The bank statements of Moon Corporation account [xxx-yyy] [xx-yyy-xxxx] for the period 1 June 08 - Current date. "
82 The evidence of Mr Brennan, and of Mr Chambers, was that amongst documents produced to ASIC in early September 2009 was a transfer request dated 29 February 2008 relating to a transfer of $500,000 from an account of TZ Limited to Moon Corporation Pty Ltd. ASIC was seeking information in relation to financial dealings between Mr Sigalla, a Mr Reynolds, and Moon Corporation. Mr Brennan deposed that he was asked to issue the notice by another of the "team members" on the investigation, but he did not recall the reason as to why the documents were sought. He did however make the general observation that his role was to trace funds and this led to the issue of the s 33 notices.
83 It also appears from para 48 of Mr Brennan's affidavit that the notice was given as it was thought it might be relevant to how Mr Sigalla may have disposed of funds allegedly misappropriated from TZ Limited.
84 This notice is valid. It squarely relates to investigations of the conduct of persons including Mr Sigalla as directors of TZ Limited. The notice stated the suspected contraventions. There is no reason to exclude under s 138 of the evidence of Ms Haidar of the National Australia Bank who produced documents pursuant to the notice.
85 The next notice was also dated 24 September 2009 and was addressed to St George Bank Limited. The text of the matters to which the production of documents related was the same as the notice issued by Mr Brennan to National Australia Bank. The notice was also issued under s 33. It is unnecessary to set out the description of the documents sought. This notice was also issued as part of an attempted tracing exercise in respect of funds suspected to have been misappropriated. An additional reason for ASIC issuing the notice was that one of the investigators, a Ms Catherine York, thought that Mr Sigalla was a flight risk. She wished to establish if any money had been used to purchase airfares. Whilst that concern was outside the suspected contraventions of Mr Sigalla of his duties as a director, for reasons stated below, the notice was not invalid because it did not state that concern as a matter to which the request for production of documents related.
86 There is no reason to exclude pursuant to s 138 the evidence of Ms McGuiness, an officer of St George Bank, who produced documents as a result of the issue of the notice.
87 The next notice also dated 24 September 2009 was in the same form and also addressed to St George Bank Limited. It is in the same category as the preceding notice.
88 The next notice was issued by Mr Marks for ASIC on 25 September 2009 and was addressed to Starwood Pacific Hotels Pty Limited. The prefatory wording stating the matter to which the request for documents related was in the same terms as the first notice of 1 September 2009 addressed to Starwood Pacific Hotels Pty Limited referred to above. Mr Marks deposed that he was informed by other officers of ASIC that during a s 19 examination on 24 September 2009 Mr Sigalla had made contradictory statements regarding the whereabouts of a laptop computer believed to be in his possession. Mr Marks suspected that Mr Sigalla might have made false statements during his s 19 examination and might be in possession of the laptop which contained material relating to TZ Limited which could further ASIC's investigation. The notice required Starwood Pacific Hotels to provide the name and contact details of the cleaners of the room in which Mr Sigalla was staying, a description and registration number of a motor vehicle associated with his accommodation and a schedule of telephone calls. In relation to the motor vehicle, Mr Marks suspected that if Mr Sigalla were in possession of a laptop, it might be kept in a motor vehicle. In seeking details of telephone calls he hoped to identify banking institutions, or persons associated with banking institutions, with whom Mr Sigalla might have been in contact as part of the investigation into the flow of funds. This was all part and parcel of the investigation described in the notice.
89 The notice of 25 September 2009 issued by Mr Marks was partly issued for the purpose of investigating whether Mr Sigalla had given false information in his s 19 examination the previous day. There was no issue that ASIC had reason to suspect that he had done so and that it did so suspect. It thus suspected facts that could amount to a contravention of s 64 of the ASIC Act.
