Federal Court of Australia

Palmer v Australian Securities and Investments Commission [2025] FCA 1025

ORDERS

THE COURT ORDERS THAT:

1.    The interlocutory application of the first respondent dated 14 July 2025 is dismissed.

2.    Leave is granted to the applicant to further amend in the form of the Second Further Amended Statement of Claim, as attached to his written submissions dated 19 August 2025, to be filed by 4pm on 2 September 2025.

3.    The proceeding is adjourned for case management to 10.15 am on 5 September 2025.

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

REASONS FOR JUDGMENT

MCELWAINE J:

1    The applicant, Mr Clive Frederick Palmer, is concerned with whether his compulsory examinations pursuant to s 19 of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) conducted on 24 and 25 October and 1 November 2017 were lawful.

2    At a high level of abstraction, this proceeding raises two issues. One, whether the Australian Securities and Investments Commission (ASIC) (the first respondent) determined to exercise the power to require Mr Palmer to attend a compulsory examination at a time when it had already formed the view, or objectively it should have then been apparent, that he may have committed an offence against the Corporations Act 2001 (Cth) and ought to be prosecuted for the offence, contrary to s 49(4) of the ASIC Act. The essential fact that is pleaded in support is that by no later than 18 March 2016, ASIC had obtained evidence and formed that view by reference to a large number of facts pleaded at [55] of the Further Amended Statement of Claim dated 13 June 2025.

3    Section 49(2) of the ASIC Act permits ASIC to cause a prosecution of a person to be commenced and carried on where the view is formed, as a result of an investigation or from a record of an examination, that a person may have committed an offence against the corporations legislation and ought to be prosecuted for the offence. In addition, s 49(3) empowers ASIC, whether before or after a prosecution has commenced, to require a person to give all reasonable assistance in connection with a prosecution. That power does not apply in relation to a person about whom ASIC has already formed the view that they may have committed an offence and ought to be prosecuted for it: s 49(4). Notably, these provisions do not affect the operation of the Director of Public Prosecutions Act 1983 (Cth): s 49(5).

4    The other issue is less straightforward. Much of the Statement of Claim is consumed with a detailed pleading about business transactions entered into between Mineralogy Pty Ltd, Sino Iron Pty Ltd, Korean Steel Pty Ltd and CITIC Ltd. Those transactions centre upon the holding of rights to exploit mining tenements in Western Australia and many other commercial agreements in relation to the exploitation of those rights. By 31 March 2006, agreement was reached with CITIC for the acquisition by it of limited forms of interest in the mining tenements. There are many other corporations, agreements and sub-interests that are pleaded, which are not presently necessary to summarise. Inevitably, there were delays in developing the mining tenements. CITIC suffered significant financial losses. There were cost pressures for the contracting parties. The financial viability of the venture was affected by foreign exchange losses. Disputes arose between the contracting parties.

5    Mr Palmer pleads that by no later than May 2010, CITIC unilaterally determined that it was dissatisfied with certain of the agreements and resolved to alter them. There is pleaded, and particularised in great detail, the Contract Alteration Objective, which CITIC formulated because it considered the bargains it had struck to be unfavourable. It is further contended that by May 2010 CITIC had concluded that the entire venture was unprofitable from its perspective. It determined to put in place a strategy to recover its financial losses. It formed that which is identified in the pleadings as the Fulcrum Group, for the purpose of achieving the Contract Alteration Objective in order to recover some portion of its financial loss. The overall strategy that is identified is that it would seek to sterilise the value of the Mineralogy mining tenements in order to render CITIC, and related parties, as “the one and only miner that Mineralogy must sell its other rights to”. This is identified as the Fulcrum Purposes at [43].

6    There is a detailed pleading that identifies how the Fulcrum Purposes may be inferred from a number of documents, including the making of complaints to officers of the Western Australian and Queensland Police. The complaints were first made in October 2014 and alleged stealing by direction by Mr Palmer of an amount of $12,000,000. Considerable material was later provided over an extended period, some of which involved serious allegations of misconduct by Mr Palmer and Mineralogy amounting to fraud, theft, breach of director duties and taxation fraud. Mr Palmer, as one might expect, vehemently denies the allegations.

