ASIC v Sigalla (No. 2)

HIS HONOUR : This judgment concerns the admissibility of evidence objected to under s 138 of the Evidence Act 1995 (NSW).

I am hearing a Further Amended Interlocutory Process filed by the Australian Securities and Investments Commission (“ASIC”) against Mr Andrew Sigalla by which ASIC charges Mr Sigalla with contempt for having allegedly contravened orders made by Bergin CJ in Eq on 26 August 2009, by Barrett J on 31 August 2009 and 3 September 2009, by me on 16 September 2009 (as such orders as were varied on 2, 9, 10, 13, 16 and 27 November 2009), and by Austin J on 30 November 2009 as varied on 16 December 2009. Originally there were 45 charges. ASIC has stated that it is not proceeding with two. The orders were made pursuant to s 1323 of the Corporations Act 2001 (Cth) and restrained certain dealings by Mr Sigalla with his assets. In the description of the charges which follows I have adopted the numbering in the Further Amended Interlocutory Process rather than the Further Amended Statement of Charge.

The first charge is that Mr Sigalla made a request for a sum of $300,000 to be transferred from his bank account with KAS Bank to a bank account held by Moon Corporation Pty Ltd with the National Australia Bank and subsequently took no steps to prevent the transfer occurring.

Charges 2-6 allege that Mr Sigalla breached orders of Barrett J by making five payments (four of $1,680 and one of $3,380) to Premier Models Sydney NSW for the provision of what are euphemistically called female models or escorts. Charge 7 has not been pressed.

Charges 8-13 allege that the first defendant breached orders of the court by making a payment of $3,000 to the TAB on or about 12 September 2009, and then used funds credited to his TAB account to place bets with the TAB in sums ranging between $250 and $1,000.

Charges 14-26 allege that Mr Sigalla breached the orders by using his credit cards to pay sums ranging from $660 to $3,850 to TLC Design Pty Ltd for the provision of female models or escorts. Thirteen such payments are alleged to have been made between 20 and 21 October 2009, 6 and 7 November 2009, 24 and 25 November 2009 and 7 January 2010.

Charges 27-30 allege that Mr Sigalla committed contempt of court by using his credit card to pay four sums of $660 to Luna Sydney Pty Ltd on or about 15 November 2009 for the provision of female models or escorts.

Charge 31 alleges that Mr Sigalla was guilty of contempt by, on 9 September 2009, causing a sum of $52,500 to be paid from his bank account with St George Bank to his bank account in the United States for the purpose of paying his children’s school fees in circumstances where he was allegedly aware that the fees had already been paid. I understand ASIC intends to allege that this was the stated, but not the true purpose, of the payment. Charge 32 has not been pressed.

Charges 33-42 are not relevant to the present issues concerning the admissibility of evidence.

Charges 42A to 42C allege that Mr Sigalla breached orders by making three payments on or about 4, 5 and 6 October 2009 of sums of $2,415 and $420 to Six Star International for the provision of female models or escorts.

I refused Mr Sigalla’s application to dismiss summarily the charges that he breached orders of the court by making payments by credit card ( ASIC v Sigalla [2010] NSWSC 606).

The issue of admissibility of evidence can be understood from the first affidavit objected to. ASIC read an affidavit of Mr Glen Cameron sworn 14 December 2009. Mr Cameron is an employee of American Express Australia Limited. He deposed having been served by ASIC with a notice under s 33 of the Australian Securities and Investments Commission Act 2001 (Cth) (“ ASIC Act ”). He produced a copy of Mr Sigalla’s credit card statement for his American Express account for the period 18 August 2009 to 13 September 2009. The notice issued to American Express Australia Limited was dated 26 October 2009. It was issued by Mr Conor Brennan, a senior financial investigator employed by ASIC. The notice stated: “ In relation to suspected contraventions by Andrew John Sigalla (‘ Sigalla ’), John Falconer (‘ Falconer ’) and Michael Otten (‘ Otten ’), now former directors of TZ Limited (ACN 073 979 272) (‘ TZ Limited ’) of (a) Sections 182, 184, 590 and 596 of the Corporations Act 2001 (Cth); and/or (b) Sections 173, 176A, 178BA and 178BB of the Crimes Act 1909 (NSW) in the period 1 April 2004 to 18 June 2009 (‘ the relevant period ’) concerning the affairs of TZ Limited, in particular the conduct of Sigalla, Falconer and Otten as directors at times during the relevant period. You are hereby notified that, under section 33 of the Australian Securities and Investments Commission Act 2001, you are required to produce to: Conor Brennan at: Level 18, 1 Martin Place, Sydney NSW 2000 on: 27 October 2009 at: 11 am the following books; The American express [sic] statement of account [xxxx-yyyy-xxxx-yyy] for the period 13 September 2009 to current date. ”

The affidavit is relevant only insofar as Mr Cameron annexed the copies of Mr Sigalla’s statement of account with American Express. Counsel for Mr Sigalla objected to the affidavit on the ground that the evidence was improperly obtained and should be excluded pursuant to s 138 of the Evidence Act . Counsel submitted that although the notice stated that the documents were sought in connection with the investigation into suspected contraventions of former directors of TZ Limited during the period 1 April 2004 to 18 June 2009, in fact the documents could not have been sought for that purpose. The documents sought could only have come into existence after 13 September 2009 and it would be fanciful to think (so it was submitted) that statements of Mr Sigalla’s American Express account for periods after 13 September 2009 could be relevant to an investigation into his, or other former directors’, conduct as directors of TZ Limited up to 18 June 2009. Rather, so it was said, the documents were sought with a view to investigating or prosecuting charges of contempt. Not only was that not the purpose stated in the notice, but, so it was submitted, that was not a purpose for which ASIC could exercise its statutory power to compel the production of documents. Hence counsel for Mr Sigalla submitted that the evidence was obtained improperly and should be excluded pursuant to s 138 of the Evidence Act .

The same submission was made in respect of numerous affidavits read by ASIC. In each case documents were produced by third parties following service of a notice purportedly given in the exercise of a statutory power under the ASIC Act . Counsel for Mr Sigalla contended that ASIC had no power to issue the notice, that if it had power it did not lawfully exercise the power because the notices did not truly state the investigation for which they were issued, that the notices were invalid, and that the evidence was improperly obtained. Counsel challenged the validity of 38 notices issued by ASIC under ss 19(2), 30, 33 or 37(9) of the ASIC Act . The notices were issued between 1 September 2009 and 12 February 2010. Mr Sigalla contends that evidence obtained through the use of those notices should be rejected under s 138.

Section 138 of the Evidence Act provides: “ 138 Exclusion of improperly or illegally obtained evidence (1) Evidence that was obtained: (a) improperly or in contravention of an Australian law, or (b) in consequence of an impropriety or of a contravention of an Australian law, is not to be admitted unless the desirability of admitting the evidence outweighs the undesirability of admitting evidence that has been obtained in the way in which the evidence was obtained. (2) Without limiting subsection (1), evidence of an admission that was made during or in consequence of questioning, and evidence obtained in consequence of the admission, is taken to have been obtained improperly if the person conducting the questioning: (a) did, or omitted to do, an act in the course of the questioning even though he or she knew or ought reasonably to have known that the act or omission was likely to impair substantially the ability of the person being questioned to respond rationally to the questioning, or (b) made a false statement in the course of the questioning even though he or she knew or ought reasonably to have known that the statement was false and that making the false statement was likely to cause the person who was being questioned to make an admission. (3) Without limiting the matters that the court may take into account under subsection (1), it is to take into account: (a) the probative value of the evidence, and (b) the importance of the evidence in the proceeding, and (c) the nature of the relevant offence, cause of action or defence and the nature of the subject-matter of the proceeding, and (d) the gravity of the impropriety or contravention, and (e) whether the impropriety or contravention was deliberate or reckless, and (f) whether the impropriety or contravention was contrary to or inconsistent with a right of a person recognised by the International Covenant on Civil and Political Rights, and (g) whether any other proceeding (whether or not in a court) has been or is likely to be taken in relation to the impropriety or contravention, and (h) the difficulty (if any) of obtaining the evidence without impropriety or contravention of an Australian law. Note. The International Covenant on Civil and Political Rights is set out in Schedule 2 to the Human Rights and Equal Opportunity Commission Act 1986 of the Commonwealth [sic] . ”

Initially, counsel for Mr Sigalla did not submit that ASIC had obtained evidence in contravention of an Australian law. They submitted that the notices were issued for a purpose foreign to the power ASIC has under Part 3 of the ASIC Act . Counsel submitted that evidence obtained through the issue of such notices was obtained improperly or in consequence of an impropriety within the meaning of s 138(1). As the argument developed counsel also submitted that if ASIC had power to issue notices to obtain evidence for the purpose of investigating or prosecuting charges of contempt, at least some of the notices were invalid because the true purpose was not stated. The notice of 26 October 2009 to American Express referred to above is an example.

Initially, counsel for Mr Sigalla submitted that ASIC had committed a contempt of court by using the procedures for compulsory production of documents or provision of information under the ASIC Act to obtain a procedural advantage which could not be obtained under the procedural rules of the court. That contention was not pressed in final submissions. There was no evidence that the officers of ASIC who issued notices did so for the sole or dominant purpose of obtaining evidence that could not be obtained under the court’s procedures ( NSW Food Authority v Nutricia Australia Pty Limited [2008] NSWCCA 252; (2008) 72 NSWLR 456 at [15], [158], [190]-[197]). The Legislation

Sections 1(2)(d) and (g) and (3) of the ASIC Act provides: “ 1 Objects ... (2) In performing its functions and exercising its powers, ASIC must strive to: ... (d) administer the laws that confer functions and powers on it effectively and with a minimum of procedural requirements; and ... (g) take whatever action it can take, and is necessary, in order to enforce and give effect to the laws of the Commonwealth that confer functions and powers on it. (3) This Act has effect, and is to be interpreted, accordingly. ”

Part 3 of the ASIC Act is headed “ Investigation and information – gathering ”. Subsection 13(1) provides: “ 13 General powers of investigation (1) ASIC may make such investigation as it thinks expedient for the due administration of the corporations legislation (other than the excluded provisions) where it has reason to suspect that there may have been committed: (a) a contravention of the corporations legislation (other than the excluded provisions); or (b) a contravention of a law of the Commonwealth, or of a State or Territory in this jurisdiction, being a contravention that: (i) concerns the management or affairs of a body corporate or managed investment scheme; or (ii) involves fraud or dishonesty and relates to a body corporate or managed investment scheme or to financial products. ”

The “ corporations legislation ” means the ASIC Act and the Corporations Act (no excluded provision is relevant). Thus, on the face of the section, where ASIC has reason to suspect a contravention of the Corporations Act or the ASIC Act , or another law of the Commonwealth or of a State or Territory, being a suspected contravention falling within s 13(1)(b)(i) or (ii), ASIC is empowered to make such investigation as it sees fit for the due administration of the Corporations Act or the ASIC Act . Paragraphs (a) and (b) of s 13(1) specify the necessary criteria for the exercise of the investigative power. But once the power to investigate is enlivened, the power is not confined to investigating the suspected contraventions. Whether this prima facie reading of the section is correct is addressed below.