90 The notice of 25 September 2009 addressed to Starwood Pacific Hotels Pty Limited was not invalid because it did not state that it was issued partly for the purpose of investigating whether Mr Sigalla had provided false information at his examination, or did not state that it was issued in connection with an investigation into a suspected contravention of s 64 of the ASIC Act. It would place an impossible burden on ASIC to describe with particularity all of the possible purposes to which a request for production of documents relates. Inevitably an investigation can expand as it proceeds. There is no reason that documents produced or information obtained at one stage of the investigation can only be used for the investigation of the particular contravention that ASIC has reason to suspect at the time a notice is issued. That is partly because, in my view, the scope of the investigation is not limited to the investigation of such particular suspected contraventions. But in any event, ASIC is entitled to use information gathered by it in an investigation for the performance of any of its functions (Johns v Australian Securities Commission (1992) 178 CLR 408 at 425).
91 Moreover, the suspicion that Mr Sigalla had given false information at his examination was not outside the described matter to which the request for documents related. It was still part of the investigation of Mr Sigalla's and others' conduct as directors of TZ Limited. I conclude that the notice to Mr Fraser given under s 19(2)(a) on 25 September 2009 was valid.
92 Further notices were given to Starwood Pacific Hotels Pty Limited on 2 and 9 October 2009 pursuant to ss 19(2)(a) and 30. The same considerations apply to the notice of 2 October 2009 as to the notice of 25 September 2009. The same issues arise in relation to the notice of 9 October 2009 as arose in relation to the notice of 1 September 2009. Both those notices were valid.
93 On 12 October 2009 Mr Brennan issued a notice to American Express Australia Limited requiring the production of the American Express statement of account in the name of Mr Sigalla for the period 1 August 2009 to the date of the notice, and all trace documents for all payments crediting the account for the period from 1 August 2009 to that date. The description of the matter to which the request for documents related was the same as all other notices issued by Mr Brennan, an example of which is quoted at para [81] above. ASIC had a dual purpose in issuing that notice. One of its purposes was to seek to identify sources of funds available to Mr Sigalla and thereby investigate the allegation of misappropriation of funds from TZ Limited. That purpose squarely fell within the description of the matter to which the request for production of documents related. A further purpose of identifying sources of funds available to Mr Sigalla was to identify assets that might be available to meet any compensation claim that might be made arising from the conduct of the investigation and also to assist in ensuring compliance with the restraining orders. It does not appear that this last purpose was a significant purpose in relation to the notice issued on 12 October 2009. Neither Mr Brennan nor Mr Chambers gave specific evidence about that notice from which it might be concluded that a material purpose of the notice was to investigate whether there had been a breach of the restraining orders. It was not put to them in cross-examination that that was their purpose in relation to this notice. The notice of 12 October 2009 to American Express was valid. There is no reason to reject pursuant to s 138 of the Evidence Act evidence obtained from American Express as a result of the notice.
94 Also on 13 October 2009 Mr Brennan issued a notice under s 22 to the National Australia Bank. It sought production of bank statements for an account of Moon Corporation, trace documents in relation to a deposit of $300,000 into the Moon Corporation account and authorities to action the account. This notice was issued for multiple purposes. Partly it was issued for the same purpose as the earlier notice to the National Australia Bank of 24 September 2009. In part it was to investigate a suspected contravention of s 1323(9) by Mr Sigalla. The suspected contravention was of an order of Bergin CJ in Eq restraining Mr Sigalla from dealing with his assets wherever situated. I infer that one of the purposes in seeking the trace documents in relation to the deposit of $300,000 into the account of Moon Corporation was to investigate whether that was a transfer of an asset of Mr Sigalla.
95 This last purpose was not stated in the notice. Unlike the suspected contravention of s 64 of the ASIC Act in relation to the possible giving of false information in an examination, which is part and parcel of the investigation referred to in the notice to Starwood Pacific Hotels Pty Limited, the purpose of investigating a suspected contravention of the restraining orders was a discrete purpose and was a separate matter to which the request for production of documents related. The question is whether the failure to state that matter in the notice renders the notice invalid. If there was substantial compliance with the requirements of reg 5, then the requirements of the regulation would have been complied with and no question of validity arises. If there was not substantial compliance with the requirements of the regulation, it is a separate question whether the notice is on that account invalid (Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [91]-[93]).