7    From December 2014, CITIC, related corporations, individuals and lawyers acting for it engaged in communication and had meetings with representatives of ASIC. Mr Palmer pleads that the unfounded allegations of misconduct by him and Mineralogy were conveyed to the ASIC representatives. It is then pleaded that it may be inferred that the CITIC parties instigated ASIC to procure a criminal proceeding against Mr Palmer “not to have some bona fide wrong sanctioned or loss recovered, but to apply commercial pressure to Mineralogy and Mr Palmer in furtherance of the Fulcrum Purposes, and that ASIC was aware of Fulcrum Purposes”: [51]. The result, Mr Palmer contends, was the commencement of that which is described as the Cosmo Prosecution, initiated by the making of a complaint on 6 February 2020 in the Magistrates’ Court of Queensland. The complainant, Ms Sharon Concisom was at the time an employee of ASIC.

8    The Commonwealth Director of Public Prosecutions (CDPP), the second respondent, is conducting the Cosmo Prosecution on behalf of ASIC.

9    With an understanding of that adumbrated outline, the second issue is whether ASIC’s decision to use its compulsive investigative powers conferred by ss 19 and 49 of the ASIC Act must be for the sole purpose of investigating whether an offence has been committed and conducting a prosecution if it has been. The pleading is:

[67] It is a fundamental principle of the accusatorial system of criminal justice that the onus of proof beyond reasonable doubt rests on the Crown (Fundamental Principle).

[68] A companion rule to the Fundamental Principle is that an accused person cannot be required to testify to the commission of the offence charged (Companion Principle).

[69] A further companion principle is, or ought to be held to be, that the decision to use compulsive investigative powers in relation to whether an offence has been committed, such as those in s19, or s49, of the ASIC Act, must be for the sole purpose of investigating whether such offence has been committed (and if it appears that it has, its prosecution) and not for any other or additional purpose or consideration (the Sole Purpose of Investigating an Offence Principle).

10    The additional consideration, which is not contended to be an unlawful one, is identified at [70] as the Fulcrum Purposes and/or ASIC’s “considerations” pleaded at [51](f). The latter provides:

It may be inferred from and is evinced by:

…

(f) ASIC’s consideration of the political outcomes of charging Mr Palmer, including the apparent views of ‘stakeholders’,

PARTICULARS

By email dated 20 November 2017, in respect of another investigation in respect of Mr Palmer, Mr Brendan Caridi of ASIC stated in respect of the date for issuing media release regarding charges against Mr Palmer that "stakeholders" might ask "is that all there is? What about Mineralogy?" and that "if Palmer is served with the charges before [the upcoming Estimates committee meeting], ASIC may feel compelled to inform the Committee if the topic of Minerology/Palmer comes up"[PLC.0001.0005.7041], with Draft Media Release [PLC.0001.0005.7043], thereby evincing ASIC’s consideration of a media campaign or political consequences of charging Mr Palmer when those considerations were irrelevant.

that the CITIC Parties instigated ASIC to procure a criminal proceeding against Mr Palmer not to have some bona fide wrong sanctioned or loss recovered, but to apply commercial pressure to Mineralogy and Mr Palmer and in furtherance of the Fulcrum Purposes, and that ASIC was aware of the Fulcrum Purposes.

PARTICULARS

A.     The awareness of the Fulcrum Purposes on behalf of ASIC was held at least by Ms Forbes (being the author of the communication dated 22 February 2016 (pleaded at paragraph [49](l)) and Mr Stogdale (being a recipient of the communication dated 22 February 2016 (pleaded at paragraph [49](l)).

B.    Further particulars may be provided after interlocutory processes.

11    Issue is joined by ASIC in its defence dated 14 July 2025 and by the CDPP in its defence dated 14 July 2025. Each deny the central contentions of Mr Palmer.