Section 19 of the ASIC Act provides: “ 19 Notice requiring appearance for examination (1) This section applies where ASIC, on reasonable grounds, suspects or believes that a person can give information relevant to a matter that it is investigating, or is to investigate, under Division 1. (2) ASIC may, by written notice in the prescribed form given to the person, require the person: (a) to give to ASIC all reasonable assistance in connection with the investigation; and (b) to appear before a specified member or staff member for examination on oath and to answer questions. Note: Failure to comply with a requirement made under this subsection is an offence (see section 63). (3) A notice given under subsection (2) must: (a) state the general nature of the matter referred to in subsection (1); and (b) set out the effect of subsection 23(1) and section 68. ”

Subsection 23(1) and s 68 provide: “ 23 Examinee’s lawyer may attend (1) The examinee’s lawyer may be present at the examination and may, at such times during it as the inspector determines: (a) address the inspector; and (b) examine the examinee; about matters about which the inspector has examined the examinee. ... 68 Self incrimination (1) For the purposes of this Part, of Division 3 of Part 10, and of Division 2 of Part 11, it is not a reasonable excuse for a person to refuse or fail: (a) to give information; or (b) to sign a record; or (c) to produce a book; in accordance with a requirement made of the person, that the information, signing the record or production of the book, as the case may be, might tend to incriminate the person or make the person liable to a penalty. (2) Subsection (3) applies where: (a) before: (i) making an oral statement giving information; or (ii) signing a record; pursuant to a requirement made under this Part, Division 3 of Part 10 or Division 2 of Part 11, a person (other than a body corporate) claims that the statement, or signing the record, as the case may be, might tend to incriminate the person or make the person liable to a penalty; and (b) the statement, or signing the record, as the case may be, might in fact tend to incriminate the person or make the person so liable. (3) The statement, or the fact that the person has signed the record, as the case may be, is not admissible in evidence against the person in: (a) a criminal proceeding; or (b) a proceeding for the imposition of a penalty; other than a proceeding in respect of: (c) in the case of the making of a statement—the falsity of the statement; or (d) in the case of the signing of a record—the falsity of any statement contained in the record. ”

Division 3 of Part 3 concerns the power to require production of books and related provisions. Sections 28, 30, 33(1) and 37 provide: “ 28 When certain powers may be exercised A power conferred by this Division (other than sections 29, 30A, 35, 36 and 39A) may only be exercised: (a) for the purposes of the performance or exercise of any of ASIC’s functions and powers under the corporations legislation; or (b) for the purposes of ensuring compliance with the corporations legislation; or (c) in relation to: (i) an alleged or suspected contravention of the corporations legislation; or (ii) an alleged or suspected contravention of a law of the Commonwealth, or of a State or Territory in this jurisdiction, being a contravention that concerns the management or affairs of a body corporate, or involves fraud or dishonesty and relates to a body corporate or financial products; or (d) for the purposes of an investigation under Division 1. ... 30 Notice to produce books about affairs of body corporate or registered scheme (1) ASIC may give to: (a) a body corporate that is not an exempt public authority; or (b) an eligible person in relation to such a body corporate; a written notice requiring the production to a specified member or staff member, at a specified place and time, of specified books relating to affairs of the body. Note: Failure to comply with a requirement made under this subsection is an offence (see section 63). (2) ASIC may give to: (a) the responsible entity of a registered scheme; or (b) an eligible person in relation to the responsible entity; a written notice requiring the production to a specified member or staff member, at a specified place and time, of specified books relating to the operation of the scheme. Note: Failure to comply with a requirement made under this subsection is an offence (see section 63). ... 33 Notice to produce documents in person’s possession (1) ASIC may give to a person a written notice requiring the production to a specified member or staff member, at a specified place and time, of specified books that are in the first mentioned person’s possession and relate to: (a) affairs of a body corporate; or (ab) affairs of a registered scheme; or (b) a matter referred to in any of paragraphs 31(1)(g) to (m), inclusive; or (c) a matter referred to in paragraph 32A(c) or (d). Note: Failure to comply with a requirement made under this section is an offence (see section 63). ... 37 Powers where books produced or seized (1) This section applies where: (a) books are produced to a person under a requirement made under this Division; or (b) under a warrant issued under section 36, a person: (i) takes possession of books; or (ii) secures books against interference; or (c) by virtue of a previous application of subsection (8) of this section, books are delivered into a person’s possession. (2) If paragraph (1)(a) applies, the person may take possession of any of the books. (3) The person may inspect, and may make copies of, or take extracts from, any of the books. (4) The person may use, or permit the use of, any of the books for the purposes of a proceeding. (5) The person may retain possession of any of the books for so long as is necessary: (a) for the purposes of exercising a power conferred by this section (other than this subsection and subsection (7)); or (b) for any of the purposes referred to in paragraphs 28(a), (b) and (d) or 30A(2)(a), (b) and (d), as the case requires; or (c) except in the case of books required to be produced for a purpose specified in subparagraph 30A(2)(a)(ii) or 30A(2)(b)(ii)—for a decision to be made about whether or not a proceeding to which the books concerned would be relevant should be begun; or (d) for such a proceeding to be begun and carried on. (6) No one is entitled, as against the person, to claim a lien on any of the books, but such a lien is not otherwise prejudiced. (7) While the books are in the person’s possession, the person: (a) must permit another person to inspect at all reasonable times such (if any) of the books as the other person would be entitled to inspect if they were not in the first mentioned person’s possession; and (b) may permit another person to inspect any of the books. (8) Unless subparagraph (1)(b)(ii) applies, the person may deliver any of the books into the possession of ASIC or of a person authorised by it to receive them. (9) If paragraph (1)(a) or (b) applies, the person, or a person into whose possession the person delivers any of the books under subsection (8), may require: (a) if paragraph (1)(a) applies—a person who so produced any of the books; or (b) in any case—a person who was a party to the compilation of any of the books; to explain any matter about the compilation of any of the books or to which any of the books relate. Note: Failure to comply with a requirement made under this subsection is an offence (see section 63). (10) In this section: proceeding includes: (a) in relation to a contravention of Division 2 of Part 2—a proceeding under a law of the Commonwealth, a State or a Territory; and (b) otherwise—a proceeding under a law of the Commonwealth, or of a State or Territory in this jurisdiction. ”

In the present case ASIC purportedly exercised powers conferred by ss 30, 33 and 37(9). No argument was raised that the notices issued to bodies corporate under ss 30 and 33 did not relate to the affairs of those bodies. The powers under ss 30, 33 and 37(9) can be exercised only for a purpose described in s 28. Such purposes extend to the carrying out of an investigation authorised by s 13 (s 28(a) and (d)). Such powers may also be exercised for the purpose of ensuring compliance with the corporations legislation (s 28(b)). ASIC was entitled to issue notices under Part 3 of the ASIC Act to investigate charges of contempt

The orders Mr Sigalla is alleged to have breached were made on the application of ASIC pursuant to s 1323 of the Corporations Act . Section 1323(9) provides that a person must not contravene an order of the court made under the section that is applicable to that person. Such a contravention is an offence of strict liability (ss 1311 and 1323(10)).

Counsel for Mr Sigalla accepted that ASIC could exercise its powers under Division 3 of Part 3 of the ASIC Act for the purpose of investigating a suspected contravention of s 1323 for the purposes of considering whether proceedings for an offence should be instituted for that contravention. The present proceedings for contempt are not of that character. Counsel for Mr Sigalla correctly submitted that the law of contempt is state law and not federal law ( Director of Public Prosecutions v Australian Broadcasting Corporation (1987) 7 NSWLR 588 at 593, 595). Whilst it was accepted that ASIC has power to commence proceedings for contempt (such a power being necessarily incidental to the power to bring proceedings pursuant to s 1323 of the Corporations Act) , counsel for Mr Sigalla submitted that nothing in Part 3 of the ASIC Act authorises ASIC to use the powers contained therein to gather evidence for the purposes of investigating or prosecuting proceedings for contempt.

Counsel also submitted that if ASIC had power to issue the notices for, for example, a suspected contravention of s 1323 which might be punishable by criminal proceedings pursuant to s 1311 of the Corporations Act , such powers could only be exercised for that purpose and it would be an abuse of power to use information or documents for a different purpose, namely the investigation and prosecution of charges of contempt for which ASIC had no direct power to compel the production of documents or provision of information. Counsel referred to Johns v Australian Securities Commission (1992) 178 CLR 408 at 423 where Brennan J said: “ But when a power to require disclosure of information is conferred for a particular purpose, the extent of dissemination or use of the information disclosed must itself be limited by the purpose for which the power was conferred. In other words, the purpose for which a power to require disclosure of information is conferred limits the purpose for which the information disclosed can lawfully be disseminated or used. In Marcel v Commissioner of Police Sir Nicolas Browne-Wilkinson V-C said, in reference to a statutory power conferred on police to seize documents: ‘ Powers conferred for one purpose cannot lawfully be used for other purposes without giving rise to an abuse of power. Hence, in the absence of express provision, the Act cannot be taken to have authorised the use and disclosure of seized documents for purposes other than police purposes.’ And in Morris v Director of the Serious Fraud Office, Sir Donald Nicholls V.-C. said in reference to information acquired by exercise of statutory powers: ‘The compulsory powers of investigation exist to facilitate the discharge by the S.F.O. of its statutory investigative functions. The powers conferred by s. 2 are exercisable only for the purposes of an investigation under s. 1. When information is obtained in exercise of those powers the S.F.O. may use the information for those purposes and purposes reasonably incidental thereto and such other purposes as may be authorised by statute, but not otherwise. Compulsory powers are not to be regarded as encroaching more upon the rights of individuals than is fairly and reasonably necessary to achieve the purpose for which the powers were created. That is to be taken as the intention of Parliament, unless the contrary is clearly apparent.’” (citations omitted)

Counsel also relied on Williams v Keelty (2001) 111 FCR 175 at [234] in support of a submission that if ASIC were actuated by more than one purpose in exercising its powers under Division 3 of Part 3, one of those purposes being within power and another not, then the exercise of the powers would be invalidated if the ulterior purpose were a substantial purpose in the sense that, but for that purpose, the power would not have been exercised.

