ASIC will ‘take steps’ to enforce notice compliance

ASIC cited a ruling in its favour in its case against Maxi EFX, which failed to produce documents in response to an ASIC notice issued to it. Maxi argued that the notice was unclear, that ASIC was not entitled to seek such a broad range of documents, and that certain documents were in the possession of overseas third-party entities.

“In determining that Maxi EFX did not have a reasonable excuse for its non-compliance, His Honour noted that ‘...it is tolerably clear that mere inconvenience and expense would not ordinarily provide a reasonable excuse for non-compliance’,” ASIC said in a statement.

ASIC also cited a Federal Court ruling in its favour in a dispute over client legal privilege, in which the court found that a privilege claim by RI Advice Group could not be upheld. RI had claimed privilege over an internal report, which it claimed had been prepared at the direction of an in-house lawyer and which it had previously produced copies of to ASIC in response to notices issued under section 33 of the ASIC Act.

“Justice O’Callaghan found that RI Advice’s evidence was inadequate to establish that the report was privileged, emphasising that ‘[no] explanation has been given … why RI’s current CEO, who was closely involved in the process that led to the creation of the Third File Review’ did not give evidence,” ASIC said in a statement.

“His Honour found that, even if the report had been privileged, RI Advice would have waived its privilege by previously producing copies to ASIC without objection.”

ASIC sees the two cases as providing more clarity around obligations to comply with ASIC notices and to clearly substantiate claims for legal professional privilege.

“These actions demonstrate that, in appropriate cases, ASIC will take steps to enforce compliance with its notices,” ASIC said.