In the matter of Amanda Young [2018] NSWSC 2012

Supreme Court New South Wales

Medium Neutral Citation: In the matter of Amanda Young [2018] NSWSC 2012 Hearing dates: 20 December 2018 Decision date: 20 December 2018 Jurisdiction: Equity - Corporations List Before: Black J Decision: ORDER made restraining person from leaving Australia. Catchwords: CORPORATIONS – Investigations – ASIC investigations – interim orders restraining departure from Australia. Cases Cited: - ASIC v Ostrava Equities Pty Limited [2015] FCA 425; (2015) 106 ACSR 332 - ASIC v Mauer-Suisse Securities Limited [2002] NSWSC 684; [2002] 20 ACLR 1530 - Australian Securities and Investments Commission v Johnston [2009] FCA 1276 - Australian Securities and Investments Commission v Sino Australia Oil and Gas Limited [2014] FCA 565; [2014] 101 ACSR 115 - Re FGM Print Pty Limited [2018] NSWSC 1983 - Re Richstar Enterprises Pty Limited; ASIC v Carey (No 3) [2006] FCA 453, (2006) 57 ACSR 307 Category: Principal judgment Parties: Australian Securities and Investments Commission (Plaintiff) Amanda Young (Defendant) Representation: Counsel: D Robertson (Plaintiff)

Solicitors: Australian Securities and Investments Commission (Plaintiff) File Number(s): 2018/391481