96 The purpose of a requirement that the notice state the matter to which the request for production of documents relates is that a recipient be able to see whether ASIC has power to make the demand. Where a request for production of documents relates to two matters in respect of each of which ASIC has power to issue the notice, the omission of a statement of one of those matters does not mean that the regulation was not substantially complied with. The reason for this is that the purpose of the requirement to state the matter to which the request for production relates is satisfied where the recipient can see that the notice is within power, even if there would be additional grounds to justify the exercise of the power which were not stated. If I am wrong in this conclusion, and if the omission of the statement that the request for documents related also to a suspected contravention by Mr Sigalla of s 1323(9) of the Corporations Act means that the requirements of reg 5 were not substantially complied with, nonetheless, for the same reasons, the non-compliance with reg 5 would not mean that the notice was invalid. I conclude that the notice dated 13 October 2009 addressed to the National Australia Bank is valid. No question arises under s 138 of the Evidence Act.
97 If I am wrong in this conclusion I would not exclude the evidence pursuant to s 138. The documents produced pursuant to the notice have high probative value. The charge to which the documents relate is serious. Any impropriety or contravention of an Australian law was not grave, deliberate or reckless. Whilst the issue of the notice (if invalid) would presumably infringe the right recognised by Article 17 of the International Covenant on Civil and Political Rights to protection against unlawful interference with privacy, and the same information could not have been obtained lawfully, the balance of factors would not favour exclusion of the evidence, particularly having regard to the seriousness of the charge.
98 The next notice was issued pursuant to s 33 of the ASIC Act by Mr Marks on 21 October 2009 and was addressed to Mr Ian Chandler. It sought production of books evidencing moneys paid by Mr Sigalla, BZI Pty Limited or ZMS Investments Pty Limited to Mr Chandler, or to Premier Models or to Elite Escorts. The matter for which the request for documents related was said to be:
" In relation to an investigation pursuant to Division 1 of Part 3 of the Australian Securities and Investments Commission Act 2001 of suspected contraventions by former directors of TZ Limited (ACN 073 979 272) (' TZ Limited ') of Sections 180, 181, 182, 184, 208, 259A, 260A, 590, 596, 1041A to 1041C, 1041E, 1041F and 1308 of the Corporations Act 2001 (Cth), and Sections 173, 176A and 178BA of the Crimes Act 1900 (NSW) between 1 April 2004 and 18 June 2009 ... "
99 This notice was also issued for a dual purpose. Part of the reason was to establish whether Mr Sigalla had incurred charges for the services of female models or escorts using Premier Models, a business associated with Mr Chandler, thereby allegedly breaching orders made under s 1323(1) of the Corporations Act. That suspected contravention of s 1323(9) of the Corporations Act was not stated in the notice. Mr Marks deposed that the notice was also given to seek to establish whether there were other sources of funds available to Mr Sigalla not yet known to ASIC's investigators with a view to endeavouring to trace funds allegedly misappropriated from TZ Limited. Mr Marks explained that if such services were paid for by credit card then the identification of another credit card might lead to another source of funds that had not yet been identified. I accept that evidence. I accept therefore that the notice was given in relation to the investigation described in the notice of suspected contraventions by former directors of TZ Limited of provisions of the Corporations Act and the Crimes Act 1900 (NSW). The notice was also given in relation to the investigation of suspected contraventions of s 1323(9). For the same reasons as I gave in respect of the notice to the National Australian Bank of 13 October 2009, I consider that reg 5 was substantially complied with, but even if it were not, the notice would not on that account be invalid.
100 A notice issued by Mr Marks dated 21 October 2009 addressed to the Director, Executive Services (Sydney) Pty Ltd is in the same position as the notice of 21 October 2009 addressed to Mr Chandler.
