The Federal Court has dismissed an application by Provide Nominees Pty Ltd (Provide Capital) to prevent ASIC's further investigation of the entity.
Justice Rofe agreed with ASIC's submission that Provide Capital's application had no prospects of success.
Provide Capital's application alleged that ASIC did not have the state of mind required to conduct an investigation under the Australian Securities and Investments Commission Act 2001 (ASIC Act). Her Honour found that Provide's argument was 'illogical and therefore that Provide Capital's application had no reasonable prospect of success'.
As part of the proceeding, Provide Capital issued a notice to ASIC requesting documents relating to its investigation. Justice Rofe noted in her judgment that, while she did not need to decide on the notice due to the dismissal, 'if I were required to reach a conclusion, I would have set the notice aside on the basis that it is fairly characterised as "fishing" or "trawling" for documents'.
Justice Rofe also ordered that Provide Capital pay ASIC's costs.
ASIC Chair Joe Longo said, 'The outcome in this case demonstrates ASIC's commitment to taking action to prevent its investigations being delayed by baseless challenges to its powers'.
Last month ASIC also successfully defended an appeal in the Full Federal Court, in relation to order made by Justice O'Bryan regarding Provide Nominees failing to respond to a request by ASIC to produce documents (24-047MR).
Background
On 29 March 2022 ASIC commenced a formal investigation in relation to Provide Capital and suspected false and misleading representations or misleading or deceptive conduct. Provide Capital's application to prevent further investigation was filed on 13 December 2023 alleging ASIC did not have reasonable grounds to suspect the contraventions under investigation because ASIC had not prepared an interim report under section 16 of the ASIC Act.
On 31 January 2024 ASIC filed an interlocutory application seeking the summary dismissal of Provide Capital's proceedings stating that whether or not ASIC formed the opinion set out in section 16 of in the course of an investigation cannot establish that ASIC did not and could not hold, another state of mind required by section 13 of the ASIC Act to make an investigation.
On 7 February 2024 as part of their proceedings Provide Capital filed a notice to produce seeking documents relating to ASIC's decision to investigate the matter. On 9 February 2024 ASIC responded by filing an application to have Provide Capital's NTP set aside.
The matter was heard in the Federal Court on 18 March 2024 and the summary judgment dismissing Provide's application was passed down on 27 March 2024.
