Federal Court of Australia

Australian Securities and Investments Commission v Merhi [2025] FCA 829

ORDERS

PENAL NOTICE

THE COURT ORDERS THAT:

1. Subject to further order, pursuant to s 1323(1)(k) of the Corporations Act 2001 (Cth) (Corporations Act), until 4.00 pm on 12 December 2025, the defendant be restrained from:

(a) leaving Australia; and/or

(b) attempting to leave Australia.

2. Pursuant to s 1323(1)(j) of the Corporations Act, the defendant forthwith deliver up to the Victoria Registry of this Court:

(a) all passports, visas and other documents permitting international travel in his name which are in his possession, custody or control;

(b) any tickets, reservations, itineraries or other documents in his name concerning any international travel arrangements made for, or falling within, the period commencing on the date of this order and ending on 12 December 2025; and

(c) a copy of any application in his name for a passport, replacement passport, visa or other document permitting international travel made to the authorities of any country in his possession, custody or control or coming into his possession, custody or control on or after the date of this order and before 4.00 pm on 12 December 2025.

3. The documents delivered up to the Victoria Registry pursuant to paragraph 2 above be held by the Victoria Registry until 4.00 pm on 12 December 2025.

4. Pursuant to s 1323(1)(j) of the Corporations Act and s 23 of the Federal Court of Australia Act 1976 (Cth), if the defendant cannot locate any current passport, visa or other document permitting international travel in his name, within 2 days of the service of the order, he will:

(a) give notification to the Australian Passport Office, or other relevant authorities responsible for the issue and control of Australian passports or travel documents, or, in the case of a foreign passport, visa or travel document, the relevant authority responsible for the issue and control of such passports, visas or travel documents, confirming that he has lost his passport, visa or travel document; and

(b) file an affidavit stating that fact and exhibiting a copy of the notification sent.

5. To the extent necessary, the plaintiff have leave to give notice of these orders to:

(a) the relevant authorities that issue and control the use of passports and international travel documents; and

(b) the Australian Border Force.

6. The costs of the plaintiff’s interlocutory application dated 11 June 2025 be reserved.

7. There be liberty to apply.

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

ORDERS

PENAL NOTICE

THE COURT ORDERS THAT:

1. Subject to further order, pursuant to s 1323(1)(k) of the Corporations Act 2001 (Cth) (Corporations Act), until 4.00 pm on 12 December 2025, the defendant be restrained from:

(a) leaving Australia; and/or

(b) attempting to leave Australia.

2. Pursuant to s 1323(1)(j) of the Corporations Act, the defendant forthwith deliver up to the Victoria Registry of this Court:

(a) all passports, visas and other documents permitting international travel in his name which are in his possession, custody or control;

(b) any tickets, reservations, itineraries or other documents in his name concerning any international travel arrangements made for, or falling within, the period commencing on the date of this order and ending on 12 December 2025; and

(c) a copy of any application in his name for a passport, replacement passport, visa or other document permitting international travel made to the authorities of any country in his possession, custody or control or coming into his possession, custody or control on or after the date of this order and before 4.00 pm on 12 December 2025.

3. The documents delivered up to the Victoria Registry pursuant to paragraph 2 above be held by the Victoria Registry until 4.00 pm on 12 December 2025.

4. Pursuant to s 1323(1)(j) of the Corporations Act and s 23 of the Federal Court of Australia Act 1976 (Cth), if the defendant cannot locate any current passport, visa or other document permitting international travel in his name, within 2 days of the service of the order, he will:

(a) give notification to the Australian Passport Office, or other relevant authorities responsible for the issue and control of Australian passports or travel documents, or, in the case of a foreign passport, visa or travel document, the relevant authority responsible for the issue and control of such passports, visas or travel documents, confirming that he has lost his passport, visa or travel document; and

(b) file an affidavit stating that fact and exhibiting a copy of the notification sent.

5. To the extent necessary, the plaintiff have leave to give notice of these orders to:

(a) the relevant authorities that issue and control the use of passports and international travel documents; and

(b) the Australian Border Force.

6. The costs of the plaintiff’s interlocutory application dated 11 June 2025 be reserved.

7. There be liberty to apply.

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

REASONS FOR JUDGMENT

MOSHINSKY J:

Introduction

1 These reasons for judgment deal with two interlocutory applications seeking travel restraint orders.  The applications are made by the plaintiff, the Australian Securities and Investments Commission (ASIC), and are dated 11 June 2025.  The first application is in respect of Ferras Merhi, who is the defendant to proceeding VID 173 of 2025 (the Merhi proceeding).  The second application is in respect of Osama Saad, who is the defendant to proceeding VID 174 of 2025 (the Saad proceeding).  The two proceedings are being case managed together, and the two applications were heard together.  It is therefore convenient to deal with them in one judgment.

2 In brief outline, ASIC seeks orders pursuant to s 1323(1)(j) and (k) of the Corporations Act 2001 (Cth) requiring each of Mr Merhi and Mr Saad to deliver up his passports, visas and other documents permitting international travel to the Court and prohibiting both men from leaving Australia without the consent of the Court until 12 December 2025.

