ASIC has been ordered to provide documents in relation to five dealer groups, including AMP Financial Planning and Count Financial, as part of a renewed legal battle with failed financial services group Chapel Road.
On 16 May, NSW Supreme Court judge Justice Schmidt called on the corporate regulator to provide emails, correspondence, files, contracts, reports, and memoranda on AMP Financial Planning, Count Financial, Financial Wisdom, Greater Western Financial Services and Grosvenor Securities during the period of June 1998 to June 2002.
The order comes as Chapel Road mounts a new legal bid to amend its October 2010 statement of claim in relation to its treatment during the corporate regulator’s investigation into the group.
Chapel Road alleges that ASIC failed to provide it with the necessary “feedback, information and/or reports” required to avoid its Australian financial services licence (AFSL) being revoked and the group going out of business.
Chapel Road claims such documents, however, were provided to the five other dealer groups who were allegedly also being investigated by ASIC at the time, and that enforceable undertakings were agreed to rather than AFSL removals.
“[Chapel Road] also wishes to pursue a case that at the same time [ASIC] treated others involved in similar breaches by encouraging them to take steps which [Chapel Road] also undertook and accepting from them enforceable undertakings,” Court documents said.
“Thereby [Chapel Road] wishes to establish that the differential treatment was undertaken maliciously, with the result that it had to cease trading and was unable to recommence trading, even when the AAT [Administrative Appeals Tribunal] restored its license some 26 months later.”
Despite ASIC’s legal representatives labelling Chapel Road’s request as merely a “fishing exercise”, Justice Schmidt believed the provision of the documents would perhaps build a case for ASIC to answer.
“On the material now before the Court, I am satisfied that the discovery sought is relevant to what is presently in issue between the parties, and may throw light on the cases which they presently advance on their pleadings.”
Chapel Road recommenced its document discovery proceedings against ASIC in October last year.
The proceedings follow a two-year legal battle by Chapel Road to seek access to third-party documents.
In 2001, ASIC revoked Chapel Road’s AFSL after a 2000 investigation found it had breached its licence conditions and questioned its ability to conduct business efficiently, honestly and fairly.
