Federal Court of Australia

Australian Securities and Investments Commission v Noumi Limited (No 6) [2026] FCA 785

ORDERS

THE COURT ORDERS THAT:

1.    Tab 164 of the court book (the May Inventory Spreadsheet) and all updates to it be admitted into evidence subject to a limitation under s 136 of the Evidence Act 1995 (Cth) that Column C of the “Whse” worksheet (included in Column A of the “Summary Location” worksheet) may not be used to prove the existence of a fact about which opinions are expressed, ie to establish that Mr Singh’s descriptions regarding warehouse locations were accurate.

2.    Pursuant to s 191(3)(b) of the Evidence Act 1995 (Cth), the parties be granted leave to state before the court the agreed fact that Ms Sutherland commenced preparing the document which became tab 847 for the purposes of the FY20 audit in around late June or early July 2020.

3.    Tab 847 of the court book be admitted into evidence subject to an order pursuant to s 136 of the Evidence Act 1995 (Cth) that the uses to which tab 847 of the court book may be made are limited to the uses (to the extent they prove those matters) stated in [59] of ASIC’s written submissions dated 10 June 2026, namely, to prove that:

(a)    FFG did not record any cost of goods sold for the Lactoferrin Invoices the subject of the proceeding;

(b)    the Lactoferrin Invoices were included in the revenue in the HY20 Financial Report and contributed at least $8.5 million to the gross profit recorded in that report; and

(c)    no lactoferrin the subject of the Lactoferrin Invoices was “shipped” in the sense of supplied to, collected by, or delivered to Interfood.

4.    Tab 834 of the court book be admitted into evidence.

5.    Tab 211 of the court book be admitted into evidence.

6.    The following may not be read or relied on by the plaintiff:

(a)    the second export report of Ms Oliver of 21 May 2026;

(b)    the third affidavit of Mr Sun of 3 June 2026;

(c)    paras 5–18 of second affidavit of Mr Singh of 3 June 2026; and

(d)    paras 9–21 of second affidavit of Ms Shepherd of 3 June 2026, noting that the plaintiff will not read paras 6–8.

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

REASONS FOR JUDGMENT

Delivered ex tempore, revised from transcript

JACKMAN J:

1    The hearing of these proceedings was fixed to commence three days ago on 9 June 2026. The parties sought and I agreed to postpone the commencement of the hearing to 15 June 2026 in order to allow further time for the consideration of objections. As matters transpired, Mr Macleod sought rulings on the admissibility of certain documents on 10 June 2026 and the parties are to be commended for their speed and efficiency in enabling that matter to be debated over the last two days in what became the first two days of the hearing. The dispute originally concerned four documents, but that was ultimately reduced to two in light of an agreed position concerning tabs 164 and 847 of the court book, which is reflected in the orders to be made today. The remaining dispute concerns tabs 834 and 211.

2    Tab 834 is objected to on the grounds of relevance, hearsay, and unfair prejudice.

3    Tab 834 is the spreadsheet produced on 16 August 2022, in answer to a notice under s 19(2) of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) dated 15 July 2022. ASIC seeks to tender the document without limitation. Mr Macleod seeks that it be admitted subject to a limitation under s 136 of the Evidence Act 1995 (Cth) (Evidence Act) as proof only of what Power BI/QAD records showed at the date it was prepared.

4    On 21 May 2021, ASIC sent a notice under s 19(2) to Ashurst, the solicitors for the first respondent (FFG) and requested in the covering letter among other things, in paragraph numbered 10 (CB1/761):

In respect of the Power BI Dashboard accessible by executives of the Company between 1 January 2019 and 30 June 2020, which contained a breakdown of inventory (including Non-nettable inventory):

(a)    provide a screenshot or printout of an example dashboard;

(b)    provide an audit log of when Campbell Nicholas, Rory Macleod, and Timothy Moses accessed the dashboard during the period 1 January 2019 to 30 June 2020 and copies of the dashboards as they appeared on those dates.