Invalidity of Notices Which Did Not Truly State the Matters to Which the Request for Production of Documents Related
101 The next notice is dated 26 October 2009 and was addressed to American Express Australia Limited. It was given by Mr Brennan and is in the same form as the other notices given by him. It is set out at para [12] above. This notice was given for the purpose only of investigating a suspected contravention of the orders made under s 1323(1). It was not given to investigate suspected contraventions by the directors of TZ Limited in the period from 1 April 2004 to 18 June 2009, or to seek to identify sources of funds available to Mr Sigalla with a view to tracing funds allegedly misappropriated from TZ Limited, or to identifying sources of funds which could be available to meet compensation claims arising out of suspected contraventions by the former directors of their duties.
102 Different questions arise in the case of this and similar notices because the statement of the matters to which the request for production of documents related was not correct. In one sense the notice was correct. The request for production of documents did relate to the investigation into the conduct of Mr Sigalla and others as directors of TZ Limited up to 18 June 2009, in that that investigation gave rise to the application for orders under s 1323 of the Corporations Act and the investigation was then widened into an investigation of suspected contraventions of the orders made under s 1323. However, the request did not relate to an investigation of the scope described, and was not relevant to the part of the investigation that was described. Thus reg 5 was not complied with because the notice did not truly state the matter to which the request for the production of documents related.
103 ASIC was empowered to issue a notice for the documents because it was entitled to exercise the power under s 33 for the purpose of investigating the suspected contravention of s 1323(9). But it did not comply with the prescription as to the manner in which the power was to be exercised. The question is whether it was a purpose of the legislation that a notice given in breach of reg 5 should be invalid. In determining that question regard is to be had to the language of the relevant provisions and the scope and object of the statute (Project Blue Sky Inc v Australian Broadcasting Authority at [93]). Not every breach of reg 5 would necessarily entail invalidity. In my view the question of validity depends upon whether the breach of reg 5 would frustrate the purpose of the requirement that the notice state the matter to which the request for production relates, that is, by preventing the recipient being in a position to assess whether the notice was within power. This is the essential test for the validity of a notice advanced in MacDonald v Australian Securities Commission. For the notice to state incorrectly the matter to which the request for production of documents related was to deprive the recipient of that opportunity. There is an apparent opportunity to assess whether the notice is within power, but the opportunity is not real because the matter was not stated correctly. In my view the breach of reg 5 where the matter stated was simply incorrect rendered the notice invalid.
104 Mr Stack for ASIC referred to Clifford Corporation Ltd v ASIC (1998) 30 ACSR 130 where a notice issued pursuant to s 30 of the Australian Securities Commission Law stated in its "preamble" that it was issued in respect of a suspected contravention of s 1001A of the Corporations Law (that is a section which required a listed disclosing entity to comply with listing rules) but did not identify the listing rules said to have been contravened. In holding that the notice was valid, Lindgren J said (at 136):
" ... such a failure of a preamble in a notice under s 30 of the ASC Law to identify the alleged or suspected contravention or contraventions of a national scheme law would not spell invalidity for the notice. The relevant inquiry is whether the Commission had in fact exercised the power to give the notice in relation to an alleged or suspected contravention of a national scheme law of the jurisdiction in question. A failure of the preamble to identify the contravention might at most be some evidence relevant to that factual issue. "
105 Lindgren J did not consider whether reg 5 had been complied with and, if not, what was the effect of non-compliance with the regulation. His Honour's conclusion demonstrates that the preamble to a notice does not need to particularise every alleged or suspected contravention being investigated. This accords with the Australian Securities Commission v Graco (1991) 29 FCR 491 where Jenkinson J said that the requirement in s 19(3) that a notice under the section state the "general nature of the matter" that the Commission is investigating "invites both comprehensiveness and brevity in description of the matter, and gives no encouragement to definition or particularity" (at 495).
106 I conclude that the notice of 26 October 2009 (document 9 in exhibit 1) was invalid. There are other notices to which the same reasoning applies, that is, where the notice gives an wholly incorrect description of the matter to which the request for production of documents related. One such document is a notice dated 3 November 2009 signed by Mr Brennan and issued to St George Bank Limited (document 9D in exhibit 1). This notice sought trace details of the withdrawal of two sums of $20,000 from an account in the name of ZMS Investments. Those documents are relevant to charges 43 and 44 in relation to the alleged contempts in causing a sum of $52,500 to be paid for school fees when, so it is alleged, the fees had been paid before ASIC consented to the making of a payment for school fees on 9 September 2009.