In my view ASIC had the power to investigate a suspected breach of the orders and to obtain evidence to support a charge of contempt. A breach of the orders is a contravention of s 1323(9) of the Corporations Act . The fact that s 1311 of the Corporations Act provides one sanction against a contravention of s 1323, that is, by criminal proceedings, does not mean that the power to investigate a suspected contravention of s 1323 and to issue notices for production of documents can only be exercised for the purpose of investigating and prosecuting a criminal offence.

Neither s 13 nor s 28 of the ASIC Act confines the use of material obtained in an investigation or pursuant to a notice issued under Division 3 to pursuit of the suspected contraventions of the Corporations Act which triggered the investigation, or to the suspected contravention of s 1323 by the institution of criminal proceedings. To the contrary, obtaining material pursuant to the powers in Part 3 of the ASIC Act to investigate and pursue a charge of contempt is authorised by each paragraph of s 28.

Such a course is within the scope of an investigation authorised by s 13(1) for ASIC to do what it thinks expedient for the “ due administration of the corporations legislation ”. In Johns v Connor (1992) 35 FCR 1 at 11, Johns v Australian Securities Commission (1992) 35 FCR 146 at 167, and Boys v Australian Securities Commission (1998) 80 FCR 403 at 423-425 Lockhart J, Black CJ and Von Doussa J and Merkel J said that ASIC could exercise its investigative power under s 13 only for the purpose of investigating a suspected contravention of the corporations legislation, although if, in the course of its investigation it came to suspect additional contraventions, it could investigate those as well. This suggested limitation on the investigative power is inconsistent with the express terms of s 13(1). But even if it is correct, it does not preclude ASIC’s extending its investigation into a suspected contravention of s 1323(9), nor limit the investigation to possible criminal proceedings arising from such a contravention. An exercise of the power pursuant to Division 3 of Part 3 of the ASIC Act to obtain books and information for possible contempt proceedings is a purpose authorised by paras 28(a) and (d).

The fact that proceedings for contempt based upon the alleged contravention of orders made under s 1323(1) is classified as a proceeding involving the application of state law which ASIC can bring by virtue of its being a litigant does not mean that such proceedings are not also brought to further the due administration of the corporations legislation. The exercise of a power in order to investigate and prosecute contempt proceedings is within the purpose provided for by s 28(b) of ensuring compliance with the corporations legislation. It is also an exercise of power “ in relation to ” a suspected contravention of the corporations legislation and thus authorised by s 28(c), notwithstanding that the charge of contempt is not a charge brought pursuant to the exercise of a power expressly conferred by the Corporations Act .

Section 1(2)(g) of the ASIC Act requires that, in performing its functions and exercising its powers, ASIC must strive to take whatever action it can take and is necessary in order to enforce and give effect to the laws of the Commonwealth that confer functions and powers on it. Bringing contempt proceedings to enforce orders made under s 1323 and to punish non-compliance with such orders is consistent with s 1(2)(g). The ASIC Act is to be interpreted in a way which promotes ASIC’s ability so to act (s 1(3)).

Pursuant to s 37(4) of the ASIC Act a person to whom books are produced under a notice given under s 30 or s 33 may use or permit use of the books for the purposes of a “ proceeding ”. In that section “ proceeding ” includes a proceeding under a law of the Commonwealth or of a State or Territory (s 37(10)). The definition of “ proceeding ” is inclusive. It is not necessary to decide whether the charges of contempt are a proceeding “under” a law of a State. (On one view the proceeding is a proceeding “under” s 23 of the Supreme Court Act 1970 (NSW) which confers on the court all jurisdiction which may be necessary for the administration of justice in New South Wales.) Whether that is so or not, the documents may be used for the purposes of a proceeding as defined in s 5 of the ASIC Act , being a proceeding in a court.

For these reasons I reject the submissions of counsel for Mr Sigalla that ASIC was not entitled, through the exercise of its powers under Part 3 of the ASIC Act , to obtain documents for the purpose of investigating or pursuing the charges of contempt. Notice to Mr Sigalla under section 19(2)(a)

Separate arguments were addressed in relation to evidence obtained following the service of a notice on Mr Sigalla on 19 October 2009.

On 9 September 2009 ASIC served a notice on Mr Sigalla pursuant to s 19(2) of the ASIC Act requiring him to appear on 9 September 2009 to be examined on oath and affirmation and to answer questions put to him in relation to the investigation into the affairs of TZ Limited, and, in particular, the conduct of him, Mr Falconer and Mr Otten as directors during the period from 1 April 2004 to 18 June 2009. The investigation was also said to extend to suspected contraventions by two other companies. The notice of 9 September 2009 also required Mr Sigalla “ to give the Australian Securities and Investments Commsion all reasonable assistance in connection with the investigation. ” This notice was given pursuant to s 19(2) of the ASIC Act . The notice given on 9 September 2009 was in the prescribed form. It set out the effect of s 23(1) and s 68 of the ASIC Act insofar as it summarised the terms of those provisions. The notice of 9 September 2009 did not state any particular matter in respect of which ASIC required Mr Sigalla to provide all reasonable assistance.

The notice to Mr Sigalla of 9 September 2009 was addressed to him, care of his solicitor, Mr Ward of HWL Ebsworth Lawyers. Mr Sigalla attended the examination on 9 September 2009. Mr Sigalla was further examined on 24 and 29 September 2009.

On 19 October 2009 Mr Jackson sent an email to Mr Ward in which he stated: “ Pursuant to s 19(2)(a) of the ASIC Act 2001, I require Mr Sigalla to give to ASIC all reasonable assistance in connection with its TZ Limited investigation, by attending before one or other of Grant Jackson or Richard Wells at the offices of ASIC at Level 18, 1 Martin Place Sydney on or before 10:00am on Wednesday 21 October 2009 and there signing the original of the letter to JPMorgan Chase, a copy of which are [sic] attached. ”

The attached letter was addressed to JPMorgan Chase in New York. It provided for Mr Sigalla to authorise JPMorgan Chase to provide ASIC with every assistance in relation to accounts held by JPMorgan Chase over which Mr Sigalla had or had previously had authority or control, including a particular account said to be in his name, and accounts if any held by two other companies.

Mr Sigalla did not sign the attached letter. Mr Sigalla’s solicitor, Mr Ward, replied on 20 October 2009. He noted that Mr Sigalla’s family resided in the United States. Mr Ward said that Mr Sigalla’s wife was dependent upon the JPMorgan Chase bank account on which to live and Mr Sigalla was concerned that any further contact with JPMorgan Chase would cause that bank to close the account thereby depriving the family of its means of meeting their living expenses. Mr Ward said: “ Mr Sigalla remains conscious of his obligation under Section 19 of the ASIC Act. ... ... Mr Sigalla will provide assistance by the provision of Bank statements or other documents as reasonably requested in relation to the JPMorgan Chase account in the absence of a draft letter being sent. ... Mr Sigalla remains conscious of his obligations under the ASIC Act and he is willing to co-operate further with the investigation. In this spirit we would be grateful if you would consider the above and discuss further with us alternatives to the step contemplated by your letter of 19 October 2009 .”

Subsequently Mr Sigalla offered to provide ASIC with a draft of a letter to JPMorgan Chase that he was prepared to sign. However, he withdrew from that position. Instead, through Mr Ward, he offered to provide to ASIC all bank statements that ASIC required from the relevant account. Thereafter Mr Ward, on behalf of Mr Sigalla, sent to ASIC various JPMorgan Chase Bank statements.

Counsel for Mr Sigalla now objects to the tender of those bank statements on the ground that they were provided in consequence of a demand purportedly made by ASIC pursuant to s 19(2)(a) of the ASIC Act , that is, a demand that Mr Sigalla give ASIC all reasonable assistance in connection with the investigation. Counsel contends that that notice was given on 19 October 2009, and was invalid because the notice given by email on that day did not set out the effect, relevantly, of s 68 of the ASIC Act . Counsel submitted that the statements as to the effect of s 68 of the ASIC Act enclosed with ASIC’s notice of 9 September 2009 could not be relied upon in respect of the notice given on 19 October 2009. Counsel also submitted that the notice given on 9 September 2009 was defective because it did not accurately set out the effect of s 68. Counsel submitted that s 68(1) abrogated the privilege against self-incrimination only in respect of a requirement for a person to give information, sign a record or produce a book. There was no abrogation of the privilege in respect of a person who is required to provide all reasonable assistance pursuant to s 19(2)(a). It was submitted that the notice should have stated that this was the effect of s 68 so that Mr Sigalla would have known that he could have claimed privilege against self-incrimination when required to provide assistance under s 19(2)(a). Instead it should be inferred that he co-operated to the extent he did in the belief that he would otherwise be liable for contravening s 19(2)(a). Hence it was submitted that the bank statements of the JPMorgan Chase bank account produced by Mr Sigalla to ASIC should be rejected as evidence improperly obtained or obtained in consequence of an impropriety or contravention of an Australian law.

