ASIC's tender of the Marco 2020 and the December 2018 affidavits
22 In response to the defendants' objection to the tender of these affidavits, ASIC specified, in its further submissions, the discrete paragraphs of each affidavit that it seeks to tender. The Marco 2020 affidavit was filed in this interlocutory proceeding but not read into evidence by the defendants. The Marco December 2018 affidavit was read by the defendants in a separate interlocutory proceeding for a variation of the freezing orders which was heard on 8 February 2019. ASIC raises three bases on which it says various paragraphs from both affidavits should be admitted:
(a) as admissions under s 81 of the Evidence Act;
(b) as an exception to the hearsay rule because the present application has an interlocutory character: s 75 of the Evidence Act; and
(c) as 'evidence of a risk or possibility giving rise to a protective order' relying on observations of French J (as his Honour then was) in Australian Securities and Investments Commission v Carey (No 3) (2006) 232 ALR 577 (at [31]).
Section 81(1) of the Evidence Act provides that the hearsay rule does not apply to evidence of an admission. The term 'admission' is defined in the dictionary to the Evidence Act as meaning a previous statement that is made by a person who is or becomes a party to a proceeding, including a defendant to a criminal proceeding, and is adverse to the person's interest in the outcome of the proceeding. A previous representation, in turn, is also defined as being a representation made otherwise than in the course of giving evidence in the proceeding in which the evidence of the representation is sought to be adduced.
23 Mr Marco submits that the Marco 2020 affidavit was clearly filed in opposition to the current interlocutory application and therefore cannot be used for the purposes of the admission exception to the hearsay rule under s 81 of the Evidence Act. Mr Marco says a previous representation cannot come from a statement or document filed in the very proceedings in which it is sought to be used under s 81, and relies on the reasoning in Hoy Mobile Pty Ltd v Allphones Retail Pty Ltd (2008) 167 FCR 314 (at [27] to [33]) where Rares J said:
27 I am of opinion that the proper construction of the definition of 'previous representation' in the Act requires that the expression 'in the course of giving evidence in the proceeding in which evidence of the representation is sought to be adduced' be treated as a reference to the hearing before the judge, as defined, in which the evidence is sought to be adduced. It does not extend to other hearings or phases, including any interlocutory proceeding, in which the parties have been engaged prior to that hearing. Of course, if a matter is part heard, on the resumption of hearing it is the same proceeding for the purposes of the definition of 'previous representation'. But where one can readily segregate the interlocutory or other phases of a matter from the trial, proceeding or phase in which the evidence is sought to be adduced, I am of opinion that a representation made before the current hearing is capable of being a previous representation within the meaning of that term in the Act.
28 Allphones also argued that the word 'proceeding' in the Evidence Act should be given the extended meaning for which it contended by reference to the use of the same term in the Federal Court of Australia Act 1976. There s 4 defines 'proceeding' as:
'Proceeding means a proceeding in a court, whether between parties or not, and includes an incidental proceeding in the course of, or in connection with, a proceeding, and also includes an appeal.'
29 The long title of the Evidence Act is 'An Act About the Law of Evidence and for Related Purposes'. That Act identifies the courts and proceedings to which it is to apply in s 4. Expressions in the Evidence Act such as 'proceeding' cannot take their character from that same word used in a different Act, such as the Federal Court of Australia Act. The process of statutory construction requires the Court to have regard to the way in which the Parliament expressed itself with respect to the subject matter with which it is then dealing. The Evidence Act is intended to apply its series of provisions to the conduct of proceedings in a federal court (as defined) in which evidence is sought to be given.
30 Like the Judiciary Act 1903, the Evidence Act takes the courts to which it applies as it finds them. The Evidence Act deals with incidents of a proceeding which it characterises as such. The statutory regime which the Evidence Act itself provides, of course, does not create any civil or criminal proceeding. Rather, it applies the rules of evidence which it lays down for the conduct of civil or criminal proceedings to proceedings of the relevant character when and how they are constituted under other legislation.