3 Earlier in these proceedings, asset preservation orders (also known as freezing orders) were made in respect of the property of each of Mr Merhi and Mr Saad.  The orders were originally made in February 2025.  They were subsequently extended and remain in place (subject to carve-outs).

4 ASIC’s applications initially came before the Court on 13 June 2025, at which time ASIC sought interim orders.  That part of each application was resolved by consent on the basis that each of Mr Merhi and Mr Saad gave an undertaking to the Court that:

(a) Until the hearing and determination of the final relief sought at paragraphs 8 to 11 and 13 of the interlocutory application or further order varying or removing the undertaking, the defendant will not, without the Court’s consent, leave Australia or attempt to leave Australia.

(b) The defendant will forthwith deliver up to his solicitor all passports, visas and other documents permitting international travel in his name for safekeeping until the hearing and determination of the final relief sought at paragraphs 8 to 11 and 13 of the interlocutory application or further order.

5 At that time, ASIC’s application for final relief in each application was listed for hearing on 15 July 2025, and a timetable was set for the filing of material.

6 At the hearing on 15 July 2025, the parties to the Merhi proceeding relied on the following evidence.  ASIC relied on:

(a) two affidavits of Nicola Gunn, an Acting Senior Manager in ASIC’s Investigation and Enforcement Action team, dated 18 February 2025 and 11 June 2025;

(b) two affidavits of Brody Wons, a lawyer employed by ASIC in its Enforcement and Compliance Team, dated 7 July 2025 and 11 July 2025.

7 Mr Merhi relied on two of his own affidavits, dated 30 June 2025 and 11 July 2025.

8 The parties to the Saad proceeding relied on the following evidence.  ASIC relied on:

(a) two affidavits of Nicola Gunn, dated 18 February 2025 and 11 June 2025;

(b) two affidavits of Brody Wons, dated 7 July 2025 and 11 July 2025.

9 Mr Saad relied on his own affidavit, dated 30 June 2025.

10 In advance of the hearing, the parties filed outlines of submissions (and, in ASIC’s case, supplementary submissions).

11 There was no cross-examination of any of the deponents to the affidavits.

Background facts

Merhi proceeding

12 As set out in [11] of Ms Gunn’s February 2025 affidavit in the Merhi proceeding, ASIC is carrying out the following investigations:

(a) an investigation into suspected contraventions of the Corporations Act and the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) by Mr Merhi;

(b) an investigation into suspected contraventions by lnterprac Financial Planning Pty Ltd  (Interprac) and Interprac’s authorised representatives including Mr Merhi, Venture Egg Financial Services Pty Ltd (Venture Egg Financial Services) and United Financial Advice Pty Ltd (United Financial Advice) trading as Venture Egg (Venture Egg), Rhys Reilly and Rhys Reilly Pty Ltd trading as Reilly Financial (Reilly Financial); and

(c) an investigation into suspected contraventions by Financial Services Group Australia Pty Ltd (FSGA), its authorised representatives and related entities.

13 During the course of the investigations, ASIC has:

(a) conducted searches of ASIC’s databases;

(b) issued various notices for the production of books and records pursuant to ss 19, 30 and 33 of the ASIC Act, and for the provision of written statements under ss 912C and 912E of the Corporations Act;

(c) required relevant individuals to attend compulsory examinations pursuant to s 19 of the ASIC Act;

(d) conducted searches of the Australian Transaction Reports and Analysis Centre’s database;

(e) conducted searches of databases maintained by other government agencies; and

(f) conducted analysis of various bank accounts held by Mr Merhi and entities associated with him, or parties related to Mr Merhi or those entities, to determine the nature and extent of the receipt or disbursement of monies received in connection with the matters being reviewed by the investigations.

14 The investigations are related to a separate investigation that ASIC is conducting into Keystone Asset Management Ltd (in liquidation) (receivers and manager appointed) (Keystone) in relation to the operation and management of the Shield Master Fund (Shield).

15 The investigations are also related to a separate investigation ASIC is conducting into Falcon Capital Limited (Falcon Capital) in relation to the operation of the First Guardian Master Fund (FGMF).

16 Mr Merhi is or has been the:

(a) sole director and shareholder of Cornerstone Strategic Management Pty Ltd (Cornerstone) since December 2020;

(b) sole director and shareholder of Tax E Trust (Tax E) since August 2020;

(c) sole director and shareholder of Venture Egg Financial Services since June 2015;

(d) sole director and shareholder of United Financial Advice since July 2022;

(e) sole director of FSGA since February 2021; Cornerstone was and is the sole shareholder of FSGA;

(f) director of 5 Point Australia Pty Ltd (in liquidation) between 7 October 2024 and 21 November 2024; and

(g) sole director and shareholder of Dawson St Holdings Pty Ltd.

17 In the roles described above, Mr Merhi provided financial advice, and supervised or influenced the provision of advice provided by others, in connection with superannuation monies being invested in Shield and FGMF.

