer-Swisse Securities Limited (2002) 42 ACSR 605 at [11] and [36]. With respect to those of a contrary view, I find it difficult to see how, except perhaps in the clearest of cases, the Court could take this consideration into account in applications for an interim injunction where, by definition, the evidence will be incomplete, and typically will be untested by cross-examination. In Trade Practices Commission v Gold Coast Property Sales Pty Ltd (1994) 49 FCR 442, Cooper J said of s 80 of the Trade Practices Act (at 446): " In my view such observations as touch on the Court marking its disapproval of conduct which is in contravention of the Act have no relevant application where the relief sought is interlocutory. In that circumstance the purpose of the interlocutory injunction is to prevent the repetition of conduct in the public interest until it is determined whether or not such conduct contravenes any provisions of the Act and, if so, what is in all the circumstances appropriate final relief. "

42 In my view, the same observations are applicable to interlocutory applications under s 1324(4) of the Corporations Act. In Australian Securities and Investments Commission v Sweeney [2001] NSWSC 114, Austin J said (at [34]-[35]): " 34 The present proceedings have been brought by the public regulator to enforce the corporations and securities legislation. According to s 1 (2) of the Australian Securities and Investments Commission Act 1989 (Cth), in performing its functions and exercising its powers, the plaintiff must strive to achieve various objectives, including: · to promote the confident and informed participation of investors and consumers in the financial system; · to administer the laws that confer functions and powers on it effectively and with a minimum of procedural requirements; and · to take whatever action it can take, and is necessary, in order to enforce and give effect to the laws that confer functions and powers on it. 35 These provisions imply that it is appropriate for the Commission to take civil proceedings for declaratory and injunctive relief in respect of past events, even if there is no risk of repetition, where the outcome may establish that the conduct complained of was wrongful (and thereby mark the Court's and the community's disapproval of it) and may deter other wrongdoers. It is appropriate for the Court to take these matters into account in the exercise of its discretion to grant or refuse such relief. " 43 This was said in the context of an argument that a permanent injunction would not be granted founded on past conduct, but only on threatened future conduct and, therefore, substituted service should not be ordered. His Honour's remarks were not addressed to the exercise of discretion to grant interlocutory injunctions. To the extent Palmer J indicated otherwise in Australian Securities and Investments Commission v Mauer-Swisse Securities Limited, I respectfully beg to differ. It is not necessary in this case to consider the balance of his Honour's summary of the principles applicable to the exercise of jurisdiction under s 1324, set out in paragraph [36] of his Honour's reasons in that case. Conclusion 44 For these reasons, I order that the interlocutory process filed on 21 July 2006 be dismissed.

45 I order that the interlocutory process be dismissed with costs.

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Trade Practices Act 1974(Cth)

At a glance

Court

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Judgment (26 paragraphs)

Parties

Legislation Cited (3)

Cases Cited (5)

Cited By (5)