31 I am of opinion that the definition of 'proceeding' in the Federal Court of Australia Act does not affect the construction of 'proceeding' as that term is used in the Evidence Act. I am fortified in this view by the recognition that the Evidence Act itself is procedural in substance. It regulates how evidence is to be received and what is admissible. It does not itself create rights or liabilities. That is why the Act is careful to distinguish between various proceedings and to provide rules for the adducing of evidence in them. In Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Limited [2003] HCA 49; (2003) 216 CLR 161 at 200 [122] and 205 [133] Hayne J (with whom Gleeson CJ and McHugh J agreed) said that the rules governing the admissibility of evidence fall under the expression 'practice and procedure'. Gummow J, with whom Kirby J agreed on this point, said that more substantive rights were involved: Labrador 216 CLR at 173 [33]. Kirby J referred to the assignment of the burden and identification of a standard of proof as being matters which can be of critical importance to the conduct of a trial. They could thereby partake of certain features of practice and procedure, but he also recognised that each was arguably something more than that because each affected, in a way, the very character of the trial. In that case the provisions of the Excise Act 1901 dealt with how matters might be proved: Labrador 216 CLR at 185 [76].
32 Essentially, whether or not a previous representation amounts to an admission is a question of the law of evidence. That question has the character of a matter of practice or procedure. The Evidence Act regulates the way in which a proceeding is conducted. Of course, the Act applies a particular standard of proof depending on whether the proceedings are civil or criminal and in that way the application of the Act may affect substantive rights. But the substantive operation of the Act applies the practice and procedure apposite to regulate the adducing of evidence on each occasion on which it is tendered. The Act does not create any proceeding in a court. Rather, it provides a procedure to apply to or in an existing cause of action or matter for adducing evidence.
33 Proof of what occurred before Tamberlin J is capable of establishing a fact that occurred on an occasion outside this trial. The interlocutory proceeding was not this trial of the issues between the parties. For these reasons, I am of opinion that what occurred before Tamberlin J did not occur in the course of giving evidence in the proceeding in which it is now sought to tender Mr Lloyd's affidavit. It follows that Mr Lloyd's affidavit is capable of being a previous representation and thus capable of falling within the meaning of 'admission' as a matter of law.
24 In my view, the contention for Mr Marco is correct and the paragraphs of the Marco 2020 affidavit cannot be tendered by ASIC as admissions.
25 As to the Marco December 2018 affidavit, the facts in Hoy Mobile are procedurally very similar. In that case, a solicitor acting for the respondent had sworn an affidavit which was relied upon to support an assertion of legal professional privilege over certain documents at an earlier interlocutory stage of the matter, the tender of which as admissions was pressed by the applicant at trial. In this case, Mr Marco has sworn an affidavit and relied upon it in support of an earlier interlocutory proceeding, the tender of which is now pressed by ASIC as admissions in the present interlocutory proceeding. For the same reasons that the Marco 2020 affidavit cannot be tendered, by reference to Rares J's reasons set out in the paragraph above, I am satisfied that the Marco December 2018 affidavit is a previous representation for the purpose of s 81 of the Evidence Act.
26 ASIC seeks to tender seven paragraphs and annexure CM-36 from the Marco December 2018 affidavit in total. Annexure CM-36 is a pro forma version of the 'Declaration of Trust' document that Mr Marco executed with investors. The defendants do not oppose its tender. The defendants' opposition to the tender of the paragraphs is that ASIC has failed to demonstrate that each paragraph is in fact an admission. Rather, the defendants point out that ASIC qualifies its reasoning in relation to most of the paragraphs by stating that they must be read together with other evidence or 'the totality of the evidence.' The exception is [23] of the affidavit which is in the following terms:
In conducting my business as a private investor, I have always followed Mr Laqueri's advice. However, my current lawyers have advised me that some points of Mr Laqueri's advice are not correct. Relevantly, my current lawyers have advised me that:
(a) if I wish to pool my clients' funds and invest those funds as I see fit, without interference from my clients in my investment strategy, then it is no appropriate for me to hold those funds on trust for my clients and, accordingly, it is not appropriate for me to be entering into declarations of trust in respect of my clients' funds;
(b) even though I am not providing any form of financial advice, by investing in my clients' funds with the intention of generating a financial return for my clients, I am dealing in a financial product and therefore providing a financial service and, accordingly, I am required to hold an [AFSL].