18 In [55] of her February 2025 affidavit, Ms Gunn deals with the volume of clients and funds placed in Shield and FGMF.  In [56] of that affidavit, it is estimated that Mr Merhi and financial advisers associated with Venture Egg and FSGA facilitated the investment of approximately $226 million into Shield and approximately $234 million into FGMF.

19 Ms Gunn’s February 2025 affidavit sets out, in detail, the concerns that ASIC holds about the conduct of Venture Egg and FGSA.  These concerns include:

(a) concerns relating to advice provided by Venture Egg in relation to Shield ([62] and following); and

(b) concerns relating to advice provided by FGSA in relation to Shield and FGMF ([68] and following); and

(c) concerns relating to payments from Shield and FGMF ([84] and following).

20 An updated picture of ASIC’s investigations is provided in Ms Gunn’s June 2025 affidavit in the Merhi proceeding.  In [9] of that affidavit Ms Gunn states that as a result of its ongoing investigations, ASIC:

(a) remains of the view that Mr Merhi may have been involved in acts or omissions that constitute, or may constitute, contraventions of the Corporations Act and the ASIC Act;

(b) remains of the view that Mr Merhi is, or may become, liable to pay money, whether in respect of a debt, by way of damages or compensation or otherwise, or to account for financial products or other property; and

(c) is continuing to investigate Mr Merhi and entities associated with him and wishes to further examine him as part of its ongoing investigations.

21 In [10] of that affidavit, Ms Gunn outlines alleged acts or omissions of Mr Merhi that may constitute contraventions of the Corporations Act and the ASIC Act.

22 As explained in [11] of that affidavit, Mr Merhi may be obliged to repay funds to investors in Shield and FGMF, being aggrieved persons, under various provisions of legislation.

23 Further, as stated in [12] of that affidavit, ASIC is concerned that at least $511,770 from Shield and at least $24.9 million from FGMF that was received by Mr Merhi through Cornerstone, Venture Egg and Tax E may have been misappropriated and that Mr Merhi or those entities may become liable to repay these amounts to investors in Shield and FGMF.

24 Ms Gunn states in [13] of that affidavit that the class of persons who may have a claim against Mr Merhi (aggrieved persons) comprises approximately 6,276 investors in Shield and FGMF advised through Venture Egg or FSGA.

25 Given the above matters, ASIC considers that:

(a) Mr Merhi is critical to its ongoing investigations into these matters; and

(b) the interests of the aggrieved persons are best protected by ensuring that Mr Merhi remains in Australia while he is required to participate in the investigations.

26 In [16] of Ms Gunn’s June 2025 affidavit, she outlines the three investigations being conducted by ASIC that provide the foundation for the present application.  These are: the Merhi investigation; the Interprac investigation; and the FSGA investigation.

27 At [30], and following, of that affidavit, Ms Gunn outlines the current status of those investigations.

28 At [40] of that affidavit, Ms Gunn explains the importance of Mr Merhi to the investigations being conducted by ASIC.  She states:

Mr Merhi is central to the Investigations and may also be relevant to the Related Investigations for the following reasons:

(a)    he was, at the relevant times, the sole director of Venture Egg Services, United Financial Advice, FSGA, Cornerstone and Tax E;

(b)    he is the sole shareholder of Venture Egg Services, United Financial Advice, Cornerstone and Tax E;

(c)    the Entities appear to have operated with blurred lines of staffing and operations, and commonly made use of informal oral agreements between them. For example, it appears that individual human resources at Venture Egg, FSGA, and Middle Man FS Pty Ltd, may have been treated as “departments” of a shared enterprise. See a copy of an email entitled “Department Breakdown (For Ferras)” (in which Mr Merhi is carbon copied) which attaches an excel spreadsheet list of these resources. …; and

(d)    he also appears to have been involved in the operations or affairs of entities that are the subject of the Related Investigations. For example, Mr Merhi appears to have been involved in negotiating agreements on behalf of Indigo with FG Holdings …

29 Ms Gunn estimates that ASIC’s investigations into Mr Merhi will take at least a further six months to complete (but notes that they may take longer).

30 In [43], and following, Ms Gunn sets out matters that ASIC has identified that she says indicate that Mr Merhi:

(a) has overseas business interests;

(b) has not complied with the asset preservation orders; and

(c) is winding down his Australian business interests.

31 However, it should be noted that at the hearing, ASIC said that there is no clear evidence that Mr Merhi is a flight risk.  Insofar as ASIC contends that Mr Merhi did not comply with asset preservation orders, this relates to an alleged failure to disclose certain matters.  Mr Merhi has provided supplementary disclosure affidavits in response to concerns raised by ASIC.

32 ASIC has examined Mr Merhi (pursuant to notices issued under s 19 of the ASIC Act) on 3 May 2024; 17, 18, 19 and 24 June 2025; and 3 and 10 July 2025.  The last of these examinations has been adjourned to 16 September 2025.

33 In Mr Wons’s 7 July 2025 affidavit in the Merhi proceeding, he states at [19] that ASIC intends to conduct further examinations of Mr Merhi following the:

(a) review of the material referred to at [13]-[14] of that affidavit;

(b) interviews of other relevant persons referred to at [33]-[34] of Ms Gunn’s June 2025 affidavit; and

(c) financial analysis referred to at [35]-[36] of Ms Gunn’s June 2025 affidavit.