5    On 22 July 2021, Ashurst replied saying in relation to para 10(b) (CB10/4900):

In relation to category 10(b) of the Notice, our client has been informed by Microsoft (the developer of the Power BI Dashboard) that it is not possible to produce an audit log for the period 1 January 2019 to 30 June 2020, or to reconstruct what the Power BI Dashboard looks like within that period as historic data is deleted after a period of 90 days.

I note that that response did not say the data in FFG’s QAD system could not be reproduced.

6    That response led to a further s 19 notice under cover of a letter of 15 July 2022 (CB1/800) in which ASIC said that it understood that it was possible for coding to be applied to the back end of Power BI, which would allow Power BI to extract from QAD, and generate a report of, historic inventory data for any given period of time. ASIC said that it understood that the company had applied coding to the back end of Power BI from time to time, in order to generate custom reports.

7    ASIC requested FFG to apply the relevant coding to the back end of Power BI in order to generate reports of FFG’s total Nettable and Non-nettable inventory for each of the months of June 2019 to June 2020 (paras 1–2). ASIC requested that each month’s report show the value of Nettable and Non-nettable inventory as totals and broken down into categories and nominated status codes (para 3).

8    Ashurst responded on 16 August 2022, referring to a meeting that took place with ASIC on 4 August 2022 and emails by ASIC of 8 and 11 August 2022 which are not in evidence (CB11/5151). In that response, Ashurst said that the report sought by para 2 of the letter of 15 July 2022 had been generated to display the dollar value of Nettable and Non-nettable inventory for each month requested. Ashurst also said that not all of the nominated status codes necessarily applied (and therefore would be displayed) in any given month, and stated that FFG was not able to generate a report of Nettable and Non-nettable inventory by reference to a number of status codes which were set out. In other words, Ashurst was saying that the breakdown requested in para 3 of ASIC’s 15 July 2022 letter could not be provided by reference to the nominated status codes.

9    Ashurst's letter of 16 August 2022 provided a link to the document at tab 834. The document sets out figures for Nettable and Non-nettable inventory by reference to particular locations, and broken down into finished goods, other, packaging and raw materials, and provides subtotals and grand totals for the end of each month from June 2019 to June 2020.

10    Mr Macleod drew my attention to inconsistencies between the figures in tab 834 and other documentary evidence. For the month of December 2019, tab 834 gives a grand total of Non-nettable inventory of about $42.5 million. However, Mr Figueroa’s affidavit of 12 October 2023 at [23] refers to a national inventory report from Power BI that he downloaded in about June 2021, which showed total Non-nettable inventory in December 2019 of about $39.5 million. The difference of about $3 million can be explained to a substantial extent by the fact that tab 834 includes some non-Australian locations, such as China and North America. Further, it is not clear from Mr Figueroa’s evidence whether the report being referred to was as at the end of December 2019 or at some earlier date in December 2019.

11    Further, Ms Graham's affidavit of 12 October 2023 at [100] sets out a table summarising monthly working capital reports for FFG, including a report of 3 December 2019 in which the total Non-nettable inventory for the four Australian sites amounted to about $28.5 million. Again, that did not include the non-Australian sites which were included in tab 834, and the report was prepared in early December 2019 rather than at month-end. Mr Figueroa also referred to that report in the table in [56] of his affidavit and stated at [58] that the data that underpinned the working capital reports were taken from QAD.

12    In addition, Mr Macleod relies on the opinion in Ms Oliver’s first report at [2.3.4]–[2.3.6] as to the difficulties in reconciling the various financial records.

13    Mr Macleod also relies on emails between Mr Nicholas and Mr Sun on 27 and 28 May 2020 referring to difficulties in reconciling Non-nettable inventory from a Power BI Business Operations app and a report created by Mr Sun (CB8/3823). Mr Sun says in his affidavit of 12 October 2023 at [38] that he did not know the reason for the discrepancy.

14    ASIC drew my attention to the Non-nettable inventory figure for September 2019 in tab 834 of about $39.6 million, which is only about $1.5 million more than the working capital report of 11 October 2019 referred to in Mr Figueroa’s affidavit at [56].

