New South Wales Supreme Court CITATION : ASIC v Pegasus Leveraged Options Group Pty Ltd & Anor [2002] NSWSC 291 revised - 30/04/2002 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 1739/01 HEARING DATE(S) : 8 April 2002 JUDGMENT DATE : 8 April 2002 Australian Securities and Investments Commission PARTIES : Pegasus Leveraged Options Group Pty Ltd Craig John McKim JUDGMENT OF : Davies AJ at 1 COUNSEL : Mr D R Stack for the Plaintiff Mr J Kintominas for the Defendants, for the limited purpose of applying for adjournment. SOLICITORS : Ms Jan Redfern for the Plaintiff CATCHWORDS : Corporations Act - application for adjournment of proceedings - no question of principle LEGISLATION CITED : Corporations Act 2001 (Cth), s206E Corporations Law DECISION : Application for adjournment refused. - 1 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION Davies AJ Monday, 8 April 2002 1739/01 ASIC v Pegasus Leveraged Options Group Pty Ltd & Anor Judgment – On Application for Adjournment 1 His Honour: This is an application for the adjournment of proceedings which have been set down for five days this week. The principal proceedings concern a managed investment scheme and securities and it is alleged that there have been many breaches of the Corporations Law as incorporated in the Corporations Act 2001 (Commonwealth). 2 Until Friday Mr McKim, who is the second defendant, was represented by a solicitor, Mr Galloway. Mr Galloway represented both the first defendant, Pegasus Leveraged Options Group Pty Limited and the second defendant, Mr McKim. On Friday Mr Galloway's instructions were withdrawn. There is no affidavit before the court as to the circumstances in which that occurred. Mr Galloway was good enough to attend the court this morning but gave no explanation of the circumstances in which his instructions were withdrawn, saying that the matter was the subject of privilege. 3 Counsel who has appeared for Mr McKim today, Mr Kintominas, suggested lack of funds. Whether that was the reason or not is not known. Apparently, Mr McKim is not in court to explain the reason and he has not put on an affidavit. 4 Mr Kintominas has indicated that, in his very brief examination of the matter, which I take to have been a very brief cursory examination of the facts, there did not appear any defence against most of the orders which the plaintiff seeks, that is, the declarations and the orders for winding up. He put the point however, that Mr McKim's future would be very much affected by the disqualification order which has been sought under s206E of the Act. Mr Kintominas said that Mr McKim was concerned about any order that would be made under s206E which would disqualify him from managing corporations. Mr McKim would also be concerned about the orders that are sought by way of permanent restraint under other sections of the law. 5 Mr Kintominas said, and again without any affidavit support, that much would depend upon the circumstances that were found and as to whether it was considered that Mr McKim was dishonest, fraudulent or negligent, or was the dupe of someone else. Mr Kintominas said that a friend of Mr McKim's father was now overseas investigating the issue as to whether money had been sent overseas and was held overseas and could be recovered. 6 Mr Stack for his part has asserted that Mr McKim has given evidence under examination about the money overseas and that, while Mr McKim has alleged that $3.7 million was sent overseas, the plaintiff's investigators found no evidence that any of the money has been so transferred. In any event, there is no evidence before the court as to what Mr McKim's father's friend might be doing or whether Mr McKim's father's friend has the slightest prospect of recovering any moneys that have been sent overseas. 7 In my view, it is desirable that the matter should proceed. It is a lengthy case which has been set down for five days. It is very hard to find five days in the court calendar. It does not seem to me there is adequate explanation as to why Mr McKim withdrew his instructions on Friday or why he is not present today or why he cannot himself appear and put forward to the Court any matter that he wishes to put forward. 8 There is, I think, at least one affidavit on foot which has been tendered and filed by Galloways. That is an affidavit by Mr McKim and it seems to me that, whether or not Mr McKim can afford lawyers, the facts he would wish to put forward to the Court as to the part he played in the loss of moneys is a matter which he could put forward with or without assistance. He can explain without difficulty what he says was the part he took in the proceedings. Insofar as the subjective facts are relevant, Mr McKim could put those forward without being legally represented. I have had cases, quite a number of cases, in which unrepresented persons have appeared, some of them commercial cases of this type. It seems to me that an unrepresented person is generally able to cross examine and to give evidence of the facts that the person considers relevant. 9 For those reasons, without a better explanation as to why Mr McKim is not here or why the trial cannot proceed, it seems to me that I should refuse the adjournment. -oOo- Last Modified: 05/01/2002 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.