As will be made clear by ASIC's own evidence set out below, I am satisfied that [23] is a previous representation that is adverse to the defendants' interests which can therefore be tendered as an admission in this proceeding. I have not had regard to the other paragraphs.
27 But even if this were wrong, as will be seen, the failure to hold an AFSL is clearly established on ASIC's own evidence.
28 As to the other grounds on which ASIC seeks the tender of the Marco 2020 affidavit and the remaining paragraphs of the Marco 2018 affidavit, the first being reliance on s 75 of the Evidence Act, the general proposition is that (speaking very broadly), in an interlocutory proceeding the hearsay rule will not apply to evidence if the party who adduces it also adduces evidence of its source. Mr Marco submits that the paragraphs which are relied upon by ASIC are not supported by a statement setting out the source of Mr Marco's information and belief as required by s 75. This may seem a curious submission coming, as it does, from Mr Marco, but nonetheless, I am certainly not satisfied that those statements relied upon under the hearsay rule are reliable for the purposes of this interlocutory application. The statements are of a very general nature.
29 In relation to the risk referred to by French J in Carey (No 3) (at [31]), I also consider that this ground is inapplicable. ASIC contends that by tendering the relevant paragraphs and the introductory wording and jurat in Mr Marco's affidavit, they have adduced the source of the relevant hearsay evidence. However, the introductory paragraph states that:
The information in this affidavit, save where expressly stated to the contrary, is within my own personal knowledge and belief. In the case of facts obtained from sources identified herein, those facts are true to the best of my knowledge, information and belief.
30 The paragraphs relied upon by ASIC, which are hearsay, do not identify the sources and cannot be accepted as hearsay evidence within the meaning of s 75 of the Evidence Act.
31 To the extent ASIC relies upon Carey (No 3), French J was addressing the issue of the appointment of receivers under s 1323 of the CA after an interim order had already been made by Siopis J (see [16]-[19]). French J needed to assess whether there was a risk of the assets being dissipated. His Honour determined (at [33]) that opinion evidence and hearsay evidence provided by ASIC's witnesses on affidavit as to the defendant's financial position in operation in their businesses would be receivable if it was supported by reference to the relevant documents and factual material. I am not satisfied that the content on which ASIC seeks to rely is content adequately supported by reference to relevant documentation and factual material.
32 More importantly, there is a protective order already made in this instance pursuant to s 1323 of the CA and, unless there is clear evidence of breach of that order (and I note that some passing reference to potential breaches having been made, but with no specific clarity), no evidence is before me as to the risk of assets being dissipated.
33 Although documents attached to the affidavits might be sought to be relied upon by way of business records as defined in s 69(1) of the Evidence Act, again, I do not consider that those documents satisfied this description. All but one of the documents were prepared by Mr Marco and his solicitors for the purposes of this litigation. As such, they fall expressly within the specific exception covered by s 69(3) of the Evidence Act.
34 It may be that ASIC has been taken by surprise by Mr Marco choosing not to read or rely upon his extensive 2020 affidavit. But, of course, the mere filing of an affidavit does not mean it will be relied upon in evidence and doubtless a well-reasoned forensic choice was made not to rely upon it in opposition to the relief ASIC seeks. If there are gaps in ASIC's case (and in any event as will be apparent, I consider there are not), they cannot be filled by material which is not properly in evidence.
35 ASIC has also sought to tender documents received in response to a subpoena issued to Westpac under a notice to produce served on Mr Marco. Mr Marco says that there is nothing in those documents which is relevant to the issues before the Court. I am not satisfied that this material is particularly relevant, but I also do not consider it to add much to the already extensive evidence before me. As will be noted later in these reasons, my conclusions have been reached without regard to this material.
36 I turn then to the material which is clearly in evidence. The first of which is Lim 1, in which Ms Lim, a solicitor with ASIC's Enforcement Western Australia team, explains her involvement in the conduct of investigations into suspected contraventions of the CA by the defendants. Ms Lim notes that freezing orders were made against the defendants on 1 November 2018 pursuant to s 1323 of the CA (see ASIC v Marco No 1 at [1]-[12] and generally). From time to time those orders have been varied on application by the defendants or by consent of the parties. She outlines the basis upon which ASIC has formed the view that defendants have contravened s 911A of the CA in that they:
(a) have in the past, and continue, to deal in financial products within the meaning of the CA;
(b) have in the past, and continue, to operate a financial services business;
(c) do not, and never have, held an AFSL.