15    Tab 834 provides direct evidence of what was recorded in FFG’s systems as at 16 August 2022 for the end of each of the months of June 2019 to June 2020. ASIC’s case, however, depends on what information was available to Mr Macleod at the end of each of those months, rather than what information was recorded for those months in August 2022. In my view, tab 834 is capable of rationally affecting the assessment of what was recorded in FFG’s systems as at the end of each of those months and would have been available to Mr Macleod at those times, despite the fact that they were earlier in time. That assessment, and the weight (if any) to be attached to tab 834, may well depend on other evidence casting light on whether significant adjustments were likely to have been made between the end of those months and 16 August 2022, and if so, what degree of significance any such adjustments may have had.

16    Ultimately, the case that ASIC seeks to prove is that at least $20 million of inventory disclosed in the FY19 Financial Report and HY20 Financial Report could not have been sold and should not have been included as an asset, and also that Mr Macleod knew or ought to have known those matters. That allegation allows for a degree of approximation in the assessment of the Non-nettable inventory actually recorded and available at the relevant time, and the data in tab 834 may well affect that assessment.

17    Accordingly, tab 834 is relevant within the meaning of s 55 of the Evidence Act.

18    Tab 834 and the representations it contains fall within s 69(1) and (2) as business records. The document forms part of the records kept by FFG in the course of its business and contains previous representations made or recorded in the document in the course of that business, within the meaning of s 69(1) of the Evidence Act. It contains representations which I infer were made either by a person who might reasonably supposed to have had knowledge of the asserted facts, or on the basis of information supplied by such a person within the meaning of s 69(2). Mr Macleod submits, however, that s 69(2) does not apply because the representations in tab 834 were prepared or obtained in contemplation of an Australian proceeding (namely, the present proceedings) within the meaning of s 69(3).

19    By 16 August 2022, FFG had been under investigation by ASIC in relation to accounting issues in FY19 and FY20 for about two years. The s 19 notice of 15 July 2022, which led to the production of tab 834, was the eighth formal notice issued under the ASIC Act to FFG in relation to that investigation (see the affidavit of Mr Webb of 1 November 2023 at [14]). A class action had been commenced in the Supreme Court of Victoria against FFG and its auditors on 9 December 2020. FFG’s annual report for FY22, published on 20 August 2022 (ie 4 days after tab 834 was produced to ASIC), stated in note 37 to the Consolidated Financial Statements in relation to contingent liabilities that:

A possible obligation exists in relation to pending class action proceedings and ASIC investigation in which the Group is a defendant. The amount of liability, if any, cannot be established with reliability and hence no provision is recognised in the financial statement.

20    I accept that as at 16 August 2022, FFG had in mind that legal proceedings were likely or reasonably probable, not merely one possibility, to use the language of Lindgren J in construing the word “contemplation” in s 69(3), in the often cited case of Australian Competition & Consumer Commission v Advanced Medical Institute Pty Ltd (No 2) [2005] FCA 1357; (2005) 147 FCR 235 at [43]. The document at tab 834 was obtained by FFG with that state of mind.

21    However, s 69(3) is concerned with the representations contained in the document, not with the document itself. It is apparent from Ashurst’s letter of 16 August 2022, against the background of the other correspondence, that tab 834 had been generated from the data relating to Nettable and Non-nettable inventory which were already embedded in FFG’s accounting systems. The representations contained in tab 834 were therefore representations prepared and obtained in the usual process of keeping accounting records. In my view, the strong likelihood is that that occurred in the ordinary course of business without any thought being given to possible legal proceedings, even if those personnel undertaking the relevant tasks happened to be aware of the likelihood of legal proceedings. Accordingly, in my view, irrespective of the time between 30 June 2019 and 16 August 2022, when the underlying representations in FFG’s data were prepared and obtained, s 69(3)(a) does not apply.

22    Contrary to Mr Macleod’s submission, I do not regard the admission of tab 834 as causing any unfair prejudice to Mr Macleod within the meaning of s 135 of the Evidence Act. The document was referred to expressly in ASICs pleading and in Ms Oliver’s first opinion of 18 December 2023 (at [2.3.5] footnote 79).

