ASIC v Elm Financial Services Pty Ltd & Ors (No 2) [2004] NSWSC 335

ASIC v Elm Financial Services Pty Ltd & Ors (No 2) [2004] NSWSC 335

On the evidence available, there is cause for concern that funds solicited from the public may not be used as represented. Asset preservation orders are justified up to the date of the contested interlocutory hearing to protect investors, as urgency and preliminary evidence warrant interim protection. Compliance orders should be particularised to specific breaches and not made in overly broad terms. There was insufficient evidence to warrant continuation of the Mareva injunction.

Jurisdiction
Australia
Judgment Date
14 April 2004
Procedural Posture
Civil / Interim Orders—interlocutory Application
Outcome
Interim asset preservation orders continued; Mareva injunction not continued; compliance orders not continued in current broad form but invitation for more specific application; directions for affidavits and interlocutory hearing; costs reserved.
Legal Topics
['fundraising' 'interim Orders' 'investment Schemes' 'disclosure Requirements' 'asset Preservation' 'injunctions']
['corporations'] ['fundraising' 'interim Orders' 'investment Schemes' 'disclosure Requirements' 'asset Preservation' 'injunctions']

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Procedural Posture

Civil / Interim Orders—interlocutory Application

Legal Issues

  1. 1 ['Whether interim asset preservation and compliance orders are justified' 'Whether ASIC has established basis for asset preservation injunctions' 'Whether compliance orders should be continued and in what form' 'Whether Mareva injunction is warranted' 'Breach of disclosure requirements under Corporations Act']

Ratio Decidendi

On the evidence available, there is cause for concern that funds solicited from the public may not be used as represented. Asset preservation orders are justified up to the date of the contested interlocutory hearing to protect investors, as urgency and preliminary evidence warrant interim protection. Compliance orders should be particularised to specific breaches and not made in overly broad terms. There was insufficient evidence to warrant continuation of the Mareva injunction.

Court Disposition

Interim asset preservation orders continued; Mareva injunction not continued; compliance orders not continued in current broad form but invitation for more specific application; directions for affidavits and interlocutory hearing; costs reserved.

Orders

  • ['Asset preservation orders (paragraphs 7 and 8 of orders made 6 April 2004) continued up to 4pm on 20 April 2004.' 'Defendants directed to file and serve affidavits by 4pm on 16 April 2004.' 'Plaintiff directed to file and serve reply affidavits by 4pm on 19 April 2004.' 'Plaintiff’s interlocutory process stood...