37 ASIC has also formed the view that the defendants have contravened s 601ED(5) of the CA, in that:
(a) the defendants have in the past continued to operate an unregistered Managed Investments Scheme;
(b) the Scheme is an unregistered managed investments scheme with more than 20 members pursuant to which Mr Marco has raised more than $2 million in a 12 month period from the issue of financial products and the number of investors to whom those financial products have been sold in a 12 month period has exceeded 20 and the Scheme should therefore be registered; and
(c) the Scheme is not registered and no steps have ever been taken to register the Scheme.
38 Ms Lim expresses that ASIC is of the view, which I treat as submission, that an interim receiver should be appointed to the assets held by the defendants as:
(a) the role of the interim receivers will be protective in nature to manage the assets of the defendants, to secure and protect the assets of the defendants, to identify any assets that may be available to persons who may advance money to the defendants for investment (investors), to act for the benefit of investors and to act in their interests and to provide a report to the Court;
(b) it will bring an end to ongoing conduct that breaches the CA, being the defendants' continued dealing in financial products, the defendants continued operation of its financial services business without an AFSL and have continued operation of the Scheme without registration;
(c) it will ensure proper oversight over moneys advanced by the investors to the defendants and the assets of the defendants that could be available to meet the claims of investors in that only proper expenditure would be paid out of investment moneys and investment moneys would not be depleted by the defendants in incurring business and personal expenses with no plausible benefits or expected return. Further, the Court would not be constantly approached to determine what personal operating expenses of the defendants above and beyond the permitted freezing order exemptions should be paid for from investment moneys and the expenses of AMS and AMS Trust. Instead, all assets would be properly accounted for, as would the books and records of the Scheme so as to ascertain the true entitlements of the investors;
(d) it will facilitate the identification of assets held by third parties and related parties that have been acquired with investment moneys and enable all necessary steps to be taken to preserve those assets pending the determination of the substantive relief sought in the proposed amended originating process;
(e) it would ensure the status quo is maintained and no new or additional investment moneys are advanced to the Scheme and no investments moneys are returned to investors pending the determination of the substantive relief sought in the proposed amended originating process; and
(f) it will ensure proper, truthful and accurate communications with investors.
39 Ms Lim expresses the view, again in the nature of a submission, that there is little risk to investors if an interim receiver is appointed to the assets of the defendants as:
(a) the investments by the defendants are unlikely to come to fruition and even if they did, the receiver would be able to appropriately deal with the moneys; and
(b) the proposed terms of the appointment of the receiver prevents the receiver from dissipating the assets of the defendants without the consent of the Court.
40 Much of what Ms Lim says is essentially assertion rather than evidence but to the extent that is so, I treat it only by way of submission. ASIC is also of the view that the Scheme should be wound up for reasons set out in Lim 1, but winding up is not sought in this interlocutory process. Rather, winding up as well as declaratory and injunctive orders form part of ASIC's claim for final relief in these proceedings. ASIC considers that AMS should ultimately be wound up for similar reasons.
41 Ms Lim explains in Lim 1 that on 6 December 2019, she directed an analyst employed by ASIC to conduct searches in relation to Mr Marco, being a personal name search, a business name search for Coastline Group (a business associated with Mr Marco), and an AFSL Register search. The results of those searches confirms that Mr Marco is not presently, and never has been, the holder of an AFSL. He is a director and shareholder of AMS and Coastline Group (WA) Pty Ltd (ACN 629 326 174). She produces company name searches of those companies and White and Yellow Pages searches for Coastline Group.
42 In respect of AMS, the searches reveal that its directors are Mr Marco and Mr Damon Marco (Mr Marco's son), that Mr Marco is the sole secretary of AMS and the sole shareholder of AMS (AMS is not and never has been the holder of an AFSL).