34 In that affidavit, at [21], Mr Wons provides details as to why ASIC considers Mr Merhi to be important to its investigations.

35 In his affidavit of 11 July 2025 in the Merhi proceeding, Mr Wons refers to and exhibits a copy of a report issued by the liquidators of Falcon Capital.  Also referred to and exhibited is a summary report by the liquidators to provide additional information to persons who invested funds in FGMF.  At [8] of that affidavit, Mr Wons sets out key points from the liquidators’ statutory report.

36 Mr Merhi gives evidence in his June 2025 affidavit that he was born in Australia, is an Australian citizen, and does not hold any other nationality.  He states that he intends to continue to reside in Australia indefinitely.  In [7]-[9] of that affidavit, Mr Merhi provides information about his religious beliefs and reasons for past travel connected to his religious beliefs.

37 In [13] of that affidavit, Mr Merhi details family members that he has in Australia.  In [14], he refers to relatives living in Lebanon and Dubai.  At [15] and following, Mr Merhi describes his family and social activities.

38 At [19], Mr Merhi lists companies and businesses in Australia that he controls or has controlled.  At [20], Mr Merhi provides a list of notices he has received from ASIC.  Mr Merhi states at [21] that he and companies that he controls have always endeavoured to fully comply with ASIC notices.

39 Mr Merhi states at [23] that he intends to fully comply with any further ASIC notices that are served on him or his companies.  He states at [24]-[25] that he has fully cooperated with ASIC’s investigations and intends to continue to fully cooperate.

40 At [32] of his June 2025 affidavit, Mr Merhi refers to business dealings that may require him to travel to the United States.  At [35], Mr Merhi outlines overseas travel that he is considering in the period up to 31 December 2025.  In [36], Mr Merhi gives an undertaking not to leave Australia before 31 December 2025 without first giving ASIC 14 days’ written notice, including details of the travel.

41 In Mr Merhi’s 11 July 2025 affidavit, he responds to ASIC’s evidence to the effect that he did not make full disclosure of his assets.  It is not necessary to make findings on this matter for present purposes.

42 Further, in his 11 July 2025 affidavit, Mr Merhi responds to ASIC’s evidence to the effect that he is winding down his Australian business interests.  Mr Merhi explains at [11] why he has made changes to his business interests.  It is not necessary to make findings about this issue for present purposes.

Saad proceeding

43 At paragraphs [15]-[18] of Ms Gunn’s February 2025 affidavit in the Saad proceeding, she details the investigation being conducted by ASIC.  Initially, ASIC was investigating Aus Super Compare Pty Ltd (in liquidation) (Aus Super Compare).  This investigation was then expanded to include Mr Saad and Atlas Marketing Pty Ltd (in liquidation) (Atlas) (being an entity controlled by Mr Saad).

44 The investigation is related to a separate investigation that ASIC is conducting into the operation and management of Shield, including the conduct of Mr Paul Chiodo and Mr Ilya Frolov.  ASIC is also undertaking an investigation into suspected contraventions by Falcon Capital in relation to the operation and management of FGMF, including the conduct of its director, Mr David Anderson.

45 At [23] and [24] of Ms Gunn’s February 2025 affidavit, she details other related investigations.  These include the investigation in relation to Interprac and its representatives, including Venture Egg Services and United Financial Advice trading as Venture Egg.

46 In the balance of Ms Gunn’s February 2025 affidavit, she details ASIC’s concerns.  These include:

(a) concerns relating to payments from Chiodo Corporation Pty Ltd (Chiodo Corporation) to Atlas (at [65] and following);

(b) concerns relating to payments from First Guardian Holdings Pty Ltd to Atlas (at [69] and following);

(c) concerns relating to payments from Chiodo Corporation to Nohap Pty Ltd (now in liquidation) and to Atlas (at [80] and following); and

(d) concerns relating to unlicensed financial services (at [95] and following).

47 In Ms Gunn’s June 2025 affidavit in the Saad proceeding, she provides an update on the investigation.  Ms Gunn states at [10] that ASIC:

(a) remains of the view that Mr Saad may have been involved in acts or omissions that constitute, or may constitute, contraventions of the Corporations Act and the ASIC Act;

(b) remains of the view that Mr Saad is, or may become liable, to pay money, whether in respect of a debt, by way of damages or compensation or otherwise, or to account for financial products or other property; and

(c) is continuing to investigate Mr Saad and entities associated with him and wishes to further examine Mr Saad as part of its ongoing investigations.

48 In [11] of that affidavit, Ms Gunn outlines alleged acts or omissions of Mr Saad that may constitute contraventions of the Corporations Act and the ASIC Act.

49 As explained in [12] of that affidavit, Mr Saad may be obliged to repay funds to aggrieved persons under various statutory provisions.

50 At [13], Ms Gunn states that the class of persons who may have a claim against Mr Saad (aggrieved persons) comprises approximately 1,324 investors in Shield or FGMF who were referred by Aus Super Compare to financial advice providers.