I do not accept that it was incumbent on ASIC on each occasion on which it required Mr Sigalla to give ASIC all reasonable assistance in connection with the investigation for it to serve a fresh notice in the prescribed form. The form prescribed for the purposes of s 19(2) is Form 1 in Schedule 1 to the Australian Securities and Investments Commission Regulations 2001 (Cth) (“ASIC Regulations”) (Reg 4). That form provides as follows: “ Form 1 - Notice requiring appearance at an examination or reasonable assistance in connection with an investigation (regulation 4) Australian Securities and Investment Commission Regulations 2001 Australian Securities and Investments Commission NOTICE REQUIRING APPEARANCE AT AN EXAMINATION OR REASONABLE ASSISTANCE IN CONNECTION WITH AN INVESTIGATION To: 1 In relation to an investigation of 2 you are notified that under subsection 19(2) of the Australian Securities and Investments Commission Act 2001 (‘the Act’) you are required: (a) to appear at 3 on 4 at 5 before 6 for examination on oath or affirmation and to answer questions put to you in relation to the investigation; and (b) to give the Australian Securities and Investments Commission all reasonable assistance in connection with the investigation. Please note the provisions of subsection 23(1) of the Act (relating to legal representation) and section 68 of the Act (relating to self-incrimination). The effect of those provisions is set out at the end of this form. Dated 4 . Signature of person authorised by the Commission to conduct the examination: NOTICE OF RELEVANT STATUTORY PROVISIONS 1. Subsection 23 (1) of the Act provides that a person who is required to submit to an examination is entitled to have his or her lawyer attend the examination. It also provides that the person’s lawyer may address the inspector or ask the person questions about matters raised with the person by the inspector. 2. (1) You must not fail to comply with this notice without reasonable excuse (see subsection 63 (1) of the Act). (2) It is not a reasonable excuse for failure to comply with this notice that giving information or signing a record or producing a book might tend to incriminate you or expose you to a penalty (see subsection 68 (1) of the Act). (3) However, if: (a) before making an oral statement or signing a record in answer to this notice you claim that making the statement or signing the record might tend to incriminate you or expose you to a penalty; and (b) making the statement or signing the record might in fact tend to incriminate you or expose you to a penalty; the statement, or the fact that you have signed the record, is not admissible in evidence in any criminal proceedings, or proceedings for the imposition of a penalty, against you other than proceedings in respect of the falsity of the statement or the record. (4) The right to make a claim of this kind is not available to a body corporate (see subsections 68 (2) and (3) of the Act). __________________________________________________________________________ 1 insert full name and address of the person to whom the notice is to be given 2 insert the nature of the matter to which the investigation relates 3 insert time of day 4 insert date 5 insert full particulars of the address of the place at which the requirement is to be satisfied 6 insert full name of the person conducting the examination ”

The prescribed form does not require ASIC to specify the particular assistance it requires in connection with the investigation. Rather, what is contemplated is that a person who may be required to provide such assistance is to be given notice in the prescribed form, which notice is to include a statement as to the effect of ss 23(1) and 68 of the ASIC Act. Once a notice in that form is given the recipient’s attention is drawn to the relevant sections. The form of the notice contemplates that after service of the notice ASIC may make particular requests for assistance. Provided the notice is given in respect of the same investigation, there is no reason, either as a matter of policy or legislative requirement, that the information already given need be repeated. The construction advanced by counsel for Mr Sigalla would be inconsistent with interpreting the Act consistently with ASIC’s “[administering] the laws that confer functions and powers on it effectively and with a minimum of procedural requirements ” (s 1(2)(d) and (3)).

The notice given to Mr Sigalla on 9 September 2009 was in the prescribed form. Counsel for Mr Sigalla also submitted that the prescribed form did not comply with the requirement in s 19(3) that, relevantly, the notice set out the effect of s 68. As noted above, counsel for Mr Sigalla submitted that s 68 abrogates the privilege against self-incrimination only insofar as a person is required to give information, or sign a record or produce a book (s 68(1)). In the context of Part 3, a “ record ” appears to be a record of examination. Counsel for Mr Sigalla argued that the effect of s 68 is that the privilege against self-incrimination is not abrogated where a person is required to give ASIC reasonable assistance otherwise than by being required to give information, or to sign a record, or to produce a book. In requiring Mr Sigalla to sign the letter addressed to his bank, ASIC was not requiring that he give information, or sign a “record”, or produce a book.

I am prepared to assume the correctness of this argument. Nonetheless, I do not accept that the notice given under s 19(2) did not set out the effect of s 68. The notice correctly said that it was not a reasonable excuse for failure to comply with the notice that giving information, or signing a record, or producing a book, may tend to incriminate Mr Sigalla or expose him to a penalty. That is the effect of s 68. Section 19(3) does not require ASIC to set out more generally the law in relation to privilege against self-incrimination so as to advise a recipient of a notice in what circumstances privilege may be claimed, as distinct from setting out the effect of s 68 which sets out the circumstances in which privilege against self-incrimination may not be claimed.

Accordingly, I do not consider that the email of 19 October 2009 requiring Mr Sigalla to give ASIC reasonable assistance by signing the letter addressed to JPMorgan Chase was given improperly or in contravention of an Australian law. The documents that Mr Sigalla ultimately provided were not improperly obtained.

Even if I am wrong in my conclusion that the notice of 19 October 2009 is valid, nonetheless, the bank statements were not obtained improperly or in contravention of an Australian law, or in consequence of an impropriety or such a contravention. Mr Sigalla was legally represented at the time. His solicitor said that Mr Sigalla was conscious of his obligations under s 19 of the Act. There is no evidence that Mr Sigalla and his solicitor were not aware of what is now said to be his right to claim privilege against self-incrimination as an answer to the requirement to sign the letter. He did not sign the letter. Rather, he expressed his willingness to co-operate with the investigation. It is a result of that willing co-operation that he provided statements of his bank account with JPMorgan Chase.

Had I otherwise been of the view that s 138 was engaged, nonetheless I consider that the desirability of admitting the evidence outweighs the undesirability of doing so. The probative value of the evidence is high. There is unlikely to be any issue as to the accuracy of the bank statements. The evidence is important in relation at least to charge 3 of the Further Amended Interlocutory Process concerning the alleged contempt in relation to payment of school fees. If there were any impropriety or contravention, it was certainly not grave, deliberate or reckless. ASIC could not be criticised for following the form prescribed by the ASIC Regulations. It is true that no other proceeding is likely to be taken in relation to the alleged impropriety or contravention and it is also true that there would have been no difficulty of ASIC obtaining the evidence by a notice given to Mr Sigalla for the production of books to which privilege against self-incrimination would not have been an answer. Weighing all of the factors required by s 138 I do not consider that the evidence ought to be excluded, even if subs 138(1) were engaged. Legislative requirements as to the form of notices under sections 30 and 33

The existence of a power to obtain documents for the purpose of investigating or pursuing charges of contempt and the proper exercise of the power are different matters. Regulation 5 of the ASIC Regulations provides: “ Notice to produce books A notice under section 30, subsection 31(1) or section 32A or 33 of the Act to produce books must be in accordance with Form 2. ”

Form 2 provides: “ Form 2 – Notice requiring the production of books (regulation 5) Australian Securities and Investment Commission Regulations 2001 Australian Securities and Investments Commission NOTICE REQUIRING THE PRODUCTION OF BOOKS To: 1 In relation to 2 you are notified that, under section 30 3 /subsection 31(1) 3 /section 32A 3 /section 33 3 of the Australian Securities and Investments Commission Act 2001 you are required to produce to 4 at 5 on 6 at 7 the following books: 8 Dated 6 . Signature of the person requiring the production of books: _______________________________________________________ 1 insert full name and address of the person to whom the notice is to be given 2 insert the nature of the matter to which the request for production of books relates 3 strike out or delete if inapplicable 4 insert the full name of the person to whom the books are to be produced 5 insert time of day 6 insert date 7 insert full particulars of the address of the place at which the books are to be produced 8 insert description(s) of the books that are to be produced”

Thus, the Regulations require that a notice requiring the production of books is to insert “ the nature of the matter to which the request for production of books relates ”.

Section 25C of the Acts Interpretation Act 1901 (Cth) provides: “ 25C Compliance with forms Where an Act prescribes a form, then, unless the contrary intention appears, strict compliance with the form is not required and substantial compliance is sufficient. ”

This provision applies to the ASIC Regulations by virtue of s 13(1)(a) of the Legislative Instruments Act 2003 (Cth). Counsel for Mr Sigalla submitted that s 25C of the Acts Interpretation Act did not apply and that strict compliance with reg 5 was required for such notices to be valid. Counsel drew the distinction between reg 4 which states that for the purposes of subs 19(2) of the ASIC Act , form 1 is prescribed, and reg 5 which states that a notice under, inter alia , ss 30 and 33 of the Act to produce books must be in accordance with form 2. I do not accept that argument. Although reg 5 does not state that form 2 is “ prescribed ” that is the effect of the regulation. The ordinary meaning of the word “ prescribed ” is that it is a mandate or direction to comply with some requirement. That is achieved by reg 5 providing that a notice under s 30 or s 33 “ must be in accordance with form 2 ”.

Section 251(1) of the ASIC Act provides that: “ 251 The regulations (1) The Governor General may make regulations prescribing matters: (a) required or permitted by this Act to be prescribed; or (b) necessary or convenient to be prescribed for carrying out or giving effect to this Act. ” Regulation 5 was presumably made pursuant to s 251 and is a regulation that “ prescribes ” matters for the purposes of the ASIC Act . Thus the effect of s 25C of the Acts Interpretation Act as applied by s 13 of the Legislative Instruments Act is that the regulation will be complied with if there is substantial compliance with the form.

As appears below, a number of the notices misstated the nature of the matter to which the request for production of books related. In relation to many of the notices, there is a question as to whether ASIC substantially complied with the requirements of reg 5. If not, there is a question as to whether the consequence of non-compliance is that the notices are invalid. I will deal with these questions when dealing with each of the notices. File Notes of ASIC’s Investigation

ASIC’s investigation pursuant to s 13 of the ASIC Act was prompted by a letter dated 10 August 2009 from the solicitors for TZ Limited to the chairman of ASIC. It was alleged that Mr Sigalla had misappropriated very substantial sums of money belonging to TZ Limited by transferring the same to himself or to a company said to be owned by him, BZI Pty Limited. ASIC’s investigation commenced on 14 August 2009. On 14 August 2009 a file note (“s 13 file note”) was created by Mr John Chambers, the leader of ASIC’s investigation. It set out the scope of ASIC’s investigation under s 13 of the ASIC Act . It was subsequently varied on four occasions. The preparation of such file notes, whilst desirable, is not essential to the power to investigate. Nor do such file notes confine the permitted scope of investigation. The file note of 14 August 2009 in its final form read: “ On 14 August 2009, ASIC commenced an investigation (‘the TZ investigation’) pursuant to Section 13 of the ASIC Act regarding suspected contraventions of: (a) Sections 180, 181, 182 and 184 of the Corporations Act 2001 (‘the Act’) which concerns the duties owed by officers and employees of corporations; (b) Sections 590 and 596 of the Act which concerns offences and frauds committed by officers and employees of corporations; (c) Section 1308 of the Act which concerns the making of false and misleading statements by corporations; and (d) Sections 173, 176A, 178BA and 178BB of the Crimes Act, 1900 (NSW), by Mr Andrew Sigalla, Mr John Falconer and Mr Michael Otten, as directors of TZL between 1 April 2004 to 18 June 2009. The TZ investigation also included the investigation of BZI Pty Ltd (‘BZI’) a company associated with Mr Sigalla. ”

Mr Brennan had been given a draft of the file note that was not complete. The draft stated: “ I have reason to suspect contraventions of: (a) Sections 182, 184, 590 and 596 of the Corporations Act 2001 (Cth); and/or (b) Sections 173, 176A, 178BA and 178BB of the Crimes Act 1909 (NSW) in the period 1 April 2004 to 18 June 2009 (‘ the relevant period ’) concerning the affairs of TZ Limited, in particular the conduct of Sigalla, Falconer and Otten as directors at times during the relevant period. ”

Mr Brennan used the incomplete draft of the s 13 file note when completing the notices he issued under s 33 of the ASIC Act .

