FEDERAL COURT OF AUSTRALIA Australian Securities and Investments Commission v Storm Financial Limited (Receivers and Managers Appointed) (In Liq) (No 3) [2011] FCA 1084 Citation: Australian Securities and Investments Commission v Storm Financial Limited (Receivers and Managers Appointed) (In Liq) (No 3) [2011] FCA 1084 Parties: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION v STORM FINANCIAL LIMITED (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) ACN 064 804 691, COMMONWEALTH BANK OF AUSTRALIA ACN 123 123 124, BANK OF QUEENSLAND LIMITED ACN 009 656 740 and MACQUARIE BANK LIMITED ACN 008 583 542 File number: QUD 577 of 2010 Judge: REEVES J Date of judgment: 2 August 2011 Date of hearing: 2 August 2011 Place: Brisbane Division: GENERAL DIVISION Category: No Catchwords Number of paragraphs: 3 Counsel for the Plaintiff: Mr R Derrington SC Solicitor for the Plaintiff: Australian Securities and Investments Commission Counsel for the Second Defendant: Mr AJ Payne SC Solicitor for the Second Defendant: Clayton Utz Counsel for the Third Defendant: Mr A Crowe SC with Mr Jones Solicitor for the Third Defendant: HWL Ebsworth Lawyers Counsel for the Fourth Defendant: Mr D Kelly Solicitor for the Fourth Defendant: Allens Arthur Robinson IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 577 of 2010 BETWEEN: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION Plaintiff AND: STORM FINANCIAL LIMITED (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) ACN 064 804 691 First Defendant COMMONWEALTH BANK OF AUSTRALIA ACN 123 123 124 Second Defendant BANK OF QUEENSLAND LIMITED ACN 009 656 740 Third Defendant MACQUARIE BANK LIMITED ACN 008 583 542 Fourth Defendant JUDGE: REEVES J DATE OF ORDER: 2 AUGUST 2011 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. There be no order for costs on the three notices of motion 2. Australian Securities and Investments Commission pay the second, third and fourth defendant's costs of and incidental to their application to amend the proceedings, including the cost of the hearing on 8 June 2011. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011 IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 577 of 2010 BETWEEN: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION Plaintiff AND: STORM FINANCIAL LIMITED (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) ACN 064 804 691 First Defendant COMMONWEALTH BANK OF AUSTRALIA ACN 123 123 124 Second Defendant BANK OF QUEENSLAND LIMITED ACN 009 656 740 Third Defendant MACQUARIE BANK LIMITED ACN 008 583 542 Fourth Defendant JUDGE: REEVES J DATE: 2 AUGUST 2011 PLACE: BRISBANE REASONS FOR JUDGMENT 1 As must be apparent from my reasons, I consider the plaintiff avoided the central issue in the strike-out applications by the three Banks by recasting its proceedings to make them into regulatory proceedings against the three Banks under s 1324. It did that with its amendment on 8 June. Prior to that, as I have found in my reasons, the proceedings were not being pursued as regulatory proceedings in relation to the three Banks at all. They were being pursued as compensation proceedings for Storm investors under s 1325(2) and (3). 2 Because of that change in the thrust of the proceedings, I was not able to decide what was the central issue in the strike-out applications, namely the arguments surrounding the construction of s 1325, including the two-step process, and whether or not the declarations sought gave rise to a real and existing controversy. That was clearly the central issue in the proceedings. 3 Where the central issue in proceedings is not determined, the normal situation is that there be no order for costs. In this particular matter, I think that is the appropriate course, with this exception. I consider that the three Banks are entitled to their costs of and incidental to ASIC's application to amend, including the hearing on 8 June. The whole of that day was devoted to argument about the amendment application, so the orders I make are: that there be no order for costs on the three notices of motion, and that the plaintiff pay the second, third and fourth defendant's costs of and incidental to their application to amend the proceedings, including the cost of the hearing on 8 June 2011. I certify that the preceding three (3) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Reeves. Associate: Dated: 1 September 2011