43 In relation to AMS Trust, Ms Lim produces a Trust Deed for AMS Trust that was obtained by the issuing of a notice to produce documents on Mr Marco on 1 November 2018 pursuant to s 33 of the Australian Securities and Investments Commission Act 2001 (Cth) (the ASIC Act).
44 The Trust Deed indicates that in 2013, AMS became the trustee of AMS Trust with Mr Marco, and failing him, Mrs Gaye Marco, as the appointor and guardian. Mr and Mrs Marco are the specified beneficiaries and Mr Marco's family members are general beneficiaries.
45 ASIC explains that investigations are proceeding in relation to numerous contraventions of provisions of the CA relating to Mr Marco, Coastline Group, AMS, Coastline Group WA, Ms Beverley Marco (Mr Marco's sister) and Mr Damon Marco. The scope of the investigation covers suspected contraventions in the period from January 2010 onwards. Ms Lim was appointed in April 2019 as the project manager for the civil aspects of the investigation, after another investigator ceased employment with ASIC. Two months later, Mr Kohler, an investigator appointed by ASIC, was appointed as the project manager for the criminal aspects of the investigation. With the assistance of other staff members of ASIC, Mr Kohler and Ms Lim have primary responsibility for the investigation. In that regard, during the course of the investigation, up until the date of Lim 1, compulsory examinations have been conducted of numerous persons, including Mr Marco, Ms Beverley Marco, Ms Talitha Marco (Mr Marco's daughter), Mr Damon Marco, Mr Rafiek Meyer, Mr Peter Caughey and Ms Linda Marissen. Transcripts of the examinations of Mr Marco, Mr Caughey and Ms Marissen are annexed to various affidavits read by ASIC with the exception that ASIC has expressly disavowed reliance on the transcript of Mr Marco's examination. In addition to those compulsory examinations, examinations of investors have been conducted pursuant to the reasonable assistance powers under s 19 of the ASIC Act. I do not consider it necessary to name those investors at this stage of the proceedings. There were six such investors as at 12 December 2019.
46 ASIC has also:
(a) conducted a voluntary interview of Mr Marco on 1 November 2018;
(b) issued notices for production of books and records under s 33 of the ASIC Act to several banks, several corporate entities and several individuals, including Mr Marco and a number of his family members as well as seven investors;
(c) issued notices for reasonable assistance under s 19 of the ASIC Act to some 38 investors; and
(d) issued a notice pursuant to s 33 of the ASIC Act for the production of electronic storage devices to Mr Marco on 1 November 2018;
In total, these enquiries had resulted in the issuing of 120 notices, which had produced 80,624 documents as at 12 December 2019 with more documents expected.
47 ASIC has then:
(a) reviewed the financial documents prepared by Mr Marco and undertaken financial analysis, including tracing of funds in respect of the identified bank accounts of Mr Marco, AMS, Mr Damon Marco and Ms Beverley Marco;
(b) engaged forensic accounts, KPMG, to undertake further detailed financial analysis in respect of the identified bank accounts of Mr Marco and AMS;
(c) undertaken an analysis of the investment programmes from which Mr Marco in the Disclosure affidavits deposed he expected to receive returns;
(d) identified investors potentially adversely affected by the conduct of Mr Marco and AMS;
(e) conducted voluntary interviews of nine other investors, who do not need to be named;
(f) contacted approximately 104 investors by telephone or email; and
(g) created and updated a webpage on the ASIC website specific to the investigation and set up a dedicated email address for investors to contact ASIC.
48 As a result of collating that material, Ms Lim's view is that:
(a) as revealed in the Marco Disclosure Affidavits, 132 investors deposited approximately $240 million into Mr Marco's personal bank accounts, namely, a nominated Westpac Banking Corporation home loan account and a nominated Westpac eSaver account.
