Australian Securities and Investments Commission v Empower Invest Pty Ltd [2010] NSWSC 1025

Australian Securities and Investments Commission v Empower Invest Pty Ltd [2010] NSWSC 1025

The undertakings were not varied because the 9 January 2009 email was an explanation for non-compliance, not a request for variation, and ASIC's consent to any variation was not sought or shown. Clause 3.2 imposed absolute obligations on Empower Invest and NPH to refund investors who requested refunds, and the companies failed to do so. Although a court should not make an order that is clearly impossible to comply with, the defendants provided no satisfactory evidence, financial statements, or independent corroboration establishing that compliance was impossible. The Court therefore was not satisfied that an order under s 93AA(4)(a) would be futile and made the declaration and compliance...

Jurisdiction
Australia
Judgment Date
30 August 2010
Procedural Posture
Application Under S 93 AA of the Australian Securities and Investments Commission Act 2001 (cth) for Declarations and Orders Concerning Alleged Breaches of Enforceable Undertakings / Ex Tempore Judgment on Originating Process
Outcome
ASIC's application was granted; declarations and orders under s 93AA(4)(a) were made, with costs orders against the defendants subject to ASIC's undertaking not to enforce them if doing so would adversely affect repayment to investors.
Legal Topics
['enforceable Undertakings' 'unregistered Managed Investment Scheme' 'financial Services Business Without Australian Financial Services Licence' 'orders Under S 93 Aa(4)(a)' 'costs']
['corporations' 'equity'] ['enforceable Undertakings' 'unregistered Managed Investment Scheme' 'financial Services Business Without Australian Financial Services Licence' 'orders Under S 93 Aa(4)(a)' 'costs']

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Procedural Posture

Application Under S 93 AA of the Australian Securities and Investments Commission Act 2001 (cth) for Declarations and Orders Concerning Alleged Breaches of Enforceable Undertakings / Ex Tempore Judgment on Originating Process

Legal Issues

  1. 1 ["Whether the enforceable undertakings had been varied by ASIC's alleged silence after the 9 January 2009 email" 'Whether Empower Invest Pty Limited and Newcastle Palais Holdings Pty Limited breached clause 3.2 of the enforceable undertakings' 'Whether the Court should exercise power under s 93AA(4)(a) to order compliance where the defendants asserted inability to comply' 'Whether costs should be ordered against the defendants']

Ratio Decidendi

The undertakings were not varied because the 9 January 2009 email was an explanation for non-compliance, not a request for variation, and ASIC's consent to any variation was not sought or shown. Clause 3.2 imposed absolute obligations on Empower Invest and NPH to refund investors who requested refunds, and the companies failed to do so. Although a court should not make an order that is clearly impossible to comply with, the defendants provided no satisfactory evidence, financial statements, or independent corroboration establishing that compliance was impossible. The Court therefore was not satisfied that an order under s 93AA(4)(a) would be futile and made the declaration and compliance...

Court Disposition

ASIC's application was granted; declarations and orders under s 93AA(4)(a) were made, with costs orders against the defendants subject to ASIC's undertaking not to enforce them if doing so would adversely affect repayment to investors.

Orders

  • ['Make the declaration in paragraph 1 of the originating process.' 'Make order 2 in the originating process.' "Order the first defendant to pay ASIC's costs of the proceedings up to and including 9 August 2010, and order the second defendant to pay ASIC's costs of the proceedings." 'Note the undertaking of ASIC to...