Australian Securities and Investments Commission, in the matter of Golden Financial Group Pty Ltd (formerly NSG Services Pty Ltd) v Golden Financial Group Pty Ltd

1. The defendant pay a pecuniary penalty to the Commonwealth in the amount of $250,000 in respect of the contraventions of s 961K(2) of the Corporations Act 2001 (Cth) set out in the declarations made on 30 March 2017.
2. The defendant pay a pecuniary penalty to the Commonwealth in the amount of $750,000 in respect of the contraventions of s 961L of the Corporations Act 2001 (Cth) set out in the declarations made on 30 March 2017.
3. The defendant pay the plaintiff's costs of the proceeding.
4. The amount of costs payable pursuant to paragraph 3 of these orders, and paragraph 7 of the orders made on 28 June 2017, be fixed in the amount of $50,000. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Introduction 1 The defendant, Golden Financial Group Pty Ltd (formerly NSG Services Pty Ltd) (NSG), provides financial services advice and holds an Australian Financial Services Licence permitting it to advise retail clients about and deal in life risk insurance and superannuation products. 2 On 30 March 2017, I made declarations that NSG had contravened ss 961K(2) and 961L of the Corporations Act 2001 (Cth) (the Act). 3 Those declarations were made following agreement being reached between the parties as to the liability of NSG and a hearing at which submissions were made as to whether it was appropriate to make declarations of contravention proposed jointly by the parties. In my reasons for judgment in relation to liability, I explained why I considered it appropriate to make the declarations proposed by the parties: Australian Securities and Investments Commission, in the matter of NSG Services Pty Ltd v NSG Services Pty Ltd [2017] FCA 345 (the Liability Reasons). These reasons should be read together with the Liability Reasons. I adopt the abbreviations used in the Liability Reasons unless otherwise indicated. 4 By its originating application in this proceeding, the Australian Securities and Investments Commission (ASIC) sought the imposition of pecuniary penalties pursuant to s 1317G(1E) of the Act and its costs of the proceeding. At the time of the hearing on liability, no agreement had been reached between the parties in relation to these matters. A timetable was set down for the filing of evidence and submissions in preparation for a contested hearing on these issues. Subsequently, the hearing needed to be adjourned. The hearing was re-listed to take place yesterday. 5 Shortly before the hearing was due to commence, the parties reached an agreed position on proposed pecuniary penalties and costs. The matter was stood down for a short time to enable the parties to finalise the evidentiary material that would be tendered by the parties and the submissions that would be presented in support of the proposed pecuniary penalties. The hearing re-commenced at 2.15 pm yesterday and concluded yesterday afternoon. 6 The parties propose that the Court make orders to the effect that: (a) NSG pay a pecuniary penalty to the Commonwealth in the amount of $1 million in respect of the contraventions of ss 961K(2) and 961L; (b) NSG pay ASIC's costs of the proceeding; and (c) the amount of costs payable pursuant to (b) and pursuant to paragraph 7 of the orders made on 28 June 2017 be fixed in the amount of $50,000. 7 In the course of oral submissions, there was discussion as to whether it would be more appropriate for there to be separate penalty amounts referable to the s 961K(2) contraventions and the s 961L contraventions. The parties in effect submitted that this was a matter for the Court to determine, and that either course was open and appropriate. In the event that the Court considered that it was preferable to order separate amounts for the s 961K(2) contraventions and the s 961L contraventions, senior counsel for ASIC submitted that it would be appropriate for approximately one-quarter of the total proposed penalty to be imposed for the s 961K(2) contraventions and approximately three-quarters for the s 961L contraventions. Senior counsel for NSG indicated that NSG did not oppose that approach. 8 In the course of oral submissions, the parties also indicated that they had reached agreement as to a payment plan whereby the pecuniary penalty would be paid in instalments over a two year period. In light of this arrangement, both parties submitted that I did not need to concern myself with 'capacity to pay' as a factor in considering the appropriateness of the proposed pecuniary penalty. Neither party sought to have the details of this arrangement included in the orders. 9 For the reasons that follow, I consider it appropriate for there to be separate pecuniary penalties ordered in respect of the s 961K(2) contraventions and the s 961L contraventions. As explained above, the parties have in effect proposed that the penalties for these groups of contraventions be $250,000 and $750,000 respectively. I consider these proposed penalties to be within the appropriate range for the contraventions. Accordingly, I will make orders to the effect that NSG pay a pecuniary penalty of $250,000 in respect of the s 961K(2) contraventions and $750,000 in respect of the s 961L contraventions. I will also make the agreed costs orders.