Australian Securities and Investments Commission v Marco (No 5) [2020] FCA 1512

Australian Securities and Investments Commission v Marco (No 5) [2020] FCA 1512

Leave under s 440D(1)(b) of the Corporations Act 2001 (Cth) should be granted where the proceedings are at an advanced stage, the applicant is a regulator acting in the public interest rather than a private creditor, no substantial prejudice to the administrator or company is shown, and to do otherwise would potentially disadvantage investors whose interests are at stake. The proceedings here warrant displacement of the statutory stay to facilitate final determination.

Parties
Plaintiff: Australian Securities and Investments Commission; First Defendant: Chris Marco; Second Defendant: AMS Holdings (WA) Pty Ltd (Receivers Appointed) (Administrators Appointed) (ACN 164 700 485); Third Defendant: AMS Holdings (WA) Pty Ltd (Receivers Appointed) (Administrators Appointed) (ACN 164 700 485) as Trustee for AMS Holdings Trust; Interested Persons: Cameron Hugh Shaw, Richard Albarran and Marcus Jon Watters of Hall Chadwick
Jurisdiction
Australia
Judgment Date
13 October 2020
Procedural Posture
Corporations Interlocutory Application / Application for Leave to Continue Proceedings Under S 440 D(1)(b) Corporations Act 2001 (cth)
Outcome
Leave granted to ASIC to proceed with proceedings against the second (and if necessary, third) defendant under s 440D(1)(b) of the Corporations Act 2001 (Cth). Costs reserved.
Legal Topics
Application for Leave to Continue Proceedings, Statutory Stay During Administration, Winding Up Proceedings, Administrators' Powers and Duties, Freezing and Receivership Orders
Corporations Law Insolvency Law Application for Leave to Continue Proceedings Statutory Stay During Administration Winding Up Proceedings Administrators' Powers and Duties Freezing and Receivership Orders

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Parties

Australian Securities and Investments Commission

Plaintiff

Chris Marco

First Defendant

AMS Holdings (WA) Pty Ltd (Receivers Appointed) (Administrators Appointed) (ACN 164 700 485)

Second Defendant

AMS Holdings (WA) Pty Ltd (Receivers Appointed) (Administrators Appointed) (ACN 164 700 485) as Trustee for AMS Holdings Trust

Third Defendant

Cameron Hugh Shaw, Richard Albarran and Marcus Jon Watters of Hall Chadwick

Interested Persons

Procedural Posture

Corporations Interlocutory Application / Application for Leave to Continue Proceedings Under S 440 D(1)(b) Corporations Act 2001 (cth)

Legal Issues

  1. 1 Whether leave should be granted to ASIC to continue proceedings against a company under administration under s 440D(1)(b) of the Corporations Act 2001 (Cth)
  2. 2 Whether the statutory stay under s 440D applies to ASIC's substantive claims, including non-winding up relief
  3. 3 Factors relevant to the grant of leave under s 440D(1)(b)

Ratio Decidendi

Leave under s 440D(1)(b) of the Corporations Act 2001 (Cth) should be granted where the proceedings are at an advanced stage, the applicant is a regulator acting in the public interest rather than a private creditor, no substantial prejudice to the administrator or company is shown, and to do otherwise would potentially disadvantage investors whose interests are at stake. The proceedings here warrant displacement of the statutory stay to facilitate final determination.

Court Disposition

Leave granted to ASIC to proceed with proceedings against the second (and if necessary, third) defendant under s 440D(1)(b) of the Corporations Act 2001 (Cth). Costs reserved.

Orders

  • Leave be granted to the plaintiff, pursuant to section 440D(1) of the Corporations Act 2001 (Cth), to maintain Federal Court of Australia proceeding no. WAD 481 of 2018 against the second defendant and, if necessary, the third defendant.
  • Costs reserved.