51 At [15] of that affidavit, Ms Gunn states that given the above matters, ASIC considers that:

(a) Mr Saad is critical to its ongoing investigations into these matters; and

(b) the interests of the aggrieved persons are best protected by ensuring that Mr Saad remains in Australia while he is required to participate in the investigations.

52 At [28] of that affidavit, Ms Gunn details steps that have been taken by ASIC in the course of the investigation.

53 At [31], and following, Ms Gunn details the current status of the investigation.

54 At [42] of that affidavit, Ms Gunn explains why Mr Saad is considered central to the investigation.  She states:

Mr Saad is central to the Investigation and may also be relevant to the Related Investigations for the following reasons:

(a)    he was, at the relevant times, the sole director of Aus Super Compare and Atlas;

(b)    the entities appear to have operated with blurred lines and commonly made use of informal oral agreements …; and

(c)    he also appears to have been involved in the operations or affairs of entities that are the subject of the Related Investigations.

55 At [44] of that affidavit, Ms Gunn estimates that the investigation will take at least a further six months to complete (but notes that they may take longer).

56 At [45] and following, Ms Gunn sets out matters which ASIC says indicate that Mr Saad:

(a) has overseas business interests; and

(b) has not complied with the asset preservation orders.

57 However, it should be noted that at the hearing, ASIC said there is no clear evidence that Mr Saad is a flight risk.  Insofar as ASIC contends that Mr Saad did not comply with asset preservation orders, this relates to an alleged failure to disclose certain matters.

58 ASIC has examined Mr Saad (pursuant to notices issued under s 19 of the ASIC Act) on 9 July 2024, 9 May 2025 and 25 June 2025.  The latter examination has been adjourned to 18 August 2025.

59 In Mr Wons’s 7 July 2025 affidavit in the Saad proceeding he states at [18] that ASIC intends to conduct further examinations of Mr Saad following the:

(a) review of the material referred to at [13]-[15] of that affidavit;

(b) interviews of other relevant persons (referred to at [34]-[36] of Ms Gunn’s June 2025 affidavit); and

(c) financial analysis referred to at [37]-[38] of Ms Gunn’s June 2025 affidavit.

60 In his 7 July 2025 affidavit at [20], Mr Wons provides details as to why ASIC considers Mr Saad to be important to the investigation and related investigations.

61 In that affidavit, Mr Wons states at [30] that ASIC is concerned that Mr Saad is winding down his Australian businesses.  At [33] and following, Mr Wons sets out material about Mr Saad’s overseas business interests.

62 In his affidavit of 11 July 2025 in the Saad proceeding, Mr Wons refers to and exhibits a copy of a report issued by the liquidators of Falcon Capital.  Also referred to and exhibited is a summary report by the liquidators to provide additional information to persons who invested funds in FGMF.  At [8] of that affidavit, Mr Wons sets out key points from the liquidators’ statutory report.

63 Mr Saad gives evidence in his June 2025 affidavit that he was born in Australia, is an Australian citizen and does not hold any other nationality.  He states that he intends to continue to reside in Australia indefinitely.  At [7] and following, he gives evidence about his religious faith and trips he has made overseas by reason of his faith.  At [14], Mr Saad details his family members who live in Australia.  At [15], he refers to members of his extended family who live in Lebanon.  At [16] and following, Mr Saad describes his family and social activities.

64 At [19], Mr Saad refers to Australian companies of which he is the sole director.  At [21], Mr Saad provides a list of notices he has received from ASIC.  Mr Saad states at [22] that he has always endeavoured to fully comply with ASIC notices.

65 Mr Saad states at [24] that he intends to fully comply with any further ASIC notices that are served on him or his companies.  At [25]-[26], he states that he has always fully cooperated with all ASIC investigations and that he intends to continue to fully cooperate with all ASIC investigations.

66 At [27] of his June 2025 affidavit, Mr Saad refers to business dealings that may require him to travel to the United States.  At [29], Mr Saad refers to overseas travel that he is considering in the period up to 31 December 2025.  In [30], Mr Saad gives an undertaking not to leave Australia before 31 December 2025 without first giving ASIC 14 days’ written notice, including details of the travel.

Applicable principles

67 There is no dispute between the parties as to the applicable principles.

68 ASIC’s application is brought under s 1323(1)(j) and (k) of the Corporations Act.  The onus is on ASIC to establish that the requirements of s 1323 are satisfied.

69 The principles were conveniently summarised by O’Callaghan J in Australian Securities and Investments Commission v Guo (No 2) [2024] FCA 251 at [25]-[32]. In those paragraphs, his Honour stated:

25    Section 1323 gives the court power to make a variety of specified orders in the case where an investigation is being carried out under the ASIC Act or the Corporations Act or where a prosecution or civil proceeding has been begun against a person under the Corporations Act.

26    An application under the section may be brought by ASIC or by “an aggrieved person”, being a person to whom the person under investigation (or the subject of a prosecution or civil proceeding) is liable or may become liable in debt or by way of damages or compensation or to account for property.

