Federal Court of Australia

Australian Securities and Investments Commission v MyWealth Manager Financial Services Pty Ltd (No 4) [2025] FCA 400

ORDERS

THE COURT NOTES THAT:

A.    For the purpose of this Order, “Property” means all real or personal property, assets or interests in property of any kind, within or outside Australia including, by virtue of s 1323(2A) of the Corporations Act 2001 (Cth), any property held otherwise than as sole beneficial owner.

THE COURT ORDERS THAT:

1.    Timothy Bryce Norman and Robert Scott Woods of Deloitte Financial Advisory Pty Ltd are released and discharged as receivers and managers of the Property of the fifth, sixth and seventh defendants.

2.    The requirement for service of:

(a)    the interlocutory process filed 9 December 2024; and

(b)    the affidavit of Timothy Bryce Norman filed 9 December 2024;

upon the fifth, sixth and seventh defendants be dispensed with.

3.    There be no order as to costs.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

DERRINGTON J:

Introduction

1    These are the amended and revised reasons for judgment given on 10 April 2025, in respect of an application for the release and discharge of the receivers and managers of the property of certain defendants. Whilst the following reasons refine and develop those that were delivered ex tempore, the substance of what was said on 10 April has not been changed nor has any other material change been made: Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs v AAM17 (2021) 272 CLR 329, 344 – 345 [30] – [31].

Background

2    This matter first came before the Court in 2019. At that time, the gravamen of the concerns of the Australian Securities and Investments Commission (ASIC) was that the defendants were carrying on financial services businesses without an Australian Financial Services Licence and, indeed, were operating an unregistered managed investment scheme: see Australian Securities and Investments Commission v MyWealth Manager Financial Services Pty Ltd (No 3) (2020) 146 ACSR 270, 271 [2] (ASIC v MyWealth (No 3)).

3    Several interlocutory orders were made in the course of that proceeding: see, eg, Australian Securities and Investments Commission v MyWealth Manager Financial Services Pty Ltd [2019] FCA 2081; Australian Securities and Investments Commission v MyWealth Manager Financial Services Pty Ltd (No 2) [2019] FCA 2107 (ASIC v MyWealth (No 2)). One such order effected the appointment, on 13 December 2019, of Mr Timothy Norman and Mr Robert Woods of Deloitte Financial Advisory Pty Ltd as receivers and managers to the property of the fifth, sixth and seventh defendants (being Mustafa, Mahek and Mubashir, respectively). That appointment was extended in November 2020, by dint of s 1322(4)(d) of the Corporations Act 2001 (Cth) (the Act), “until further order”.

4    The application now before the Court seeks orders releasing and discharging Messrs Norman and Woods from their appointment. Incidental orders are also sought vis-à-vis service of (a) the interlocutory process by which that application is made; and (b) an affidavit of Mr Norman filed 9 December 2024 (the Norman Affidavit), upon Mustafa, Mahek and Mubashir. For the reasons that follow, the orders sought should be granted.

Release and discharge of receivers and managers

Standing to bring the application

5    Mr Norman and Mr Woods were appointed, upon the application of ASIC, as the receivers and managers to the property of Mustafa, Mahek and Mubashir pursuant to the power conferred upon the Court by s 1323(1)(h)(i) of the Act. Section 1323(5) relevantly provides that:

(5)    Where the Court has made an order under this section on a person’s application, the Court may, on application by that person or by any person affected by the order, make a further order discharging or varying the first mentioned order.

6    It follows that ASIC is entitled to apply, as they now do, for the discharge of the appointment of the receivers and managers under s 1323(5) of the Act.

Should release and discharge be granted?

7    Upon their appointment in late 2019, the receivers and managers were tasked with:

(1)    identifying, collecting and securing the Property of the fifth, sixth and seventh defendants held for the purposes of the Unregistered Scheme;

(2)    ascertaining the amount of the Investor Funds received by the fifth, sixth and seventh defendants;

(3)    identifying any dealings with, payments of, or distributions by or uses made of the Investor Funds by the fifth, sixth and seventh defendants;

(4)    identifying any Property purchased or acquired with Investor Funds;

(5)    recovering the Investor Funds; and

(6)    providing a report to the Court, by the close of business on 31 January 2020, in relation to the matters referred to in subparagraphs (1)–(5).

8    Some five-and-a-half years have since passed. Mr Norman, in the Norman Affidavit, deposes to the recovery of some $4,000 from Mustafa (such amount being wholly absorbed by existing legal fees). No recoveries have been made in respect of Mahek and Mubashir and, indeed, no further recoveries are anticipated. Mr Norman notes the Court has been furnished with a report that identified, inter alia, the known property and assets of the fifth to seventh defendants on 31 January 2020. He now indicates that he and Mr Woods have concluded their investigations and finalised all matters relevant to the receivership at hand.

9    On the material before the Court, there is no reason to doubt that conclusion. Nor is there any reason to doubt that the purposes behind the appointment of Messrs Norman and Woods to the assets of Mustafa, Mahek and Mubashir have been fulfilled and carried out to the fullest extent that they can be. There is no utility in their continuing, and it is appropriate that orders be made releasing and discharging Mr Norman and Mr Woods from further duties.