107 Other notices in the same category are a notice issued by Mr Brennan dated 1 December 2009 to St George Bank Limited (document 11 in exhibit 1), a notice dated 9 December 2009 issued by Mr Brennan to the National Australia Bank (document 15A in exhibit 1), a notice dated 14 December 2009 issued by Mr Brennan to St George Bank Limited (document 18 in exhibit 1), a notice dated 29 January 2010 issued by Mr Brennan to American Express Limited (document 19 in exhibit 1), a notice dated 5 February 2010 issued by Mr Brennan to Tabcorp Limited (document 22 in exhibit 1), a notice dated 10 February 2010 issued by Mr Brennan to St. George Bank Limited (document 26 in exhibit 1), and a notice dated 12 February 2010 issued by Mr Brennan to the Commonwealth Bank of Australia (document 28A in exhibit 1).
108 A notice issued by Mr Marks to Mr Chandler of Executive Services (Sydney) Pty Ltd dated 5 November 2009 was issued partly for the purpose of establishing whether Mr Sigalla was in breach of court orders. This purpose was not stated in the notice. The notice also stated that it was issued "in relation to books produced pursuant to s 30 of the ASIC Act into the possession of ASIC on 22 October 2009, in response to a Notice given to the Company on 21 October 2009". The notice sought an explanation of matters relating to the compilation of the books and matters to which the books related. Mr Marks deposed that the notice was given to clarify the nature of the EFTPOS merchant receipts provided to ASIC by Mr Chandler on 22 October 2009 in order to establish if Mr Sigalla was in breach of court orders. I have upheld the validity of the notice of 21 October 2009. One of the purposes of the notice issued under s 33 on 5 November 2009 was truly stated in the notice, namely to provide an explanation in relation to the books produced on 22 October 2009. That is a sufficient description of the matter to which the request for production related. The notice of 5 November 2009 is also valid.
109 As appears below, a notice issued by Mr Brennan to St George Bank Limited dated 28 October 2009 called for two discrete categories of documents. For reasons below it is partially invalid.
110 The remaining notices are valid for the reasons previously given. In many cases they identify as one of the matters to which the request for production of documents relates to the investigation into suspected contraventions of ss 63, 64 and 67 of the ASIC Act and subs 1323(9) of the Corporations Act. In others, the documents are sought for a purpose including investigation into a suspected contravention of subs 1323(9) of the Corporations Act which was a purpose not stated, but also for a purpose which was stated in the notice. For the same reasons as given in respect of the notices at paras [95] and [96] above, I conclude that such notices were valid.
Exclusion of Evidence Obtained Pursuant to Invalid Notices under s 138
111 All of the notices I have concluded are invalid were issued by Mr Brennan. They were all issued pursuant to s 33 of the ASIC Act. Mr Brennan deposed that it was his usual process when issuing a s 33 notice to refer to the contraventions listed in the s 13 file note and place those contraventions as set out in the file note into the body of the s 33 notice that was to be issued. He was given a draft of a s 13 file note on 14 August 2009 when he started working on the investigation. He used that draft in all subsequent file notes, notwithstanding that from 23 August 2009 the focus of his investigation shifted to an investigation into suspected contraventions of the orders made under s 1323. Mr Brennan received the completed s 13 file note on or soon after 14 August 2009. He received the amended and extended s 13 file note on 16 November 2009. Mr Brennan acknowledged that in using the outdated draft file note as the source of the statement to be included in the notices issued under s 33, he was departing from correct procedures. He said that this was a mistake but would not give a responsive answer when asked whether he accepted that he was acting carelessly in issuing the notices in that way. Mr Brennan was a senior financial investigator with a background in accounting. He issued the notices without supervision and without consulting with anyone as to the form of the notices to be issued.