ASIC v Elm Financial Services Pty Ltd & Ors [2004] NSWSC 306

New South Wales Supreme Court

CITATION : ASIC v Elm Financial Services Pty Ltd & Ors [2004] NSWSC 306 HEARING DATE(S) : 14 April, 2004 JUDGMENT DATE : 14 April 2004 JURISDICTION: Equity Division JUDGMENT OF : Palmer J DECISION : Statements admitted.

CATCHWORDS : CORPORATIONS - EXAMINATIONS - EVIDENCE - ADMISSIBILITY - whether s.76 and s.77 Australian Securities and Investments Commission Act contain a complete code for the admissibility of transcripts of evidence given in examinations. LEGISLATION CITED : - Australian Securities and Investments Commission Act 2001 (Cth) - s.19, s.76, s.77 - Evidence Act 1995 (Cth) - s.75 Australian Securities and Investments Commission - Plaintiff Elm Financial Services Pty Ltd - First Defendant Elm Nominee Services Pty Ltd - Second Defendant Elm Management Services Pty Ltd - Third Defendant Elm Property Developments Pty Ltd - Fourth Defendant Fletcher Securities Pty Ltd - Fifth Defendant PARTIES : E Star Developments Redfern Pty Ltd - Sixth Defendant E Star Developments Surry Hills Pty Ltd - Seventh Defendant Dennis Howell Terracini - Eighth Defendant Andrew Dennis Terracini - Ninth Defendant Duncan Grant McCartney - Tenth Defendant Robert John Kay - Eleventh Defendant Howard Young - Twelfth Defendant FILE NUMBER(S) : SC 2313/04 COUNSEL : D.R. Stack - Plaintiff M.A. Pembroke SC and A. Harding - Defendants SOLICITORS : Jan Redfern - Plaintiff Turks Legal - Defendants

Ex tempore Ruling on evidence

1 Mr Stack, who appears for the Plaintiff ("ASIC") tendered transcripts of the statements of the examinations under s.19 of the Australian Securities and Investments Commission Act 2001 (Cth) ("ASIC Act") of the following Defendants: Dennis Terracini and Howard Young. The tender is made under s.76(1) of the ASIC Act. 2 Mr Pembroke SC, who appears with Mr Harding for the Defendants, opposes the tender on the sole ground that the transcripts are not signed by the examinees or authenticated in any other prescribed manner under the provisions of s.76(3) of the ASIC Act . 3 Sections 76(1) and (3) provide: " Statements made at an examination: proceedings against examinee

(1) A statement that a person makes at an examination of the person is admissible in evidence against the person in a proceeding unless:

(a) because of subsection 68(3), the statement is not admissible in evidence against the person in the proceeding; or

(b) the statement is not relevant to the proceeding and the person objects to the admission of evidence of the statement; or

(c) the statement is qualified or explained by some other statement made at the examination, evidence of the other statement is not tendered in the proceeding and the person objects to the admission of evidence of the first-mentioned statement; or

(d) the statement discloses matter in respect of which the person could claim legal professional privilege in the proceeding if this subsection did not apply in relation to the statement, and the person objects to the admission of evidence of the statement.

…

(3) Where a written record of an examination of a person is signed by the person under subsection 24(2) or authenticated in any other prescribed manner, the record is, in a proceeding, prima facie evidence of the statements it records, but nothing in this Part limits or affects the admissibility in the proceeding of other evidence of statements made at the examination." 4 A Senior Investigator of ASIC, Mr P.J. Thompson, has sworn an affidavit in which he says that he conducted the examinations of each of the relevant Defendants. He says in his affidavit, "Exhibited to me at the time of swearing my affidavit and marked appropriately is a transcript of [the relevant Defendant's examinations] ."

Mr Thompson does not say that the transcript is a true transcript. 5 In an interlocutory application of this character, I think that I can infer from the fact that Mr Thompson himself conducted the examinations and that he exhibits the documents as transcripts of the examinations, that he is stating that the documents are true transcriptions of the statements made by the examinees at the examination. 6 Section 76(3) makes it expressly clear that the subsection does not limit the way in which statements made by an examinee at an examination may be proved in evidence. If a person present at an examination deposes that a document contains a true transcription of the statement made by an examinee, that is one way of proving the statements for the purposes of admission under s.76(1) in an interlocutory application where hearsay evidence is admissible under s.75 of the Evidence Act 1995 (Cth). I admit each of the transcripts of evidence of Dennis Terracini and Howard Young. 7 Mr Stack tendered transcripts of examinations under s.19 of the ASIC Act of persons who are not parties to these proceedings. He made the tender under s.77 of the ASIC Act . That section provides: " Statements made at an examination: other proceedings

Where direct evidence by a person (the absent witness) of a matter would be admissible in a proceeding, a statement that the absent witness made at an examination of the absent witness and that tends to establish that matter is admissible in the proceeding as evidence of that matter:

(a) if it appears to the court or tribunal that:

(i) the absent witness is dead or is unfit, because of physical or mental incapacity, to attend as a witness; or

(ii) the absent witness is outside the State or Territory in which the proceeding is being heard and it is not reasonably practicable to secure his or her attendance; or (iii) all reasonable steps have been taken to find the absent witness but he or she cannot be found; or

(b) if it does not so appear to the court or tribunal – unless another party to the proceeding requires the party tendering evidence of the statement to call the absent witness as a witness in the proceeding and the tendering party does not so call the absent witness." 8 Mr Stack has tendered no evidence in satisfaction of the matters set out in s.77(a). He makes the tender under s.77(b). Mr Pembroke requires Mr Stack to call the examinees. Mr Stack is not able to call them. 9 Section 77(b) makes admissible the statements of absent witnesses made in examinations under s.19 of the ASIC Act unless the witnesses are required to be called and have not been called. The disqualifying condition has occurred in the present case so that the examination transcripts of the persons who are not Defendants are not admissible under s.77(b) and I reject them. 10 Mr Stack tenders evidence of Mr Thompson in which Mr Thompson gives the effect of statements made by an examinee in a s.19 examination. Mr Stack says that the statements, which are clearly hearsay, are admissible pursuant to s.75 of the Evidence Act . Section 75 is in the following terms: " Exception: interlocutory proceedings

In an interlocutory proceeding, the hearsay rule does not apply to evidence if the party who adduces it also adduces evidence of its source." 11 Mr Pembroke says that the statements made in Mr Thompson's affidavit – and I take as a typical example paragraph 85 – are not admissible because they cannot be admitted under s.76 of the ASIC Act nor under s.77. Mr Pembroke says that those two sections, in effect, constitute a complete code as to the admissibility of statements made in the course of an examination. 12 I do not think that this is correct. Section 75 of the Evidence Act provides for a specific circumstance, namely an interlocutory application, in which hearsay evidence is made admissible. Sections 76 and 77 of the ASIC Act do not concern themselves with the admissibility of evidence in interlocutory applications, nor do they specifically concern themselves with the admissibility of hearsay evidence as such. They simply provide a means whereby, in certain circumstances which the sections set out, examination transcripts may be tendered in evidence. I do not think that the fact that a statement may not be admissible under s.76 or s.77 of the ASIC Act necessarily precludes their admissibility in the specific circumstance provided by s.75 of the Evidence Act . 13 I therefore will admit statements as to what was said by various persons at the examinations set out in paragraph 85, 90, 92, 94 and 96 of Mr Thompson's affidavit. – oOo –

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