BHAGAT V. AUSTRALIAN SECURITIES COMMISSION & ANOR [2000] NSWSC 1160

Reported Decision : [2000] 36 ACSR 394

New South Wales Supreme Court

CITATION : BHAGAT V. AUSTRALIAN SECURITIES COMMISSION & ANOR [2000] NSWSC 1160 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 4626/94 HEARING DATE(S) : 16-20 October 2000 JUDGMENT DATE : 13 December 2000

Hari Bhagat - plaintiff PARTIES : Australian Securities Commission - 1st defendant Westpac Custodian Nominees Ltd. - 2nd defendant JUDGMENT OF : Hodgson CJinEq at 1

COUNSEL : Mr. Bhagat appeared in person Mr. N. Hutley SC with Dr. A.S. Bell for defendants SOLICITORS : Australian Government Solicitor for defendants CATCHWORDS : CORPORATIONS - TRUSTS - Unit trusts - Mortgage trust - Trust deed authorising assignment of proportionate shares of mortgages - Amendment of deed to authorise trustee to give priority to assignees - Approval of amendment by Corporate Affairs Commission - Whether duty ofcare to unitholders - Whether breach of that duty - Whether damages shown - Whether ASIC correct defendant - Whether ASIC has statutory defence. LEGISLATION CITED : National Companies & Securities Commisison Act s.41(4) Australian Securities & Investment Commission Act ss.5, 259, 262. DECISION : See end of judgment

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

CORAM: HODGSON, CJ in Eq.

Wednesday 13th December 2000

NO. 4626 OF 1994 BHAGAT V. AUSTRALIAN SECURITIES COMMISSION & ORS.

JUDGMENT

1 As at March 1990, units in four of the six "Estate Mortgage" unit trusts, having a redemption value of just over $1 million, were held by the second defendant Westpac Custodian Nominees Limited in trust for the plaintiff Hari Bhagat. On or about 22nd March 1990, the Victorian Corporate Affairs Commission (CACV) as delegate of the National Companies & Securities Commission (NCSC), approved amendments to the deeds of trust relating to those unit trusts. In these proceedings, the plaintiff claims damages against the third defendant Australian Securities & Investments Commission (ASIC), as successor to the NCSC, on the basis that this approval was in breach of a duty of care owed by the CACV and/or the NCSC to unit holders, resulting in damage to the plaintiff.