12    Before turning to what is presently in issue, the respondents contend that the proceeding is an abuse of process and should be stayed or dismissed. The short point is that the issues raised seek to fragment the prosecution of the Cosmo Prosecution in the Magistrates’ Court of Queensland. An interlocutory application to that effect was filed by ASIC on 28 February 2025. It is yet to be determined. The reason is that Button J ordered that a related proceeding of Mr Palmer, concerning a different prosecution in the Magistrates’ Court of Queensland but which raises similar contentions of misuse of power by ASIC, be stayed pending the final determination of that prosecution: Palmer v Australian Securities and Investments Commission [2024] FCA 1167. The orders made by her Honour have been appealed to the Full Court. The Full Court has reserved on the appeal and the stay application remains dormant for that reason. In the meantime, this matter has been case managed in an attempt to bring clarity to the central points in issue. To that end I required the respondents to file defences.

13    By an interlocutory application dated 14 July 2025, ASIC seeks orders that certain paragraphs in the Statement of Claim be struck out without leave to replead and that judgment be entered in its favour in relation to other paragraphs. The CDPP supports the interlocutory application. I heard the interlocutory application on 22 August 2025. A consequence of requiring the parties to file a brief written outline of submissions is that Mr Dunning KC for Mr Palmer attached to his submissions a proposed Second Further Amended Statement of Claim, which proposes certain amendments to address some of the complaints of ASIC. Commendably, Ms Foley SC for ASIC and Mr Scott KC for the CDPP accepted that the proposed amendments addressed the interlocutory application in part. The argument proceeded on the basis that I would determine the balance of the interlocutory application by reference to the proposed amended pleading. It is convenient to simply reference this document as the pleading.

14    That leaves two aspects of the interlocutory application for determination. The first is paragraphs [70] – [71] and relatedly [37], [43] – [45], [50] – [51], [67] – [69] and Annexure B. For convenience, I reference these as the related paragraphs. ASIC contends that these paragraphs should be struck out without leave to replead. The second concerns paragraphs [61] – [66], where ASIC seeks that judgment be entered in its favour.

15    I deal with the interlocutory application in that order.

16    Paragraphs [70] – [71] are central to the arguments. Ms Foley accepted that if the arguments of ASIC in relation to these paragraphs are not accepted, then the related paragraphs need not be separately addressed. The pleading is:

70. The investigation had, as an additional consideration, the Fulcrum Purposes, as alleged in sections C and D above, and/or ASIC’s considerations as alleged in paragraph [51](f) above.

71. In the premises:

(a)     the summons issued to Mr Palmer dated 20 September 2017 compelling him, pursuant to s 19 of the ASIC Act, to be subjected to examination under oath, and to provide reasonable assistance to ASIC in relation to its investigation, was unlawful;

(b)     the examination of Mr Palmer purportedly pursuant to s 19 of the ASIC Act conducted by ASIC on 24 October 2017, 25 October 2017 and 1 November 2017, was unlawful;

(c)     the transcripts of the compulsory examination of Mr Palmer under s 19 of the ASIC Act were unlawfully obtained,

because each of them breached the Sole Purpose of Investigating an Offence Principle.

17    Ms Foley (supported by Mr Scott for the CDPP) submits that [70] is a plea that ASIC in deciding whether to use its compulsive investigative powers had in mind the Fulcrum Purposes as an additional consideration. The pleading does not identify the individuals within ASIC that Mr Palmer contends had those purposes or considerations in mind when decisions were made to initiate the investigative powers. That extends to when one or more of the individuals had the consideration in mind and that there is a lack of clarity as to what is meant by having the Fulcrum Purposes as an additional consideration. To that extent, Ms Foley submits that the pleading is ambiguous. There is a fundamental failure, the submission continues, to identify the subjective purposes of unnamed individuals at defined time points, contrary to r 16.43 of the Federal Court Rules 2011 (Cth). This difficulty is compounded by the absence of an attribution plea of that state of mind to the body corporate established at s 8 of the ASIC Act.

18    Ms Foley accepts that two ASIC officers are referenced in the pleading at [49] and [51], a Ms Forbes and a Mr Stogdale, but what is missing, the submission continues, is any causal link between what was known by those individuals and the decision to initiate the compulsive investigative powers. The pleading is no more than an allegation that two people within ASIC had awareness of a contended fact. Without more, the pleading is wholly defective. It is important in understanding that submission that there is no pleading that Ms Forbes or Mr Stogdale were concerned with, had input to or otherwise influenced the initiation decision. At the very least, Mr Palmer is obliged to plead with particularity how the identified individuals held the impermissible purpose and how they were involved in the compulsive investigation decision.