27    An order under the section may be made only where “the Court considers it necessary or desirable for the purpose of protecting the interests of [the aggrieved] person.”

28    Section 1323(1) relevantly provides that:

(1)    Where:

(a)    an investigation is being carried out under the ASIC Act or this Act in relation to an act or omission by a person, being an act or omission that constitutes or may constitute a contravention of this Act;

…

and the Court considers it necessary or desirable to do so for the purpose of protecting the interests of a person (in this section called an aggrieved person) to whom the person referred to in paragraph (a), (b) or (c), as the case may be, (in this section called the relevant person), is liable, or may be or become liable, to pay money, whether in respect of a debt, by way of damages or compensation or otherwise, or to account for financial products or other property, the Court may, on application by ASIC or by an aggrieved person, make one or more of the following orders:

…

(j)    if the relevant person is a natural person—an order requiring that person to deliver up to the Court his or her passport and such other documents as the Court thinks fit;

(k)    if the relevant person is a natural person—an order prohibiting that person from leaving this jurisdiction, or Australia, without the consent of the Court.

29    As French J (as he then was) explained in Re Richstar Enterprises Pty Ltd (ACN 099 071 968); Australian Securities and Investments Commission v Carey (No 3) (2006) 232 ALR 577; [2006] FCA 433 at [23]-[27]:

The liabilities, actual or potential, to which the section refers, may arise from a contravention of the Corporations Act or under the general law. The court may have regard to known facts and circumstances in assessing their existence and potential existence – Corporate Affairs Commission (SA) v Lone Star Exploration NL (1988) SASR 24 at 31; 14 ACLR 499 at 505. Von Doussa J said in that case:

… the Court may have regard to all the known facts and circumstances, although in a particular case the Court may think it appropriate to consider whether the actual or potential liability is connected in some way with a particular contravention of the [Corporations Act].

There is a variety of ways in which the interests of persons, to whom liabilities may be owed, can be protected by orders made under the section. The nature of the protection can vary according to the nature of the risks assessed. As Palmer J said in Australian Securities and Investments Commission v Mauer-Swisse Securities Ltd (2002) 20 ACLC 1530; [2002] NSWSC 684 at [37]:

… there may be evidence to suggest that fraud has been perpetrated on a large scale and that many of the victims have no or little information about the extent of the fraud, no or little means for their own investigations, and no or little resources to prosecute their own claims. In such a case, the interests of such persons are protected, within the contemplation of s 1323, by enabling ASIC to conduct an investigation for the purpose of identifying the wrongdoers and exposing them not only to penalties under the Corporations Act and other legislation, but also to claims for compensation from the victims themselves.

The orders that can be made under the section are directed, inter alia, to the preservation of assets against which recovery may be sought in the event that liability to an ‘aggrieved person’ is established on the part of a ‘relevant person’. The orders are made in circumstances where ‘an investigation is being carried out’, ‘a prosecution has been begun’ or ‘a civil proceeding has been begun’. That is to say the orders can be made before liability is established and indeed before the evidence necessary to establish liability has been collected. While an application under the section is not interlocutory in an existing criminal or civil proceeding, it is interlocutory in a wider sense. It preserves the status quo and the assets of the relevant person pending the outcome of the investigation, prosecution or civil proceedings which are on foot – Corporate Affairs Commission v Lone Star Exploration NL (No 2) at SASR 30; ACLR 504. At the stage an order is sought the court may not be in a position to identify with precision any particular liability owed by the person the subject of the proposed order. This consideration applies to final orders made under the section as well as to interim orders for which it expressly provides in s 1323(3). The final orders made under the section are necessarily of a temporary or holding character rather than finally disposing of the rights and liabilities of the relevant persons affected by them.

The circumstances in which the court may make orders under s 1323(1) are wide as indicated by the words ‘necessary or desirable … for the purpose of protecting the interests of a person …’. There is an element of risk assessment and risk management in the judgment the court is called on to make. It follows, and has been accepted, that there is no requirement on the part of ASIC to demonstrate a prima facie case of liability on the part of the relevant person or that the person’s assets have been or are about to be dissipated – Corporate Affairs Commission v ASC Timber Pty Ltd (1989) 7 ACLC 467 at 476 (Powell J); Australian Securities and Investment[s] Commission v Adler (2001) 38 ACSR 266; [2001] NSWSC 451 at [7] (Santow J).

The nature and duration of orders made under s 1323(1) can be fashioned by the court to reflect its assessment of any risk of dissipation of the assets of a person under investigation. But their legitimate purposes can go further. The interests of aggrieved persons may be protected not only by orders designed to protect dissipation of assets, but also by orders which create an opportunity for the assets of the person under investigation to be ascertained.