Ms Lim explains that Mr Marco gave a document entitled 'Declaration of trust' (the Trust Document) to most of the investors which set out the terms, including a commencement date, maturity date and rate of return. The Trust Document describes the 'Investment type' as 'private placement'. As noted at [26] a pro forma of this Trust Document is annexed to the Marco December 2018 affidavit, the tender of which by ASIC, was not objected to by the defendants. Annexed to Ms Giubilato's affidavit is the Trust Document executed by Mr Marco and Mr Caughey in 2013. Both documents contain a clause to the effect that Mr Marco:
guarantees to the investor the repayment of the principal sum in the event of an investment loss in accordance with the provisions of this declaration. The collateral for this guarantee is by way of cash held at [Bank details of account in the name of Chris Marco with a minimum amount specified as collateral] should distribution of investment proceeds not be met at the appropriate designated time, within a 30 day period the proceeds will be withdrawn from the above account and deposited into the investor's nominated account. This guarantee is full and final with each investor and each invested amount.
Other versions of the Trust Document are annexed to Mr Iriks' affidavit sworn 12 December 2019.
(b) Ms Lim states that Mr Marco purportedly invested the investment moneys in overseas 'Private Placement Programmes' that offer high rates of return. Most of the investors were told by Mr Marco that their investment moneys were being invested in 'Private Placement Programmes'; and
(c) all of the funds provided by investors to Mr Marco were 'pooled' and utilised for a variety of purposes. Mr Marco personally invested some of the moneys in real estate and cars, either directly or through AMS or AMS Trust and also transferred moneys to Ms Talitha Marco, Mr Damon Marco and Ms Beverley Marco, who used the moneys to purchase shares, cars and properties or to make improvements to existing properties. A detailed analysis of the receipts and payments recorded in the statements for the defendants' banks accounts over a six month period, from 30 April 2018 to 30 October 2018 was undertaken by Mr Gomm. Mr Gomm's analysis is set out in Gomm 1. Mr Marco has communicated to investors that he expects to receive a return of approximately $200 million from investments, but he claims that this has been obstructed by the freezing orders in this proceeding. Since January 2010, the defendants' bank statements do not show any material deposits being received as a result of the purported investments made by the defendants.
49 ASIC's investigation into the conduct of Mr Marco and other persons remains ongoing.
50 Ms Lim explains that Mr Marco's assets and liabilities, by reference to the Marco Disclosure affidavits, were said by Mr Marco to be:
(a) bank accounts holding $6,868,897.82;
(b) personal assets of $10,509,000; and
(c) personal liabilities of $1,407,222.
51 Lim 1 also sets out that Mr Marco deposed in his Disclosure affidavit that he owned the following motor vehicles:
(a) Ford Falcon XY GTHO Phase III (1971);
(b) Datsun 260z Coupe (1975);
(c) Chrysler Charger VH E49 (1972);
(d) Holden Monaro GTS HQ Coupe (1971);
(e) Holden Torana Liftback LX SS A9X (1977);
(f) Holden Torana Bathurst LJ GTR XU-1 (1972);
(g) Holden HSV GTSR W1 (2017);
(h) Mercedes GLC 220D Wagon (2016);
(i) Holden HSV GTR Maloo Ute (2017); and
(j) Chrysler Jeep Trackhawk (2018).
52 As at 11 December 2019, however, Mr Marco only had a Jeep Grand Cherokee 2018 registered in his name, according to an email from the Department of Transport produced by Ms Lim.
53 Ms Lim identifies the following real estate in the name of Mr Marco:
(a) 89 Kalgoorlie Street, Mt Hawthorn, Western Australia;
(b) 90 Kalgoorlie Street, Mt Hawthorn, Western Australia; and
(c) 151 Scarborough Beach Road, Mt Hawthorn, Western Australia.
54 In relation to share holdings, Mr Nguyen, a lawyer employed by ASIC, issued a notice pursuant to s 33 of the ASIC Act seeking books and records in relation to Mr Marco, Mr Damon Marco, AMS and Coastline Group from ASX Settlement Pty Limited. Ms Lim produces copies of the letters from ASX Settlement to ASIC enclosing search results and a non-zero holdings report provided by ASX Settlement and this report reveals no holdings of shares in ASX companies.