19    A related submission is that the pleading fails to specify the conduct which influenced the Fulcrum Purposes and the other considerations pleaded at [51](f). Overall, the pleading fails because it is vague, ambiguous, embarrassing and/or fails to disclose a reasonable cause of action: r 16.21 of the Rules. Leave to replead should not be permitted as this is the second strike out application concerned with these paragraphs, and there is a basis for the Court to conclude that there is no reasonable factual basis for Mr Palmer to maintain these contentions.

20    Mr Dunning resists. He characterises the complaints as cherry picking where ASIC fails to read the pleading in its entirety. The pleading is subdivided into sections A through H. Section A contains the introduction and identification of the parties. Section B pleads out the CITIC parties’ conduct. Section C pleads how the CITIC parties prosecuted the Fulcrum Purposes. Section D identifies commencement of the criminal proceeding. Section E is concerned with the contention that the s 19 examination was unlawful. Section F contends that the use and dissemination of the transcripts of the examination was unlawful. Section G pleads the Companion Principle and section H sets out the relief. Annexure A is a detailed particularisation of steps in the CITIC formulation and establishment of the Fulcrum Group and Annexure B provides particulars of the Fulcrum Purposes.

21    Section C.3 [49] pleads representations to and conduct with ASIC by CITIC and related parties. Presently relevant are sub paragraphs (l) and (m) which plead:

(l)    by email dated 22 February 2016 from Ms Forbes to Mr Stogdale of ASIC, Ms Forbes relevantly stated (MNR.0001.0008.0004):

They [QPS] seem very keen to assist/do something with ASIC if we see a role for them. They enquired whether we were receiving any political pressure and I said that if we were it was not being received at my level and would not affect our assessment of matters.

They expressed that they were conscious of the possible "other" agenda that CITIC might have in pursuing Palmer and want to ensure that CITIC know we (QPol and ASIC) do liaise so that they don't try to play agencies off against each other.

(m)     by email dated 18 March 2016 from Ms Forbes to Ms Dillon, copied to Mr Stogdale, ASIC stated that it had decided to investigate one of the issues the CITIC Parties raised in their complaint [MNR.0001.0003.5848];

PARTICULARS

A.     Further particulars will be provided following discovery and other interlocutory processes.

22    Paragraph [50] pleads that the communications between the CITIC parties and ASIC were made in furtherance of the Fulcrum Purposes and [51] contends that an inference should be drawn that the CITIC parties instigated ASIC to procure a prosecution of Mr Palmer in advancement of the Fulcrum Purposes of which ASIC was aware. One of the facts pleaded from which it is said that inference should be drawn is subparagraph (f) which refers to an internal ASIC email of 20 November 2017 (in respect of a different investigation concerning Mr Palmer) where a Mr Brendan Caridi dealt with a proposed media release to address perceived sensitivities once the fact of the charges was made aware to “stakeholders”. The particulars to this paragraph contend that the awareness of the Fulcrum Purposes on behalf of ASIC “was held at least by Ms Forbes (being the author of the communication dated 22 February 2016 pleaded at paragraph [49](l)) and Mr Stogdale” as the recipient of that email.

23    Paragraph [53] pleads that on or about 7 April 2016, ASIC commenced an investigation of Mr Palmer in relation to suspected contraventions of the Corporations Act. Next follows a detailed pleading at [55] in support of the contention that, by no later than 18 March 2016, ASIC had obtained the evidence and had formed the view that Mr Palmer was a person within the purview of s 49(1) and by operation of s 49(4) could not be compulsorily examined. Paragraph [56] pleads the summons date addressed to Mr Palmer of 20 September 2017. Paragraph [60] pleads that in consequence the summons issued to Mr Palmer, his compulsory examination, the transcripts thereof and any dissemination of the transcripts was unlawful.