30    It must also be borne in mind that it is a serious matter to restrain a person from travelling internationally. See Australian Securities and Investments Commission v Wiggins (1998) 90 FCR 314 at 320 (Finkelstein J); Australian Securities and Investments Commission; Re Richstar Enterprises Pty Ltd (ACN 099 071 968) v Carey (No 19) (2008) 65 ACSR 421; [2008] FCA 38 at [32] (French J) (“The imposition of restrictions upon a person’s freedom of movement is a serious step not lightly to be undertaken. Such authority as there is on the imposition of such restrictions under s 1323 of the Act mandates caution in imposing them…” (citations omitted))

31    On the other hand, the private right to travel may be outweighed by the public interest in ASIC being able to pursue its investigations, and for the purpose of protecting the interests of the aggrieved persons. See Australian Securities and Investments Commission v Johnston [2009] FCA 1276 at [8] (Siopis J).

32    As Gordon J said in Australian Securities and Investments Commission v ActiveSuper Pty Ltd (No 4) [2013] FCA 318 at [32]:

… the relevant test for the making of an order under sub-ss 1323(1)(j) and (k) is whether such an order is “necessary or desirable”: s 1323(1) of the Act. In deciding whether to grant or extend an order, the Court is required to perform a balancing exercise, weighing the benefit and detriment to the particular defendant against those of the aggrieved persons … Factors relevant to the balancing exercise include:

1.    the importance of protecting investors’ interests …

2.    the length of time that the respondent has been subject to the order …

3.    the risk that the respondent might leave the jurisdiction and not return …

4.    the respondent’s legitimate interests in being allowed to travel …

5.    the length of time for which the matter has been ongoing …

(Internal quotations and citations omitted).

(Emphasis added.)

70 In the present cases, I would highlight the following aspects of the principles:

(a) there is an element of risk assessment and risk management in the judgment the court is called on to make;

(b) it is a serious matter to restrain a person from travelling internationally; and

(c) the private right to travel may be outweighed by the public interest in ASIC being able to pursue its investigations.

71 Further, in considering whether or not to make a travel restraint order, the five factors referred to by Gordon J in Australian Securities and Investments Commission v ActiveSuper Pty Ltd (No 4) [2013] FCA 318 (ActiveSuper) are relevant.

Consideration

Mr Merhi

72 There is no issue that the prerequisite in s 1323(1)(a) is satisfied: an investigation is being carried out by ASIC under the ASIC Act and the Corporations Act into an act or omission by Mr Merhi, being an act or omission that may constitute a contravention of the Corporations Act.

73 The issue to be determined is whether it is necessary or desirable to make travel restraint orders as sought by ASIC for the purpose of protecting the interests of a person to whom Mr Merhi may become liable to pay money.  I will address each of the five factors referred to by Gordon J in ActiveSuper.

74 The first matter is the importance of protecting investors’ interests.  This factor is weighty in the present case, given the scale and nature of potential losses of relevant investors.  A real difficulty lies in understanding the true nature of informal arrangements.  In this regard, the attendance of Mr Merhi at further examinations to be conducted by ASIC is critical.  The unfortunate position is that the documentary material is unlikely to be sufficient to enable the arrangements to be fully understood (see [40(c)] of Ms Gunn’s June 2025 affidavit in the Merhi proceeding and [21] of Mr Wons’s 7 July 2025 affidavit in the Merhi proceeding).  Mr Merhi’s assistance, through the examination process, is therefore critical.

75 The second factor is the length of time that Mr Merhi has been subject to a travel restraint order.  Although the interim part of ASIC’s application was resolved by the giving of an undertaking by Mr Merhi, the practical effect is the same as if Mr Merhi had been subject to a travel restraint order.  Approaching the matter in this way, Mr Merhi has been subject to a travel restraint since 13 June 2025.  That is not a long period of time.  Counsel for Mr Merhi submitted that the investigations have been going on for a long period of time, but that is not the same as Mr Merhi being under a travel restraint for a long period of time.

76 The third matter is the risk that Mr Merhi might leave the jurisdiction and not return.  As noted above, ASIC accepted that there is no clear evidence that Mr Merhi is a flight risk.  Nevertheless, given the circumstances outlined earlier in these reasons, in particular the seriousness of the allegations against Mr Merhi, the scale of the potential losses of the relevant investors, and therefore the scale of the potential claims for damages against Mr Merhi, I consider that there is at least some risk that he may leave and not return to Australia.  I consider that to be the case notwithstanding his strong ties to Australia.

77 The fourth matter is Mr Merhi’s legitimate interest in being allowed to travel internationally.  This is a significant factor that needs to be taken into account and weighs against the making of a travel restraint order.  I consider the period of the proposed travel restraint, namely six months (including the period since 13 June 2025), to be substantial.

78 The fifth matter is the length of time for which the matter has been ongoing.  In relation to this factor, I note that ASIC’s investigations have been on foot for some time.  The material before me does not enable me to make any finding as to whether ASIC’s investigations have taken longer than necessary.  However, I am satisfied that ASIC is actively pursuing the investigations by taking relevant steps including further examinations.

79 Having regard to these five factors, and the facts and circumstances generally, I consider that the travel restraint orders sought by ASIC are appropriate.  The material demonstrates the scale and seriousness of the potential contraventions involving Mr Merhi.  The material also demonstrates that it is critical that Mr Merhi be available for further examination by ASIC as part of the investigations.  While there is no clear evidence of flight risk, it seems inescapable given the facts and circumstances that there is some risk that Mr Merhi may leave and not return to Australia.