55 Ms Lim refers to an increase in Mr Marco's assets of almost $173,000 in August 2019 which appears to be from a sale of Ms Talitha Marco's property. She identified the amounts held in various bank accounts exceeding $6 million. The Lim 1 affidavit details Mr Marco's earnings to which he deposed in the Marco Disclosure affidavits and the assets and liabilities of AMS as there deposed to. Assets of AMS were said to exceed $14 million. Ten real estate properties were identified by ASIC as being held by AMS, but no shares on the Australian Stock Exchange (the ASX) were held. Pursuant to the freezing orders, AMS pays ordinary operating expenses of up to $1750 per week, as well as additional expenditure from time to time by variation of the orders. This has included Mr Marco paying AMS from accounts held in his name amounts totalling almost $222,000 of investment moneys to pay operating expenses for AMS. AMS is receiving minimal income from its rental properties.
56 Ms Lim also lists assets and liabilities held by Mr Damon Marco, including a loan of $1.84 million by Mr Marco, unsecured to his son as revealed in Marco May 2019 affidavit. Mr Damon Marco gave an undertaking he would not dispose of property without the consent of ASIC. As a result, the joinder of Mr Damon Marco to these proceedings was discontinued in November 2019. Similar evidence was given in relation to the assets and liabilities of Ms Talitha Marco and Ms Beverley Marco. As noted above (at [48(a)]) in the Marco Disclosure affidavits, Mr Marco deposed to the fact that he owes $238,478,888 to 132 investors. ASIC has been unable to identify all of the investors, verify the amounts invested, ascertain the investment made by the defendants on behalf of each investor or verify the precise amount owing to investors, including accrued interest.
57 Ms Lim lists funds owed to Mr Marco as deposed to in the Marco Disclosure affidavits (in excess of $12.6 million) and his expectation to receive income from 14 investment programmes, being various large amounts, including 'USD$25m-$200m from Acapulco Trade & Investment'.
58 No deposits correlating with the anticipated returns on any of the investment programmes have been deposited into Mr Marco's bank accounts. Based on documents obtained in relation to 20 of Mr Marco's purported investment programmes, Ms Lim, for reasons expressed in Lim 1, expresses serious concerns in relation to both the potential recoverability and legitimacy of the investments made by Mr Marco detailed in those files. Much of the latter portion of Lim 1 is devoted to explaining why that is so. The evidence at this stage is unchallenged as Mr Marco is not relying upon the affidavit that he swore in opposition to this relief. Ms Lim relies on various google searches to which I obviously attribute very little weight, even at an interlocutory level, given the purpose for which they are apparently advanced and exposing, as they purport to do, references to international investment scams targeting investors and defrauding them. An example is the google search of Acapulco Trade & Investment from which Mr Marco anticipates receiving 'USD$20-$200 million income'. The search reveals that it does not even have a webpage, other than a Facebook address. Much of this information is of similar quality.
59 From Ms Lim's review of the investment files, Mr Marco's bank statements and the transcript of Ms Marissen's s 19 (ASIC Act) examination, she concludes that from January 2010 to December 2019 when Lim 1 was filed, Mr Marco had not generated any material returns from any of the financial investments listed at [86]-[131] of Lim 1. In other paragraphs of Lim 1, which might properly be regarded as submissions, rather than evidence, she records the view that Mr Marco and AMS have breached s 911A of the CA in the fashion indicated above. She explains the reasons for that view, drawing heavily on the content of ss 761-766C of the CA. She repeats similar material in relation to the failure to register a managed investment scheme.
60 As to the alleged continuing operation of the Scheme, despite the freezing orders, Ms Lim refers to the Gomm 1 affidavit which includes an analysis of the accounts held in Mr Marco's name for the period 1 November 2018 to 29 November 2019. The analysis suggests that Mr Marco paid the total sum of $575,434 to investors and that communications between Mr Marco and his investors, letters from investors requesting rollovers and Mr Marco's response to ASIC's reasonable assistance notice indicate that he is continuing to carry on a financial services business without holding an AFSL.
61 Ms Lim produces various client updates and investor group updates which appear to confirm this position and reiterates the reasons why ASIC wishes to have an interim receiver appointed.
62 Mr Gomm is also an investigator for ASIC. In Gomm 1 he produces 22 folders, each labelled with a folder number and containing various documents, including 'forthwith notices' issued by ASIC, the Marco and AMS workbooks obtained under those notices, numerous other notices, bank statements, credit card statements and other related documents. Pursuant to the 'forthwith notice', ASIC forensically imaged Mr Marco's computers. Mr Gomm explains and catalogues all the data obtained in this process. Mr Gomm conducted what might be described as a style of audit of numerous transactions and records in an attempt to verify the accuracy of the various records.