24    Paragraph [62] pleads that on dates that Mr Palmer cannot presently particularise, ASIC provided transcripts of the compulsory examination of Mr Palmer to the CDPP and that it may be inferred that ASIC used the transcripts by reviewing them, processing the information contained therein and using them as a basis to interview a number of other individuals related to the CITIC parties. A similar pleading is at [63] to the effect that on a date prior to 6 February 2020, it may be inferred that ASIC used the transcripts of the compulsory examination for the purpose of formulating the complaint in the Cosmo Prosecution. Paragraph [64] contends that on a date prior to 10 February 2021 it may be inferred that ASIC used the transcripts of the compulsory examination to draft a summary of facts in the Cosmo Prosecution. Paragraph [65] contends that ASIC and the CDPP were not authorised to use the transcripts to formulate the complaint in the respects pleaded at paragraphs [62], [63] and [64].

25    Thus, Mr Dunning submits that once the structure of the pleading is understood, there is no merit in the contention that paragraphs [70] and [71] should be struck out. During the course of oral submissions, Mr Dunning gainsaid any necessity for Mr Palmer to identify that a sufficiently senior officer of ASIC had the impugned purposes when the decision was taken to initiate the compulsive investigatory powers. It is sufficient to plead that Ms Forbes and Mr Stogdale did, which is the express contention at [49](l) and (m), which is then linked to the particulars sub joined at [51] that the awareness within ASIC of the Fulcrum Purposes was that of Ms Forbes and Mr Stogdale. Mr Stogdale was a person involved in the investigation as pleaded at [2](d)(i) and in the email of 22 February 2016 (necessarily incorporated as a component of the pleading) Ms Forbes is described as: Senior Manager Enforcement – Corporations and Corporate Governance. That, the submission continues, is sufficient to attribute their states of mind to ASIC.

26    In my view paragraphs [70] and [71] are not susceptible to the strike out application. I am not satisfied that the pleading is evasive or ambiguous, is likely to cause prejudice, embarrassment or delay in the proceeding, fails to disclose a reasonable cause of action or is otherwise objectionable within the meaning of r 16.21 of the Rules.

27    My reasons may be shortly stated. The pleading must be read as a whole. There are many interdependent components. The reference to “the investigation” at [70] is to the investigation of Mr Palmer pleaded at [2] where, it is to be noted, that at all material times, ASIC employed Mr Stogdale with responsibility to supervise the investigation. The representations made by the CITIC parties relevant to the commencement of the investigation are pleaded in considerable detail at [49]. Within that pleading there is reference to steps taken by Ms Forbes and Mr Stogdale. The commencement of the investigation, on or about 7 April 2016, is unambiguously pleaded at [53]. By that point in time, there is a clear pleading that by no later than 18 March 2016, ASIC had obtained the evidence and formed the view that Mr Palmer was a person within s 49(1) of the ASIC Act and therefore could not lawfully be examined by reason of s 49(4).

28    The contention that the investigation had, as an additional consideration, the Fulcrum Purposes is cross-referenced to sections C and D of the pleading which, as I have noted, comprehensively pleads respectively the conduct of the CITIC parties to prosecute the Fulcrum Purposes and the commencement of criminal proceeding against Mr Palmer. The link to establish that the Fulcrum Purposes informed, affected or was considered by ASIC as a component of the investigation is pleaded at [49](l) and (m). These pleas in section C.3 are concerned with the representations by the CITIC parties to ASIC in furtherance of the Fulcrum Purposes. They sit within the broader contentions in the whole of section C which deals with the prosecution of the Fulcrum Purposes by the CITIC parties. There is much contact, written, oral and in meetings, between ASIC officers and representatives of the CITIC parties pleaded at [49]. Ms Forbes and Mr Stogdale as the two named ASIC officers at [49](l) and (m) are the persons readily identifiable from a consideration of the entirety of the pleading as concerned with the investigation who had knowledge of the Fulcrum Purposes. That they had such awareness is expressly pleaded in the particulars sub joined to [51].

29    Of course, having knowledge of the Fulcrum Purposes and applying that knowledge as “an additional consideration” relevant to the investigation are quite different. The improper consideration (i.e. use of knowledge of the Fulcrum Purposes) is pleaded at [51], where the contention is that the CITIC parties “instigated” ASIC to procure the prosecution against Mr Palmer not to have some bona fide wrong sanctioned or loss recovered, but to apply commercial pressure in furtherance of the Fulcrum Purposes and ASIC was aware of that. There is no ambiguity in what is meant by instigate in this context: it has the first and second dictionary meanings of: bring about by incitement or persuasion; provoke; urge on (Australian Concise Oxford Dictionary, 5th ed, 2009). Of course, whether such a serious allegation of misconduct by public officers is ultimately established on the evidence is entirely another matter, but is not relevant to the present strike out application.