23    Accordingly, tab 834 will be admitted into evidence without limitation.

24    Tab 211 is objected to on the grounds of hearsay, inadmissible opinion, and unfair prejudice.

25    Tab 211 is a large spreadsheet entitled “Current Inventory Status”. It was an attachment to an email of 5 July 2019 from Mr Nicholas to Mr Moses and others, asking the recipients to review the attached file, particularly for the increase in Non-nettable inventory at Shepparton from June 2018 to May 2019. Mr Nicholas stated that at face value it seemed too high, for example the increase for finished goods of $14 million over the 11 months to May 2019. Mr Nicholas referred to the major items being set out lower in his email with closing quarterly and dollar values as at 31 May 2019 plus the dollar value movement between June 2018 and May 2019.

26    Tab 211 appears to have been generated by a request from Mr Sun to Mr Benkrouk (copied to Mr Nicholas) on 3 July 2019 for the inventory evaluation report with status codes to show whether particular categories of stock (such as rejects or rework or damages) increased (CB4/2386). Mr Sun explained in that email that he could not do that using QAD or Columo. About half an hour later, Mr Nicholas asked Mr Benkrouk to make this his highest priority.

27    It appears to be common ground that the spreadsheet was created on 3 July 2019, showing retrospectively the inventory figures recorded by FFG as at 31 May 2019.

28    By an email on 8 July 2019 by Mr Sun to Mr Nicholas on the subject of inventory movement by status code, Mr Sun referred to his inability to solve a $311,000 variance in a short time, and said QAD cannot produce a Non-nettable inventory valuation report, but that this could be worked out by a Power query although the calculation will be inaccurate, because some elements may be missed out.

29    Tab 211 (of what is now CB4/2391) gives a grand total for inventory as at 31 May 2019 of $149,413,624. That is far in excess of any other contemporaneous figure for total inventory. ASIC accepts that the figure is erroneous and attributes almost all of the error to a very large quantity of chocolate milk which it says was wrongly included at a value of $37,523,440 (CB4/2392A).

30    Mr Macleod draws attention to a number of problems with tab 211. There is a paucity of evidence as to how it was prepared, including what calculations and assumptions were adopted to reach the figures recorded in the spreadsheet. ASIC accepts that the total inventory figure is wrong. There seem to me at this early stage to be real difficulties in inferring that the information was simply the output of data recorded on FFG’s accounting systems.

31    Ultimately, in my view, these matters go to the question of what weight (if any), should be given to tab 211. It may well be that other evidence will cast some light on the document or the inventory accounting systems of FFG, which may affect that assessment of weight, and show that the document rationally affects the assessment of the probability of the existence of a fact in issue.

32    As to the hearsay objection, the document was part of the records of FFG kept in the course of its business, and thus falls within s 69(1). I infer that the document was prepared by either or both of Mr Benkrouk or Mr Sun, who might reasonably be supposed to have had personal knowledge of the asserted facts within the meaning of s 69(2).

33    As to the objection based on inadmissible opinion, Mr Macleod relies on the principle that where the document is a business record within the meaning of s 69, it is still necessary for the representation to comply with an exception to the opinion rule under ss 76–79 to the extent that it contains an opinion in order for it to be admissible: Lithgow City Council v Jackson (2011) HCA 36; (2011) 244 CLR 352 at [17]–[21] (French CJ, Heydon, and Bell JJ, with whom Gummow J agreed at [77]). However, ASIC relies on the document only as evidence of the recording or reproduction of observed data which it claims were already embedded in FFG’s accounting systems for inventory. I do not see the need for any formal s 136 limitation in light of ASIC’s stated position. ASIC does not seek to rely on the document as evidence of any inference from observed facts or expressing a judgment or conclusion by a process of reasoning. I accept that the document may be shown on the balance of probabilities to record or reproduce pre-existing data in light of the evidence as a whole, although ASIC will need to establish in due course that it is worthy of significant weight in order to provide the basis for any finding in its favour.