On 16 November 2009 Mr Chambers’ file note was extended to include the following: “ I continue to have reason to suspect contraventions of A. Sections 180, 181, 184, 208, 259A, 260A, 590, 1041A to 1041C and 1041E and 1041F, 1307, 1308 of the Corporations Act 2001 (Cth); and B. Sections 173, 176A, 178BA and 178BB In the period 1 April 2004 to the 30 June 2009 (‘the relevant period’) concerning the affairs of TZ Limited, in particular the conduct of Sigalla, Falconer and Otten as directors at times during the relevant period. Further suspected contraventions of A. Sections 180, 181, 184, 590, 596 and 1307 of the Corporations Act 2001 (Cth); and B. Sections 176A, 178BA, and 178BB of the Crimes Act 1900 (NSW) In the period 1 April 2004 to 30 September 2009 concerning the affairs of ZMS, in particular the conduct of Sigalla as a director at all relevant times. Further suspected contraventions of i. Sections 63, 64 and 67 of the ASIC Act; and ii. S 1323 (9) of the Corporations Act 2001 (Cth). ”

Sections 63, 64 and 67 of the ASIC Act create offences in respect of non-compliance with requirements made on a person by ASIC under Part 3 of the ASIC Act . Officers of ASIC suspected that Mr Sigalla had not complied with his obligations under Part 3 of the ASIC Act in connection with its investigation and had contravened the orders made on 26 August 2009 in contravention of s 1323(9) of the Corporations Act earlier than 16 November 2009. Mr Chambers suspected contraventions of s 63, 64 and 67 of the ASIC Act by no later than 14 October 2009. Mr Chambers said that there was an informal and gradual extension of the investigation to include suspected contraventions of ss 63, 64 and 67 of the ASIC Act and s 1323(9) of the Corporations Act as different issues emerged over time. The first issue in respect of which ASIC suspected that there may have been a contravention of s 64 of the ASIC Act (which makes it an offence to make false statements in the course of an examination) arose during the course of Mr Sigalla’s examination on 24 September 2009. By the middle of October everyone in ASIC’s investigating team had in mind that the investigation was widened to include suspected contraventions of ss 63, 64 and 67 of the ASIC Act . Mr Chambers said that it was on or around 20 October 2009 that he first suspected that Mr Sigalla had breached the restraining orders and thus suspected a contravention of s 1323(9). Notices Valid Where Issued for Stated Purpose Even if also Issued for Purpose Not Stated

The earliest of the impugned notices is dated 1 September 2009. It was issued to Starwood Pacific Hotels Pty Limited trading as Sheraton on the Park. It was issued by Mr Terry Marks who signed as a delegate of ASIC pursuant to s 33 of the ASIC Act . It required the production of: “ All books relating to any bookings made by, and accommodation provided to Andrew Sigalla, BZI Pty Ltd, and ZMS Investments Pty Ltd between 30 August 2009 to the date of this Notice, including books relating to the payment of such accommodation. ”

The notice described the nature of the matter to which the request for production of books related as: “ In relation to investigation under section 13 of the Australian Securities and Investments Commission Act 2001 (the ASIC Act) regarding the conduct of Andrew John Sigalla (‘ Sigalla ’), John Falconer (‘ Falconer ’) and Michael Otten (‘ Otten ’), now former directors of TZ Limited (ACN 073 979 272) (‘ TZ Limited ’) between 1 April 2004 and 1 July 2009 ... ”

Mr Marks deposed that ASIC was investigating Mr Sigalla’s sources of funds. The investigation was in relation to the allegation referred to above made by solicitors for TZ Limited that Mr Sigalla had misappropriated many millions of dollars. ASIC wished to trace Mr Sigalla’s sources of funds by identifying accounts and funds associated with him and entities associated with him. Mr Marks was aware that upon Mr Sigalla’s return to Australia from New York he was staying at the Sheraton on the Park. As a starting point to identifying funds available to Mr Sigalla, he commenced by establishing the method by which Mr Sigalla was paying for his accommodation. This notice was not issued in order to investigate whether Mr Sigalla had breached orders of the court with the view to possibly instituting proceedings for contempt. In my view it sufficiently stated the nature of the matter to which the request for production of documents related.

In Commissioner of Taxation of the Commonwealth of Australia v Australia and New Zealand Banking Group Limited (1979) 143 CLR 499 the High Court considered the validity of notices issued by a delegate of the Commissioner of Taxation purportedly pursuant to s 264(1)(b) of the Income Tax Assessment Act 1936 (Cth). That section provided: “ 264.(1) The Commissioner may by notice in writing require any person, whether a taxpayer or not, including any officer employed in or in connexion with any department of a Government or by any public authority— ... (b) to attend and give evidence before him or before any officer authorized by him in that behalf concerning his or any other person's income or assessment, and may require him to produce all books, documents and other papers whatever in his custody or under his control relating thereto. ”

The power to require the production of books was conditioned on the books in question relating to a person’s income or assessment. One of the notices in question required a bank to produce all documents in certain safe deposit boxes without stating that the documents in question related to the income or assessment of any person. It was held to be invalid (at 526, 538). Indeed its validity was not pressed. Two other notices addressed to the bank required the bank to attend before an officer of the Taxation Department “ in connexion with the income of and/or the ascertainment of the amount of taxable income and the tax payable thereon ” by named persons and to produce books in the banks custody or under its control “ relating thereto ”, being all books located in named safe deposit boxes. It was held that the notice would be valid if the documents in question did relate to such person’s income or assessment and that the notices were not invalid by reason of their form. A majority of the High Court held that two notices issued to members of the Smorgon family were valid because they sufficiently stated that the documents required to be produced related to the income or assessment of the named persons (at 528, 541-542, 547). Gibbs ACJ said (at 525): “ To be valid a notice to produce documents under s 264(1)(b) must of necessity identify with sufficient clarity the documents which are required to be produced. However the notice must in my opinion go further: it must show the person to whom it is addressed that any document which he is required to produce is one whose production the Commissioner is entitled to require. ” Mason J said (at 537-538): “ As the Commissioner's coercive power to require production is limited, any notice given in exercise of the power must in terms conform to the statutory limitations if it is to be valid. It will in my view conform to those limitations only if it clearly confines the documents to be produced to the class of which the Commissioner is authorized to require production, though it may go on to include particular documents on the footing that they fall within that class. If not so limited, the notice fails on its face to express the limitation which the section places on the Commissioner's authority. Because the exercise of the power casts onerous obligations on the recipient of a notice, and because the recipient (not being the taxpayer) is only justified, vis-à-vis the taxpayer, in producing the taxpayer's documents without his consent in response to a valid demand, it is for the Commissioner so to formulate his notice that this limitation on his authority is drawn to the attention of the recipient. ”

In Australian Securities Commission v Lucas (1992) 36 FCR 165, Drummond J rejected a submission that a notice purportedly given under s 30 of the Australian Securities Commission Act 1989 (Cth) (“ ASC Act ”) was invalid because it was defective in form. The notice stated relevantly: “ In relation to an investigation of QINTEX LIMITED, QINTEX AUSTRALIA LIMITED their subsidiaries and associated corporations and persons or corporations having dealings with the aforementioned you are hereby notified that under Section 30 of the Australian Securities Commission Act 1989 you are required to produce to [xxx] ... the following books ... ”

Sections 28 and 30 were in materially the same terms as at present. His Honour rejected a submission that a notice under s 30 must contain sufficient information to show that it was issued in circumstances in which the Commission had power. His Honour said that s 30 itself identified all the matters that had to be set out in a notice if the notice were to be effective to oblige the recipient to produce documents (at 170). So far as the text of a notice is concerned, s 30 only requires specification of the person to whom books are to be produced, the place and time at which production is required, and the specification of books relating to affairs of the body corporate about which the notice is given. Later His Honour observed (at 175) that: “ Regulation 5 was not referred to in argument, but I do not think it requires any change to the conclusion I have reached as to what are the formal requirements of a valid notice. ” His Honour gave no reason for this statement and did not address the relevance of the then requirement of reg 5 and Form 2 that the notice state the nature of the matter to which the investigation related.

By contrast, in MacDonald v Australian Securities Commission (1993) 43 FCR 466, Davies J held invalid notices purportedly issued by the Australian Securities Commission pursuant to s 30 of the Australian Securities Commission Act . The notices stated that they were issued “ in relation to an investigation of the affairs of Project Equity Finance Limited during the period 2 August 1989 to 12 February 1993 ”.

Davies J held that the notices were invalid as they did not state “ the nature of the matter to which the ASC’s investigations related ” (at 472). His Honour reasoned that to be valid the notice must show the person to whom it was addressed that the documents required to be produced were documents whose production the Commission was entitled to require (at 469-470). His Honour disagreed with the judgment in Australian Securities Commission v Lucas (at 470-472). His Honour referred to Johns v Connor (1992) 35 FCR 1 where Lockhart J considered s 19 of the ASC Act . The section was in materially the same terms as the present s 19. The Commission could give a notice under subs 19(2) if, on reasonable grounds, it suspected or believed that a person could give information relevant to a matter that it was investigating or was to investigate. Subsection 19(3)(a) required the notice to state the “ general nature of the matter referred to in subsection 1 ”. Lockhart J said (at 11): “ Section 13 (of Div 1) tells us what that matter is, namely, whether there may have been committed a contravention of a national scheme law or other law of the Commonwealth or of a State or Territory of the kind mentioned in s 13 or ‘unacceptable circumstances’ within the meaning of Pt 6.9 of the Corporations Law relating to takeovers. That is the matter that the ASC is investigating. The matter is not the fact that the ASC has reason to suspect that there may have been committed a contravention of any such laws; that is the necessary condition that must exist before the ASC may make an investigation pursuant to the authority conferred by s 13(1). ”

After referring to authority his Honour continued (at 12): “ The language of s 19(1) and (3) indicate to me that the ‘matter’ to which they are referring is the subject of the investigation by the ASC; and that is defined by s 13(1) as an investigation by the ASC as to whether a contravention of the kind to which the section is directed may have been committed. It follows that in order to comply with s 19(3) the notice must state the general nature of that matter and the question in this case is whether the notice has done this. ” There the notice stated that it was given “ in relation to an investigation into the affairs ” of a named company. Lockhart J said that the word “ affairs ” was of such a wide import that it did nothing to specify or identify what the investigation was about (at 12-13). His Honour said that the notice must indicate the nature of the matter to be investigated. In concluding that the notice was invalid Lockhart J relied in part upon the fact that the notice “ says nothing about any possible contravention that some company or person may have committed or the particular ‘affairs’ that are the subject of investigation ” (at 14).