63 Mr Gomm also produces documents obtained under notices issued on Westpac, including account statements, internal working notes and email chains, to indicate that Mr Marco had access to at least on bank account outside of Australia, located in Jersey. Those documents reveal a number of transfers to and from the Jersey account, including a telegraphic transfer of $14 million to Jersey in June 2016 followed in December by a return transfer of $15 million with a description 'closing expat account'.
64 Mr Gomm is of the view that the overseas accounts operated by Mr Marco in Jersey have since been closed.
65 Mr Nguyen is also an ASIC lawyer involved in the investigation. Annexed to his affidavit of 12 December 2019, he produces a notice issued to an investor pursuant to s 33 of the ASIC Act. In compliance with the notice, the investor produced two email updates, sent by Mr Marco on 22 December 2018 and 23 January 2019, the first being sent to the whole investor group and the second sent personally to this investor. The group update followed substantial earlier publicity concerning these proceedings and Mr Marco was at pains to stress in the update that he was not conducting a Ponzi scheme. In the subsequent personal update, Mr Marco stressed to the investor his commitment to fulfilling the Declaration of Trust and that he had been complying with ASIC's investigations.
66 Ms Giubilato is another ASIC lawyer involved in the conduct of the investigation of suspected contraventions. Her affidavit refers to a compulsory examination of Mr Caughey conducted by ASIC. Further reference to this material will be made subsequently, but essentially Mr Caughey was formerly employed by the defendants and gave evidence of the promised returns and his role in liaising with investors and providing investor group updates.
67 As noted above (at [18]), the defendants rely solely on an affidavit sworn by Ms Sierakowski on 6 March 2020. She gives evidence to the effect that her principal, Mr Margaretic on about 13 December 2019, emailed ASIC to query the position that ASIC had taken in respect of Mr Marco's alleged breaches of any applicable law. ASIC indicated that the investigation was ongoing, but ASIC's concluded view was that Mr Marco had contravened both s 601ED(5) and s 911A of the CA, such that ASIC was seeking the substantive relief in the amended originating process, for the reasons set out in supporting affidavits.
68 This was followed by further correspondence and, on 3 February 2020, a Mr Byrne, an investigator for ASIC made clear that ASIC's investigation was separated into two parts: civil and criminal. Mr Byrne was in the criminal investigation team. Since ASIC had become involved with Mr Marco in late 2018, the investigation had focussed primarily on the civil side. He said:
The criminal team is currently gathering and examining evidence that will be presented to the Commonwealth Department of Public Prosecutions (CDPP) who will determine if Mr Marco should be criminally charged. As a part of this process we have been contacting investors to ask if they would be willing to provide a witness statement regarding their involvement.
69 In Lim 2 (sworn on 11 February 2020), Ms Lim annexes a substantial body of correspondence between the parties and makes reference to proceedings commenced in the Supreme Court of Western Australia against Mr Marco: Markopoulus and Ors v Marco CIV1431 of 2019 and annexed the pleadings. She said that ASIC was becoming increasingly concerned that it did not have sufficient information to enable it to make an informed decision about whether or not to consent to variations of the asset freezing orders in the best interests of creditors.
70 ASIC's responsive material, contained in Lim 3 and Gomm 2, seems very much directed to counteracting the accuracy of the assertions advanced by Mr Marco in the Marco 2020 affidavit, which is not relied upon by Mr Marco. As it is not read into evidence, it is now inappropriate to rely upon responsive material, at least in this interlocutory process.
71 In the annexures to Lim 4 (sworn 11 March 2020), Ms Lim makes various minor corrections, including the fact that while the criminal investigation is progressing, no decision has yet been made by ASIC to refer a brief to the Commonwealth Department of Public Prosecutions (the CDPP). She also records that since Lim 1, Mr Marco has made three further applications to vary orders to allow payments to be made from the defendants' bank accounts. She details those payments which total a few thousand dollars.