Service under the Federal Court Rules 2011 (Cth)

10    There is, however, one slight difficulty that this matter throws into question, being in relation to service of the interlocutory application and Norman Affidavit as required by rule 17.01(2) of the Federal Court Rules 2011 (Cth) (the Rules). That rule provides that any party who files an interlocutory application, being ASIC at present, “must serve the interlocutory application and any accompanying affidavit on any other party at least 3 days before the date fixed for the hearing”.

11    In this context, counsel for ASIC, Mr Seefeld, made the following observations:

(1)    By reason of rules 5.02 and 11.01 of the Rules, parties to a proceeding are required to file an address for service which includes, inter alia, a physical address for service. It may be added that that obligation is important to facilitate the exchange of documents, promote the efficient carriage of litigation: see, eg, Zuckerman et al, Zuckerman on Australian Civil Procedure (LexisNexis, 2nd ed, 2023) [5.47]: and “assist the Court’s task as a finder of fact when the validity of service of a document is in issue”: CPJ17 v Minister for Immigration and Border Protection (2018) 258 FCR 495, 508 [88].

(2)    Where a document is not required to be served personally:

(a)    it may be served by sending the document by pre-paid post addressed to the person to be served at their “proper address” (rule 10.31(b) of the Rules).

(b)    the filing of the document will constitute service of the document if the person to be served does not have a current address for service (or has not otherwise filed an address for service) and the document was sent to the person’s “proper address” and there is proof of non-delivery (rule 10.25 of the Rules).

(see, eg, Clean Energy Regulator v MT Solar Pty Ltd (No 3) [2013] FCA 1326, [38] (MT Solar)).

(3)    Schedule 1 of the Rules defines “proper address”, for a person who has no address for service, as “the person’s usual or last-known business or residential address”.

(4)    Rule 1.34 of the Rules provides that the Court “may dispense with compliance with any of the Rules”. That language imparts no general test, save that the Court ought to do what justice appears to require: Dowling v Fairfax Media Publications Pty Ltd (No 2) [2010] FCAFC 28, [61] citing Rishmawi v Minister for Immigration and Multicultural Affairs [1999] FCA 611, [7].

12    The difficulty in the present case is that Mustafa, Mahek and Mubashir are not domiciled within Australia and do not have, at least to the best of ASIC’s understanding, a current address for service. That being so, attempts have nonetheless been made to effect service of the present application and Norman affidavit upon them.

13    The extent of those attempts are detailed at length in the affidavit of Mr Jarrah Nicholson of 8 April 2025. Mr Nicholson deposes to having obtained the postal and email addresses of the fifth and seventh defendants that were held by the Securities and Exchange Board of India (SEBI), current as at May 2024. No such information was gleaned vis-à-vis the sixth defendant.

14    On 18 March 2025, Mr Nicholson sent the present interlocutory application and Norman Affidavit to (a) the email addresses of Mustafa and Mubashir (as provided by SEBI); (b) the postal addresses of Mustafa and Mubashir (as provided by SEBI) by international express post; (c) the last known email address of Mahek; and (d) the postal address of Mahek (as held by Mr Norman and Mr Woods) by registered post. As at 8 April 2025, searches of the relevant tracking numbers revealed that the posted documents were yet to be delivered or were otherwise awaiting collection; that is, the documents remained with the relevant postal agent.

15    Against that background, ASIC mounts the submission that the addresses provided by SEBI (for the fifth and seventh defendants) and the receivers and managers (for the sixth defendant) are the “proper addresses” of Mustafa, Mahek and Mubashir such that the sending of the present application and Norman Affidavit to those addresses, and proof of their “non-delivery” on 8 April 2025, is sufficient to satisfy the terms of rule 10.25 of the Rules and thereby deem those documents to have been served upon the defendants when they were filed in December 2024.

16    There is much force in that view. That being so, given the proof of non-delivery relied upon by ASIC for the purposes of rule 10.25(c) is indeterminate – being evidence that the relevant documents simply remain in transit: cf MT Solar, [38] – the more appropriate way to proceed on the present application is to exercise the power of the Court under rule 1.34 of the Rules.

17    That conclusion, it should be added, is without any degree of criticism of the attempts made by the receivers and managers and ASIC to appropriately effect service. ASIC has gone above and beyond that required to bring notice of the proceedings to the attention of Mustafa, Mahek and Mubashir and, indeed, it is more probable than not that those efforts have roused in them an awareness of the present state of these proceedings. More importantly, it is lucidly apparent, as it was some five years ago, that those defendants have no interest in the proceedings: ASIC v MyWealth (No 3), 271 [1]. Nor do they have any readily ascertainable interest in resisting the present application.

18    In those circumstances, justice – whatever that term means: see Clancy v Australian Securities and Investments Commission [2025] FCA 220, [28] – [32]: – would seem to compel that the requirement for service be dispensed with by reason of rule 1.34. That being so, it is of no consequence that the present application was heard (and determined) in the absence of Mustafa, Mahek and Mubashir: rule 17.04(c) of the Rules. As such, I will make the orders proposed.

Associate:    

Dated:    23 April 2025

SCHEDULE OF PARTIES