In other litigation between the same parties ( Johns v Australian Securities Commission (1992) 35 FCR 146) Black CJ and Von Doussa J said in obiter (at 167): “ In respect of the matters where Ms Megay had reason to suspect that there had been committed contraventions of provisions of the previous law she was empowered by s 13, as a delegate of the ASC, assuming the delegation to have been valid, to make such investigations as she thought appropriate. However those investigations must relate to the question whether there may have been a contravention of the previous law of the kind suspected: Johns v Connor (1992) 35 FCR 1 at 11. If in the course of those investigations the ASC comes to suspect that contraventions of other provisions of the previous law may have been committed the ASC may make such investigation as it thinks appropriate into those matters also, but there is no suggestion that this occurred in the present case. Investigations of the possible contraventions identified by Ms Megay in her memorandum of 13 December 1990 would not empower her to embark on so wide an investigation as that described in the notices requiring appearance at examinations served on Mr Johns and others, that is, to quote from the Notices, ‘ an investigation of the activities of the Tricontinental group of companies for the years 1985 to 1990 inclusive’.”

In MacDonald v Australian Securities Commission Davies J said that a notice under s 30 “ should make it clear to the person on whom it is served that the giver of the notice is undertaking an inquiry which the giver is entitled to undertake and that the documents required to be produced are relevant to that inquiry ” (at 471).

Davies J referred to reg 5 and the then prescribed form which required the Commission to state “ the nature of the matter to which the investigation relates ”.

The present prescribed form does not require a statement of the matter to which the investigation relates, but a statement of the nature of the matter to which the request for production of books relates. That amendment may have been made in recognition of the fact that a notice under s 30 may be exercised for any of the purposes referred to in s 28 and not only for the purposes of an investigation under Division 1.

The point is of potential significance if, as was stated in Lockhart J in Johns v Australian Securities Commission , by Black CJ and Von Doussa J in Johns v Australian Securities Commission , and by Merkel J in Boys v Australian Securities Commission , the power of investigation under s 13 is confined to investigating suspected contraventions of the corporations legislation. If that is so, and if to be valid a notice must state the nature of the matter to which the investigation relates, then it is arguable that to be valid a notice must state the suspected contraventions the subject of the investigation.

I do not agree that once the condition upon which ASIC may undertake an investigation under s 13 is satisfied ASIC is confined to investigating the contravention which it suspects may have been committed, or any other contravention which it might come to suspect has been committed. With respect, that construction does not give effect to the terms of subs 13(1), that where ASIC has a reason to suspect that a contravention may have been committed, it may make “ such investigation as it thinks expedient for the due administration of the corporations legislation ”. Plainly the words quoted are not confined to ASIC’s investigating a contravention which it had suspected or which it might come to suspect. Indeed, the power to investigate is not premised upon ASIC’s having a suspicion of a contravention but having reason to suspect a contravention. There is nothing in the section which limits the scope of the investigation once the power to investigate is enlivened, except that the investigation be what ASIC thinks is expedient for the due administration of the corporations legislation. It is not difficult to envisage cases in which ASIC could lawfully conduct an investigation otherwise than into a suspected contravention of the corporations legislation. One may hypothesise a case where ASIC has reason to suspect that a director or “officer” (as that word is defined in s 9 of the Corporations Act ) has contravened s 180 by not exercising due care and diligence in the exercise of his or her powers. Such a reason to suspect a contravention of s 180 would enliven the power of ASIC to make an investigation under s 13. If that investigation revealed no breach of duty by a director or “officer”, but negligence on the part of an employee of the company (but not an “officer”) which occasioned loss to other persons, it would surely be open to ASIC to think it expedient for the due administration of the ASIC Act that it investigate whether it was in the public interest for ASIC to cause a proceeding to be brought against the company for negligence or recovery of property of a person pursuant to s 50 of the ASIC Act .

I do not consider that the notice is invalid for failing to state the contraventions of the Corporations Act which ASIC had reason to suspect at the time the notice was issued. The “matter” to which the request for production of documents related was the investigation into the conduct of the former directors of TZ Limited as stated in the notice. Unlike the position in Macdonald v Australian Securities Commission , the notice was not required to state the matters into which the investigation related. A fortiori , the notice was not required to specify the contraventions of the Corporations Act which ASIC had reason to suspect.

For these reasons I conclude that the first notice was validly issued. There is no reason to exclude the evidence of Mr Fraser who produced documents pursuant to the notice.

The next notice for production of documents in question was dated 24 September 2009. It was issued by Mr Brennan to National Australia Bank Limited. It stated: “ In relation to suspected contraventions by Andrew John Sigalla (‘ Sigalla ’), John Falconer (‘ Falconer ’) and Michael Otten (‘ Otten ’), now former directors of TZ Limited (ACN 073 979 272) (‘ TZ Limited ’) of (a) Sections 182, 184, 590 and 596 of the Corporations Act 2001 (Cth); and/or (b) Sections 173, 176A, 178BA and 178BB of the Crimes Act 1909 (NSW) in the period 1 April 2004 to 18 June 2009 (‘ the relevant period’ ) concerning the affairs of TZ Limited, in particular the conduct of Sigalla, Falconer and Otten as directors at times during the relevant period. You are hereby notified that, under section 33 of the Australian Securities and Investments Commission Act 2001, you are required to produce to: Conor Brennan at: Level 18, 1 Martin Place, Sydney NSW 2000 on: 30 September 2009 at: 11am the following books; The bank statements of Moon Corporation account [xxx-yyy] [xx-yyy-xxxx] for the period 1 June 08 – Current date. ”

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.

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.

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.

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.

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.

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.

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.

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 .

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).

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.

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.

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.

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.

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]).

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 .

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.

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 ... ”

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.

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

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.

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.

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.

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. ”

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).

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.

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).

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.

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.

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

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.

The evidence obtained pursuant to invalid notices was obtained improperly or in contravention of an Australian law, or in consequence of an impropriety or a contravention of an Australian law. As the argument was opened by counsel for Mr Sigalla, the claim was put on the ground of impropriety, namely that ASIC has acted without power in issuing the notice pursuant to which the evidence was obtained. Correctly, it was not submitted that acting without power was to contravene a law. But issuing notices where there was no power to do so would be improper and the evidence thereby obtained would have been obtained improperly ( Parker v Comptroller-General of Customs [2007] NSWCA 348). As argument developed, the ground of challenge was widened to raise the claim of invalidity based upon the failure to comply with reg 5. I have upheld that ground in relation to the notices referred to above. Evidence obtained pursuant to those notices was obtained in consequence of a contravention of an Australian law because ASIC failed to comply with reg 5. If it were necessary to decide the point I would consider that evidence obtained from the issue of the invalid notices was also obtained in consequence of an impropriety. “Improper” and “impropriety” are not defined. In Parker v Comptroller-General of Customs [2009] HCA 7; (2009) 83 ALJR 494, French CJ said (at [29] and [30]): “[29] The meanings to be accorded to the terms ‘improperly’, ‘impropriety’ and ‘contravention’ in s 138 were not illuminated by the Law Reform Commission report. The relevant ordinary meanings of ‘improper’ include ‘not in accordance with truth, fact, reason or rule; abnormal, irregular; incorrect, inaccurate, erroneous, wrong’. ‘Contravention’ refers to ‘[t]he action of contravening or going counter to; violation, infringement, transgression’. [30] Without essaying an exhaustive definition, the core meaning of ‘contravention’ involves disobedience of a command expressed in a rule of law which may be statutory or non-statutory. It involves doing that which is forbidden by law or failing to do that which is required by law to be done. Mere failure to satisfy a condition necessary for the exercise of a statutory power is not a contravention. Nor would such a failure readily be characterised as ‘impropriety’ although that word does cover a wider range of conduct than the word ‘contravention’ .” His Honour did not give reasons for concluding that a mere failure to satisfy a condition necessary for the exercise of a statutory power would not readily be characterised as “impropriety”. His Honour did observe that ordinary meanings of “improper” include not in accordance with rule or irregular or incorrect. The notices issued in the present case were not in accordance with rule, or were irregular or incorrect. If “improper” or “impropriety” connotes some degree of moral delinquency then that is satisfied in the present case by the carelessness with which the notices were issued. (Clearly there may be an impropriety even though the conduct in question is not deliberate or reckless. Whether it is deliberate or reckless is relevant to the judgment to be made as to whether evidence obtained in consequence of an impropriety should be admitted.)

It follows that evidence obtained from the issue of the invalid notices is not to be admitted unless the desirability of doing so outweighs the undesirability of admitting evidence obtained through the issue of invalid notices.

Counsel for Mr Sigalla pointed to the fact that the issue arising under s 138 in this case did not arise because of some mistake or excessive use of power by a police officer in the field, but by ASIC which has in-house lawyers and should be expected to adhere strictly to any conditions or limitations to which its powers are subject. Counsel stressed “ ... the importance of the courts, not merely by way of a side comment but by way of real force and effect, [not] sanctioning a failure to comply with those conditions particularly on repeated occasions over protracted periods of time ... ”. I accept that that is a material consideration in the exercise of the evaluative judgment called for by s 138.

I turn to the particular matters required to be considered pursuant to subs 138(3). It is here necessary to identify the particular evidence liable to be excluded as having been obtained in consequence of the issue of invalid notices and the particular charges to which that evidence is relevant. The first is the notice of 26 October 2009 addressed to American Express. In the same category is a notice dated 29 January 2010 also issued to American Express. Both notices require production of the American Express statement of a particular numbered account. The notice of 26 October 2009 sought the statement of account for the period from 13 September 2009 to that date. The notice of 29 January 2010 sought the same documents from 20 October 2009 to that date. An earlier notice of 12 October 2009, which is not invalid, had sought the same documents for the period from 1 August 2009 to that date.