80 I do not consider the undertaking proffered by Mr Merhi to provide a reason not to make the order.  Were Mr Merhi to give the 14 days’ notice of intention to travel, the matter would almost inevitably end up back in court, with ASIC then seeking a travel restraint order.  The matter would need to be dealt with on an urgent basis.  In circumstances where the issue has been fully argued, I consider it preferable to deal with the issue now, rather than to postpone it.

81 I would, however, make a small adjustment to the form of orders sought by ASIC.  I propose to insert the words “subject to further order” at the beginning of the primary travel restraint order and to include “liberty to apply” in the orders.  This will make clear that, should circumstances change, or should there be a particular, pressing need to travel, Mr Merhi can approach the Court to seek a variation of the orders.

82 For these reasons, I am satisfied that it is “necessary or desirable” for the purposes of protecting the interests of aggrieved persons to make the travel restraint orders sought by ASIC (with the minor modification I have indicated).

Mr Saad

83 Again, there is no issue that the prerequisite in s 1323(1)(a) is satisfied: an investigation is being carried out by ASIC under the ASIC Act and the Corporations Act into an act or omission by Mr Saad, being an act or omission that may constitute a contravention of the Corporations Act.

84 The issue to be determined is whether it is necessary or desirable to make travel restraint orders as sought by ASIC for the purpose of protecting the interests of a person to whom Mr Saad may become liable to pay money.  I will now address each of the five factors referred to by Gordon J in ActiveSuper in the context of ASIC’s application against Mr Saad.

85 The first matter is the importance of protecting investors’ interests.  This factor is weighty in the present case, given the scale and nature of potential losses of relevant investors.  A real difficulty is understanding the true nature of informal arrangements.  In this regard, the attendance of Mr Saad at further examinations to be conducted by ASIC is critical.  The unfortunate position is that the documentary material is unlikely to be sufficient to enable the arrangements to be fully understood (see [42(b)] of Ms Gunn’s June 2025 affidavit in the Saad proceeding and [20] of Mr Wons’s 7 July 2025 affidavit in the Saad proceeding). Mr Saad’s assistance, through the examination process, is therefore critical.

86 The second factor is the length of time that Mr Saad has been subject to a travel restraint order.  Although the interim part of ASIC’s application was resolved by the giving of an undertaking by Mr Saad, the practical effect is the same as if Mr Saad had been subject to a travel restraint order.  Approaching the matter in this way, Mr Saad has been subject to a travel restraint since 13 June 2025.  That is not a long period of time.  Counsel for Mr Saad submitted that the investigations have been going on for a long period of time, but that is not the same as Mr Saad being under a travel restraint for a long period of time.

87 The third matter is the risk that Mr Saad might leave the jurisdiction and not return.  As noted above, ASIC accepted that there is no clear evidence that Mr Saad is a flight risk.  Nevertheless, given the circumstances outlined earlier in these reasons, in particular the seriousness of the allegations against Mr Saad, the scale of the potential losses of the relevant investors, and therefore the scale of the potential claims for damages against Mr Saad, I consider that there is at least some risk that he may leave and not return to Australia.  I consider that to be the case notwithstanding his strong ties to Australia.

88 The fourth matter is Mr Saad’s legitimate interest in being allowed to travel internationally.  This is a significant factor that needs to be taken into account and weighs against the making of a travel restraint order.  I consider the period of the proposed travel restraint, namely six months (including the period since 13 June 2025), to be substantial.

89 The fifth matter is the length of time for which the matter has been ongoing.  In relation to this factor, I note that ASIC’s investigations have been on foot for some time.  The material before me does not enable me to make any finding as to whether it has taken longer than necessary.  However, I am satisfied that ASIC is actively pursuing the investigation by taking relevant steps including further examinations.

90 Having regard to these five factors, and the facts and circumstances generally, I consider that the travel restraint orders sought by ASIC are appropriate.  The material demonstrates the scale and seriousness of the potential contraventions involving Mr Saad.  The material also demonstrates that it is critical that Mr Saad be available for further examination by ASIC as part of the investigation.  While there is no clear evidence of flight risk, it seems inescapable given the facts and circumstances that there is some risk that he may leave and not return to Australia.

91 For the same reasons as set out earlier (in relation to Mr Merhi), I do not consider the undertaking that has been proffered to provide sufficient reason not to make the travel restraint orders.

92 I would, however, make a small adjustment to the form of orders sought by ASIC.  I propose to insert the words “subject to further order” at the beginning of the primary travel restraint order and to include “liberty to apply” in the orders.  This will make clear that, should circumstances change, or should there be a particular, pressing need to travel, Mr Saad can approach the Court to seek a variation of the orders.

93 For these reasons, I am satisfied that it is “necessary or desirable” for the purposes of protecting the interests of aggrieved persons to make the travel restraint orders sought by ASIC in relation to Mr Saad (with the minor modification I have indicated).

Associate:

Dated:    22 July 2025