Australia: ASIC's power to continue civil proceedings

The Federal Court of Australia has given judgment in Carey v Australian Securities and Investments Commission (ASIC) [2008] FCA 963, an interesting decision concerning ASIC's powers under Section 50 of the Australian Securities and Investments Commission Act (2001). The case concerned ASIC's decision to take over proceedings for breach of directors' duites commenced by a liquidator. One of the directors against whom proceedings had been brought, Mr Carey, argued that ASIC did not have the power to continue the action under Section 50. The Federal Court agreed, however, as Finkelstein J. observed (para. 6):

...in the circumstances of this case, the answer is somewhat academic. The parties accept that if Mr Carey’s view prevails ASIC can and will simply begin new proceedings in the name of each plaintiff. Moreover, I have pointed out to the parties that in such event, I would, most likely, make an order deeming each step taken in the existing proceedings to have been taken in the new proceedings"

This said, as Prof. Ian Ramsay has noted, there is a clear case for considering whether ASIC should be permitted to take over some proceedings, not least because of the likely cost savings. 

For further information see:

Background | The judgment | ASIC | Federal Court of Australia |