ASIC has read two affidavits of a Mr Glen Cameron of American Express. In his first affidavit of 14 December 2009 Mr Cameron annexes the s 33 notice of 26 October 2009. He also annexes a statement of account in the name of Mr Sigalla for the period 18 August 2009 to 13 September 2009. Mr Cameron did not say that the statement of account was produced pursuant to the notice of 26 October 2009. Nor did he make any reference to the earlier notice of 12 October 2009. In his second affidavit Mr Cameron annexed again a copy of the s 33 notice of 26 October 2009 and also annexed a copy of the notice dated 29 January 2010. He annexed copies of the credit card statements for the period from 19 September 2009 to 19 January 2010. Again no reference was made to the first notice of 12 October 2009. Again, Mr Cameron did not say pursuant to what notice American Express produced documents to ASIC.

I infer that American Express produced documents to ASIC as required by each notice. I infer that American Express could have, and did, produce to ASIC the statement of account up to 12 October 2009 as required by the first notice. As that notice was valid, I would not infer that the evidence of the statement of Mr Sigalla’s American Express account as it appears up to 12 October 2009 was obtained improperly or in contravention of an Australian law. However the statements after 12 October 2009 were obtained pursuant to invalid notices and in contravention of reg 5.

Payments to Premier Models and Six Star International disclosed on the American Express card statements relate to periods prior to 12 October 2009, so no question arises under s 138 in respect of those statements.

The evidence of the American Express statement of account for the period after 12 October 2009 is highly probative of the facts alleged in relation to the four charges of contempt numbered 14-17 in the Further Amended Interlocutory Process that Mr Sigalla used his American Express card to pay sums of $660, $1,320, $880 and $880 between 20 and 21 October 2009, to TLC Design Pty Ltd between 20 and 21 October 2009 for the provision of female models or escorts. The statements are also highly probative of charges 23-26 of the Further Amended Interlocutory Process that in November 2009 Mr Sigalla paid sums of $2,310, $3,080, $1,540, $3,080, and $3,465 to TLC Design Pty Ltd for the provision of female models or escorts. They are also highly probative of the charges 29-30 that in November 2009 Mr Sigalla used his American Express card to pay two sums of $660 to Luna Sydney Pty Ltd for the provision of female models or escorts.

So far as I am aware there is no other evidence to be tendered by ASIC to seek to establish the payments by American Express to TLC Design Pty Ltd or to Luna Sydney Pty Ltd.

Whilst the evidence is highly probative and may be critical to ASIC’s ability to proceed with those charges, the charges themselves are at the lower end of the range of seriousness. For present purposes I assume without deciding that payment by credit card for the services of prostitutes would be a breach of the court’s orders. I agree with the submission of counsel for ASIC that it is irrelevant on the present question whether or not there may be a defence based on any ambiguity in the orders. Nonetheless, whilst any contravention of an order under s 1323 is a serious matter, in the context of an investigation into an alleged misappropriation of millions of dollars, the expenditure of a few hundreds or thousands of dollars is at the lower end of seriousness. The charges are less serious than a number of other charges, such as the first charge in relation to the payment to Moon Corporation.

I turn to the gravity of the impropriety or contravention and whether the impropriety or contravention was deliberate or reckless (s 138(3)(d) and (e)). In Parker v Comptroller-General of Customs , Basten JA, with whom the other members of the Court of Appeal agreed, said (at [65]) that: “ ... obtaining evidence in deliberate, wilful or even reckless disregard of an individual’s civil rights is likely to be a strong factor against the exercise of the discretion to admit the evidence. ” By contrast his Honour said (at [60]) that: “ ... if the contravention were accidental or inadvertent and involved no serious contravention of an internationally recognised right, that would tend in favour of admission. ”

There is no suggestion that ASIC through Mr Brennan deliberately contravened the regulation prescribing the form notices under s 33 were to take. Although Mr Brennan was reluctant to accept it, ASIC admits that his procedures were careless. I would not say that Mr Brennan was reckless in the sense that he issued notices not caring whether he had power to do so or not, but he was reckless in the sense that he issued notices not caring whether they accurately stated the matter to which the request for documents related or not.

Both parties referred to the Court of Appeal’s decision in Parker v Comptroller-General of Customs . There the Comptroller-General seized documents pursuant to an invalid warrant. The power to issue a warrant was dependent upon a failure to comply with a requirement of the Collector of Customs under s 214 of the Customs Act to produce and hand over books and documents. The notice under s 214 was admittedly invalid because it failed to specify precisely what documents the person was required to produce ( Parker v Comptroller-General of Customs [2009] HCA 7 at [7]). Basten JA also said that the Comptroller accepted that the notice to produce was inadequate in its specification of the subject matter of the offence ( Parker v Comptroller-General of Customs [2007] NSWCA 348 at [123]). Other challenges to the propriety of the issue of the warrant were rejected. In particular the Comptroller and his officers were acquitted of any wilful disregard of the law, dishonourable or dishonest motives, or improper purposes (at [123]). The Court of Appeal also found that the inadequacy of the notice was not due to deliberate cutting of corners or disregard of legal requirements (at [124]).

In the present case, Mr Stack for ASIC submitted that Parker v Comptroller-General of Customs was a far more serious case than the present case because in that case one of the branches of the Department of Customs was aware of a New South Wales decision that indicated that the course of action proposed would be invalid, but the Department proceeded nonetheless. Mr Stack submitted that notwithstanding that “kind of misconduct”, the material obtained was allowed to be used. That submission echoed the submission of the appellant in Parker v Comptroller-General of Customs, but not the findings of the court (at [113]-[118]). Basten JA observed at [118] that there was no deliberate or reckless disregard of an established constraint on power and that the Customs Department could not fairly be criticised for acting on plausible legal advice supportive of its position. As counsel for Mr Sigalla submitted in the present case, in Parker v Comptroller-General of Customs there was diligence, but there was also error. In the present case, there was error and no diligence in relation to the form of the notice.

Counsel for Mr Sigalla made reference to Article 17 of the International Covenant on Civil and Political Rights, which protects a person from unlawful interference with privacy, but did not elaborate on how that right had been infringed in the present case. (See schedule 2 to the Australian Human Rights Commission Act 1986 (Cth), Article 17.) Nevertheless I think it is clear that demanding information about a person’s financial affairs pursuant to an invalid notice would be contrary to or inconsistent with such a right (s 138(3)(f)).

Section 138(3)(g) requires the court to take into account whether any proceeding has been or is likely to be taken in relation to the impropriety or contravention. In this case there is no likelihood that any proceeding of any kind would be taken against ASIC for failure to comply with reg 5. This gives force to the submission of counsel for Mr Sigalla referred to at para [114] above that the court should not sanction a failure to comply with the conditions for the exercise of ASIC’s powers and should do more than merely observe that the powers were not properly exercised.

Finally, s 138(3)(h) requires the court to take into account the difficulty (if any) of obtaining the evidence without impropriety or contravention of an Australian law. In the present case there would have been no such difficulty. A notice in the proper form could have been given. Counsel for ASIC submitted that this was a reason for allowing the evidence. Contrary to the first submission of Mr Sigalla, here ASIC did not lack power to obtain the evidence. The contravention was only as to the form of notice used in the exercise of the power. On the other hand, counsel for Mr Sigalla submitted that the fact that the evidence could have been obtained lawfully was a reason for excluding the evidence obtained unlawfully. In Bunning v Cross (1978) 141 CLR 54, Stephen and Aickin JJ said (at 79) that a deliberate “ cutting of corners ” would tend against the admissibility of evidence illegally obtained and observed that ease of compliance with the law may sometimes be a point against admission of evidence obtained in disregard of the law. The point was not regarded as significant in that case and in Parker v Comptroller-General of Customs , Basten JA said that the factor will often be treated as either neutral or equivocal (at [61]). I think the factor is equivocal. There would be a stronger case for excluding the evidence if ASIC had no power to issue a notice for it. But the fact that a notice could readily have been given that was within power is a factor for excluding the evidence when no real effort was made to comply with the regulation as to the form the notice was to take.

Considering all these factors, I consider that there is a greater public interest in maintaining the rule of law applicable to the exercise of ASIC’s compulsory powers than in admitting highly probative evidence of the charges presently in question. In so concluding, I have particular regard to the fact that the charges presently in question are at the lower end on the scale of seriousness. In this respect they stand in contrast to the proceedings in Parker v Comptroller-General of Customs which involved unpaid duties of millions of dollars and resulted in penalties of in excess of $10 million. I reject the bank statements produced by Mr Cameron insofar as they cover the period after 12 October 2009.

The next notice I have found invalid was the notice issued by Mr Brennan on 3 November 2009 to St George Bank Limited. It sought trace details for two withdrawals of $20,000 on 20 and 21 August 2009 from an account in the name of ZMS Investments. ASIC reads an affidavit of Ms Glenda McGuiness, an officer of St George Bank. She swore an affidavit on 21 January 2010. Relevantly she annexed a copy of the s 33 notice of 3 November 2009 requiring production of the trace details of the two withdrawals and attached documents including a visa gold card statement for Mr Sigalla and a document from the Bank of South Australia headed “Card Settlements”. ASIC contends that the documents produced show that on 20 and 21 August 2009 two sums of $20,000 were credited to Mr Sigalla’s visa card account from an account of ZMS Investments. These payments are said to be relevant to rebutting justifications said to have been provided by Mr Sigalla for payments which form the basis of, or are relevant to, the charges in paras 31 and 32 of the Further Amended Interlocutory Process referred to at para [8] above.

As stated in para [8] above, charge 32 has not been pressed. Charge 31 alleges a contravention of orders of 3 September 2009 by Mr Sigalla’s causing $52,500 to be paid from his account with St George Bank to his account with JPMorgan Chase Bank in the United States on 9 September 2009 for the purpose of paying his children’s school fees, where it is alleged that he was aware that fees had been paid before 9 September 2009. I infer that ASIC contends that the charge should be understood as charging that the payment was made for the sole stated purpose of paying school fees, when Mr Sigalla was aware that the fees had already been paid. ASIC’s case is that the payment was not made for the purpose of paying school fees.