30    For these reasons, paragraphs [70] and [71] will not be struck out. As I have observed, it is not then necessary to separately consider the related paragraphs.

31    That brings me to the second component of the interlocutory application which seeks an order pursuant to s 31A(2) of the Federal Court of Australia Act 1976 (Cth) or r 26.01(1)(a) or (c) of the Rules that judgment be given for ASIC in respect of the contentions at [61] – [66]. These paragraphs plead that the use and dissemination of the examination transcripts was unlawful, including by formulating the complaint in the Cosmo Prosecution, because the compulsory examination was itself unlawful. The short point of ASIC is that this portion of the pleading has no reasonable prospect of success in reliance on the decision of the New South Wales Court of Criminal Appeal in R v OC [2015] NSWCCA 212; (2015) 90 NSWLR 134. That case concerned a charge of conspiracy to commit insider trading. The accused had been compulsorily examined by ASIC pursuant to s 19 of the ASIC Act. As was his right, he claimed privilege against self-incrimination, before providing answers to the questions that were put to him. When he was subsequently charged with the offence, relevant officers of the CDPP with carriage of the prosecution had access to and read the transcripts. At trial the accused submitted that this compromised his right to a fair trial and the primary judge granted a temporary stay of the proceedings until the prosecution could be resumed by individuals who had not read or had derivative use of the transcripts.

32    The Crown successfully appealed the stay. Bathurst CJ (with whom R A Hulme and Bellew JJ agreed) held that despite the fundamental principle of the criminal law that an accused cannot be compelled to assist the prosecution to discharge the onus of proof, even where the privilege against self-incrimination has been wholly or partly abrogated (at [97]), the statutory scheme displaced that principle in that s 76 of the ASIC Act provides for use of a transcript of a compulsory examination and makes the transcript admissible unless one or more of the exceptions apply. The obvious one is s 68(3) which provides that a statement or the fact that the person who has signed a record of the transcript is not admissible in evidence against the person in a criminal proceeding or a proceeding for the imposition of a penalty, other than a proceeding in respect of the making of a false statement. Bathurst CJ concluded that by necessary implication an examination transcript might be provided to the CDPP for the purpose of considering the admissibility of the statements therein: [108] – [114], [122] – [124].

33    Ms Foley correctly submits that this is a decision by an intermediate appellate court concerning the construction of Commonwealth legislation which binds me unless I am satisfied that it is plainly wrong or there is some other compelling reason to depart from it. Neither condition is satisfied. Or, I should say that was the submission in her written outline. In oral argument, Ms Foley accepted that there is a point of distinction. The case was not concerned with a contention that the s 19 examination was unlawful from the outset. However, her submission then evolved to a complaint that this section of the pleading contends for a different species of unlawful conduct which is not connected to the Fulcrum Purposes or the consideration pleaded at [51](f).

34    Where that submission advances the summary judgment application is unclear, but in any event, I am unable to accept it. The plain contention in section E of the pleading is that the s 19 examination was unlawful because ASIC commenced the compulsory investigative process contrary to s 49(4) of the ASIC Act. Then [60] pleads, inter alia, that dissemination of the transcripts of Mr Palmer’s compulsory examination was unlawful because the entire process was unlawfully conducted. This directly leads into the pleas at [61] – [66] that particular use of the transcripts, including provision to the CDPP for the purpose of prosecuting Mr Palmer, was also unlawful.

35    It follows that the interlocutory application must be dismissed. Leave should be granted to the applicant to amend in the form of the Second Further Amended Statement of Claim, as annexed to the applicant’s outline of submissions dated 19 August 2025, to be filed by 4 pm on 2 September 2025. I adjourn the proceeding for case management to 10.15 am on 5 September 2025 for consequential orders and determination of the costs of the interlocutory application.

Associate:

Dated:    27 August 2025