Judgment – ex tempore (revised 20 december 2018) 1. By Originating Process filed by leave on 20 December 2018, the Plaintiff, the Australian Securities and Investments Commission ("ASIC"), seeks orders under s 1323 of the Corporations Act 2001 (Cth), several sections of the Supreme Court Act 1970 (NSW) and the implied or inherent jurisdiction of the Court, restraining the Defendant, Ms Amanda Young, from leaving or attempting to leave Australia until further order. ASIC also seeks orders that are ancillary to that restraint. Ms Young, by her Counsel, has advised the Court that, without admissions on her part, she consents to the orders sought by ASIC. A copy of the orders, signed by her Counsel on that basis, has been sent to the Court. 2. Nonetheless, ASIC rightly recognises that the Court is being asked to exercise a statutory jurisdiction, in particular under s 1323 of the Corporations Act, and must be properly satisfied that the basis for the exercise of that jurisdiction is established before it makes the orders sought. ASIC relies on the affidavit dated 18 December 2018 of Mr Brendan Caridi, a senior manager with ASIC. Mr Caridi refers to the circumstances in which he became aware of a report made to ASIC by the firm with which Ms Young was previously employed, as to a suspected misapplication by Ms Young of funds held in liquidations. That report appears to have been made to ASIC on or about 11 December 2018. On 14 December 2018, the Court made orders, on the application of partners in the firm with which Ms Young had been associated, replacing her as liquidator of several companies: Re FGM Print Pty Limited [2018] NSWSC 1983. 3. On 18 December 2018, Mr Caridi who is delegated the power to commence investigations under s 13 of the Australian Securities and Investments Commission Act 2001 (Cth), decided that ASIC should commence an investigation under that section into suspected contraventions of Ms Young of certain provisions of the Corporations Act and other legislation arising in respect of her role as liquidator of certain companies. Mr Caridi's evidence is that that investigation is at an early stage, not surprisingly that it has only just been commenced. Mr Caridi indicates ASIC's concern that it may be required to examine Ms Young in the future, in particular, to identify what has happened to the relevant funds. Mr Caridi also notes that Ms Young appears to have been born overseas and, in those circumstances, she may have dual or foreign nationality, and he identifies a risk that she might leave the jurisdiction while investigations are ongoing. In these circumstances, Mr Caridi indicates that ASIC seeks orders under s 1323 of the Corporations Act to restrict Ms Young's travel, while its investigation is ongoing. 4. Mr Robertson, who appears for ASIC in the application, draws attention to the scope of s 1323 of the Corporations Act which relevantly applies where an investigation is being carried out under the ASIC Act or the Corporations Act in relation to an act or omission by a person, being an act or omission that constitutes or may constitute a contravention of the Act. I am satisfied that an investigation is here being carried by ASIC in respect of Ms Young's actions, and that those actions may constitute a contravention of the Act, including s 184 of the Act to which Mr Caridi refers. I do not, of course, express any view beyond recognising the possibility that such a contravention might exist in the relevant circumstances, where ASIC has only recently commenced its investigation and no proceedings have been commenced in which such an allegation is presently advanced. Mr Robertson also rightly draws attention to the authorities that recognise that the power under s 1323 of the Act is to be exercised for the purpose of protecting interests of aggrieved persons, and those interests may be protected, inter alia, by the commencement of regulatory inquiries which may identify persons involved in such conduct and may result in either the imposition of penalties or claims or compensation against those persons: ASIC v Mauer-Suisse Securities Limited [2002] NSWSC 684; [2002] 20 ACLR 1530 at [20], Australian Securities and Investments Commission v Sino Australia Oil and Gas Limited [2014] FCA 565; [2014] 101 ACSR 115 at [9]. Mr Robertson also rightly recognises that, in order to obtain orders under s 1323, ASIC need not necessarily demonstrate a prima facie case of liability on the part of the relevant person, or identify any particular liability owed by that person: Re Richstar Enterprises Pty Limited; ASIC v Carey (No 3) [2006] FCA 453, (2006) 57 ACSR 307 at [35]. That, of course, reflects the fact that the section contemplates that orders may be sought where, for example, an investigation has been commenced and is, as here, in its early stages. There is, however, no doubt that circumstances that Ms Young's conduct is under investigation and that potential claims might be brought against her in respect of that conduct. 5. Mr Robertson points out that the orders which may be made under s 1323 of the Act include, relevantly, an order under s 1323(1)(j) requiring that a person deliver up to the Court his or her passport and such other documents as the Court thinks fit and, in a case of a natural person, an order under s 1323(1)(k) prohibiting that person from leaving Australia without the Court's consent. As Mr Robertson points out, there are several examples where the Court has made orders that prevent persons who are subject to investigations commenced by ASIC from leaving Australia without its consent. Relevant factors were recently summarised in Siopis J in Australian Securities and Investments Commission v Johnston [2009] FCA 1276 at [10]–[12]; ASIC v Ostrava Equities Pty Limited [2015] FCA 425; (2015) 106 ACSR 332 at [18]. 6. I am satisfied that the absence of Ms Young from the jurisdiction would likely adversely affect the conduct of the investigation. I am also satisfied that Ms Young is a person who is of importance to that investigation; the potential contraventions are of a serious character; there is at least some evidence that Ms Young has links with an overseas jurisdiction, although they are perhaps of a historical character; the investigation is at an early stage, but the basis on which it has been commenced is nonetheless clear; and the inquiries made by ASIC may well improve the prospects of recovery by aggrieved persons, particularly if they can identify the manner in which relevant moneys have been applied. I am satisfied that, in these circumstances, the statutory requirements for making the relevant orders are satisfied, and it is necessary or desirable to make the relevant orders under s 1323(1)(j) and (k) of the Act in order to protect the interests of aggrieved persons, where Ms Young's assistance is likely to be required in respect of ASIC's continuing investigation into her conduct, and that investigation could be compromised if Ms Young were to leave Australia while the investigation were ongoing. 7. I note, for completeness, that the orders sought are framed as continuing until further order. I will make an order in that form, where Ms Young, by her Counsel, has consented to an order in that form. In other circumstances, it may be preferable that orders of this character continue for specified time periods, rather than until further order, so that Ms Young would not need to take active steps to displace the continued operation of the order. Mr Robertson has also fairly drawn attention to the fact that one of the orders, which restricts Ms Young from applying the issue of any passport until further order, is not within the categories of orders specified in s 1323 of the Act, although it might well be thought to be ancillary to the orders that are available under that section. I am satisfied that the Court has power to make such an order under its statutory power to grant an injunction under s 66 of the Supreme Court Act 1970 (NSW) and in its inherent jurisdiction. 8. For these reasons, I make orders in accordance with the short minutes of order initialled by me and placed in the file.