The relevance of the two payments of $20,000 by ZMS Investments to Mr Sigalla’s visa card account on 20 and 21 August 2009 was explained by Mr Stack in opening as being to rebut an explanation said to have been advanced by Mr Sigalla for the payment. It is ASIC’s case that Mr Sigalla maintained that the payment was made to reimburse his father-in-law, Mr Caplice, for school fees paid by Mr Caplice on Mr Sigalla’s behalf. ASIC will contend that that was not the position, but instead Mr Caplice had paid $52,500 to ZMS Investments on 20 August 2009 and on that and the next day, it is said that ZMS Investments made the two payments of $20,000 credited to Mr Sigalla’s visa card as shown by the documents annexed to Ms McGuiness’ affidavit. ASIC will say that the statement that the payment was in reimbursement of Mr Caplice for Mr Caplice’s having paid school fees was false. It says that Mr Sigalla had himself paid the school fees from his JPMorgan Chase account on 26 August 2009.

The payment of the two sums of $20,000 by ZMS Investments to Mr Sigalla’s visa credit card does not appear to me to have high “probative value”. That is, it does not appear to me to be highly material to a rational assessment of the probability of the existence of a fact in issue. I accept that it will be a fact in issue whether or not Mr Caplice paid school fees on behalf of Mr Sigalla and whether the payment by Mr Sigalla to Mr Caplice was for the purpose of reimbursing Mr Caplice for school fees paid by him. A further fact in issue will be whether Mr Caplice paid $52,500 to ZMS Investments and whether, if it is established that Mr Sigalla paid $52,500 to Mr Caplice, that payment was in reimbursement of a payment made by Mr Caplice to ZMS Investments. What payments ZMS Investments made out of moneys which may have been paid to it by Mr Caplice does not appear to be particularly relevant to the determination of the issue on this charge.

Whilst the charge itself appears to me to be more serious than the charges to which the evidence of Mr Cameron was relevant, I do not consider that the evidence has the same probative value as Mr Cameron’s evidence. Otherwise the same considerations arise under s 138 as arise in relation to Mr Cameron’s evidence. For these reasons and for the reasons I gave in relation to Mr Cameron’s evidence I reject paras 18-22 of the first affidavit of Ms McGuiness of 21 January 2010 and the documents referred to in those paragraphs.

The next invalid notice was issued on 1 December 2009 to St George Bank Limited requiring the production of a bank statement of a Mr Aboud for the period from 1 July 2009 to 30 November 2009. In her second affidavit of 21 January 2010 Ms McGuiness produced the notice and various bank statements and “detail reports” in relation to an account of Mr Aboud.

Counsel for ASIC accepts that these documents are not directly relevant to proof of the contravention of the orders. He submitted that the documents would be relevant to establish the falsity of explanations said to have been provided by Mr Sigalla in relation to payments made on his credit card to Premier Models Sydney for the provision of female models or escorts. In opening the case for ASIC, Mr Stack said that Mr Sigalla had sworn an affidavit in which he deposed that he had not used the services of Premier Models, but that Mr Aboud had done so and used Mr Sigalla’s credit card for that purpose. The evidence of Mr Aboud’s bank statements might be relevant to proving whether he was in Sydney at the relevant time, but I was not referred to any particular part of the bank statements which might be relied upon for that purpose. In opening, counsel for ASIC referred to statements said to have been made by Mr Sigalla as to the use of his credit card by Mr Aboud on the evening of 4 September 2009. The bank statements of Mr Aboud annexed to Ms McGuiness’ second affidavit contained no entries for 4 or 5 September 2009, so that their utility in rebutting any such possible defence is not apparent. Moreover, the charges concerning payment by credit card to Premier Models are at the lower end of the scale of seriousness for the same reasons as given earlier. I do not regard the evidence as being highly probative. Otherwise the same considerations apply in relation to s 138. For these reasons I reject paras 10-15 of the second affidavit of Ms McGuiness sworn on 21 January 2010 and the documents referred to in those paragraphs.

The notice of 14 December 2009 issued by Mr Brennan to St George Bank Limited calls for transaction trace details on a particular numbered account for the period 11 December 2009 to 31 December 2009. In her first affidavit Ms McGuiness produced the notice and produced documents in response to it which she said showed that a particular credit card number was linked to Mr Sigalla’s St George Bank account. The effect of Ms McGuiness’ evidence is that the credit card in question was Mr Sigalla’s credit card and was used by him to withdraw cash of $2,000 at the Randwick TAB on 12 September 2009. Also relevant to this issue is a notice dated 28 October 2009 issued by Mr Brennan to St George Bank which called for: “1. The trace documents in relation to a $2,000 withdrawal from TAB Randwick from account [xxx] 2. The bank statements for account [xxx] for the period 1 September 2009 to current.”

The evidence was that the notice was given for a dual purpose, but the trace documents sought in para 1 of the notice would only have been relevant to the investigation as to whether there had been a contravention of s 1323(9). There was no “dual purpose” which could validate the first part of the notice. In her first affidavit of 21 January 2010 Ms McGuiness produced the notice of 28 October 2009 and provided the trace details showing a $2,000 withdrawal from Mr Sigalla’s credit card account as a cash transaction through the TAB at Randwick on 12 September 2009.

This evidence is relevant to charges 11, 12 and 13 of the Further Amended Interlocutory Process alleging a breach of restraining orders by Mr Sigalla’s allegedly having paid $3,000 to TAB on or about 12 September 2009 to the credit of a betting account in his name, and thereafter on the same day placing five bets totalling $2,750. These are charges 8-13 of the Further Amended Interlocutory Process. These charges are also at the lower end on the scale of seriousness. The evidence is highly probative of the facts relevant to the charges, but having regard to the seriousness of the charges and the other matters referred to previously in these reasons in relation to the exercise of the judgment under s 138, I consider the evidence should be excluded. I reject paras 24-27 of Ms McGuiness’ first affidavit of 21 January 2010, and the documents referred to in those paragraphs.

A further notice was issued by Mr Brennan to St George Bank Limited on 10 February 2010 requiring the production of bank statements for Mr Sigalla’s account for the period from 5 October 2009 to the current date. That notice was also invalid as being given for the sole purpose of investigating or seeking to prove a suspected contravention of the orders. Ms McGuiness’ third affidavit sworn on 18 February 2010 annexed the notice and the statements. It is not clear to me to what charges the bank statements produced in response to the notice of 10 February 2010 are said to be relevant. Prima facie the evidence should be excluded. If counsel can demonstrate that the documents produced in response to that notice have high probative value in relation to one or more of the serious charges, I may allow the evidence. My present view is that the evidence should be excluded.

The same affidavit of Ms McGuiness attached earlier bank statements in response to the second paragraph of the notice of 28 October 2009. Those bank statements included an entry showing an “EFTPOS purchase” of $2,000 at TAB Randwick on 12 September 2009. Although I have excluded other evidence in relation to that payment, the bank statements produced in response to the second paragraph of the s 33 notice issued on 28 October 2009 were not obtained improperly. That part of the notice was valid because it was issued in part for the stated purpose of the investigation into Mr Sigalla’s conduct as a director by attempting to trace funds. Its use on the charges for contempt is permitted. Accordingly, I allow paras 10-12 of Ms McGuiness’ third affidavit.

The notice issued by Mr Brennan on 5 February 2010 (document 22 of exhibit 1) was issued by Mr Brennan to Tabcorp Limited and required the production of all account opening details of Mr Sigalla. This notice was invalid for the reasons previously given. ASIC reads an affidavit of Mr David Watts of Tabcorp Holdings Limited. Relevantly he annexed a copy of a betting summary and report of account operated by Tabcorp for Mr Sigalla. He deposed to the placing of five bets totalling $2,750 on 12 September 2009. This evidence is highly probative of the charges numbered 8-13 of the Further Amended Interlocutory Process. However, those charges are at the lower end of the scale of seriousness. For the same reasons I gave in relation to the evidence of Mr Cameron, this evidence should be rejected pursuant to s 138. I reject the affidavit of Mr Watts.

The last invalid notice was issued by Mr Brennan on 12 February 2010 to the Commonwealth Bank of Australia. It required production of the merchant name of a particular EFTPOS terminal and the bank account statement connected with the EFTPOS terminal and related information. ASIC will read an affidavit of a Mr Rajani Helaluddin sworn on 24 February 2010. He annexed documents showing that the merchant trading name in question was that of Premier Models and that the facility was opened by Mr Chandler. He attached bank statements from Mr Chandler’s account. No submissions were made as to the significance of Mr Helaluddin’s evidence to ASIC’s ability to substantiate its allegations that Mr Sigalla contravened restraining orders by making payments on his credit card to Premier Models. The seriousness of the charges in relation to Premier Models is also at the lower end of the scale. The significance of Mr Helaluddin’s evidence in relation to those charges is not demonstrated. Whilst Mr Helaluddin identifies Mr Chandler with Premier Models, that does not appear in itself to be a relevant matter to the determination of the charges. The attached statement of account of Mr Chandler’s with the Commonwealth Bank does not on its face disclose payments to him from Mr Sigalla. The evidence does not appear to me to be of high probative value. Nor are the charges to which it relates at the higher end of the scale of seriousness. For the same reasons as given previously, I consider that the evidence obtained pursuant to the notice of 12 February 2010 should be rejected pursuant to s 138 of the Evidence Act . I reject the affidavit of Mr Helaluddin.

It is possible that there is other evidence that has been read which, consistently with these reasons, should be excluded. If so, that can be addressed on the resumption of the hearing.

In summary, I reject the statements of Mr Sigalla’s account with American Express after 12 October 2009 produced by Mr Cameron. I reject paras 18-22 and 24-27 of the first affidavit of Ms McGuiness of 21 January 2010 and the documents referred to in those paragraphs. I reject paras 10-15 of the second affidavit of Ms McGuiness of 21 January 2010 and the documents referred to in those paragraphs. Unless ASIC can demonstrate that the documents produced by St George Bank Limited pursuant to the notice dated 10 February 2010 have high probative value in relation to one or more of the more serious charges, I propose to reject the notice of that date and the statements of account annexed to Ms McGuiness’ third affidavit of 18 February 2010 referred to at paras 14-17. I allow paras 10-12 of that affidavit as they relate to documents produced in response to the second paragraph of the notice of 28 October 2009, which I have found to be valid. I reject the affidavits of Mr Watts and of Mr Helaluddin. I will hear counsel further as to whether any other evidence read to date should be excluded consistently with these reasons. Subject to that, I do not exclude any other evidence read by ASIC to date pursuant to s 138 of the Evidence Act .