34    As to Mr Macleod’s submission concerning unfair prejudice, tab 211 was expressly relied on in Ms Oliver’s first report of 18 December 2023 at [2.4.6] in order to calculate unsaleable inventory as at 31 May 2019. Mr Macleod has thus had ample notice of ASIC's intention to rely on tab 211 in that way.

35    Accordingly tab 211 will be admitted without limitation.

36    ASIC has filed and served a number of further affidavits prepared in late May and early June, together with a supplementary report of Ms Oliver of 21 May 2026.

37    ASIC has indicated that if tab 211 is allowed into evidence without limitation (which it will be), ASIC will not read Mr Sun’s second affidavit of 29 May 2026. Further, as tab 834 is to be admitted into evidence without limitation, ASIC has stated that it does not read the affidavit of Mr Benkrouk of 1 June 2026. Further, ASIC does not read the first affidavit of Ms Sutherland dated 3 June 2026.

38    Mr Macleod has indicated that he does not object to the following affidavits on the grounds of delay and unfair prejudice (although he may well have other objections to parts of them):

(a)    the second affidavit of Ms Sutherland of 5 June 2026;

(b)    the affidavit of Ms Murray of 3 June 2026;

(c)    the first affidavit of Mr Nicholas of 9 June 2026;

(d)    the second affidavit of Mr Nicholas of 10 June 2026;

(e)    the second affidavit of Mr Singh of 3 June 2026, other than paras 5–18; and

(f)    the second affidavit of Ms Shepherd of 3 June 2026, other than para 6–21.

39    Mr Macleod objects to the following remaining affidavits on the grounds of lateness and unfair prejudice:

(a)    the second expert report of Ms Oliver of 21 May 2026;

(b)    the third affidavit of Mr Sun of 3 June 2026.

(c)    paras 5–18 of second affidavit of Mr Singh of 3 June 2026; and

(d)    paras 9–21 of the second affidavit of Ms Shepherd of 3 June 2026, noting that ASIC does not read paras 6–8.

40    The basis of the objection is set out in the affidavit of Mr Archer, solicitor for Mr Macleod, of 9 June 2026. Mr Archer gives detailed evidence as to his firm’s preparation for trial on behalf of Mr Macleod, noting that before the recent service of new material, Mr Macleod’s counsel were required to cross-examine 16 lay witnesses. Mr Archer has supervised his firm's team, which has been assisting counsel to prepare for those cross-examinations and sets out in detail the pre-trial preparation activities which his team has engaged in. Mr Archer states that in the preparation of the matter of a trial, his team is already fully committed with existing trial preparation tasks and gives by way of an example the fact that he has worked through every weekend since Easter 2026.

41    In relation to Ms Oliver’s second expert report in particular, Mr Archer refers to that report including an expert analysis of tab 211. Mr Archer refers to Ms Oliver having been asked to explain the difference between the total inventory balances in the “Summary” tab and the “Current Inventory Status” tab in the Workbook, and to reconcile the differences. Mr Archer refers to Ms Oliver's opinion that tab 211 was linked to 16 data queries, and the underlying data could be accessed through data queries using “Power Query Editor”. Mr Archer states that, as a lawyer, he is unable to replicate the analysis to which Ms Oliver refers. He states that in the proper and diligent preparation of Mr Macleod’s defence, he would have wished to instruct a forensic accounting expert capable of testifying in the proceeding to consider the correctness of Ms Oliver's conclusions and the implications of Ms Oliver’s conclusions for ASICs case more generally. However it is apparent from later evidence in his affidavit, that there is insufficient time available to engage a forensic accounting expert to undertake those tasks.

42    In relation to Mr Sun’s affidavit of 3 June 2026, Mr Archer refers to that affidavit as relating to a spreadsheet which is said to be an earlier version of tab 793. I note that I have not yet heard argument concerning the admissibility or otherwise of tab 793. Mr Archer states that that spreadsheet is not referred to in ASIC’s pleading, nor in any of ASIC’s filed evidence prior to Mr Sun’s affidavit of 3 June 2026, nor was it referred to in ASIC’s written opening submissions, and it was not the subject of earlier objection by Mr Macleod because it was not notified for tender by ASIC.

43    Mr Archer refers to Mr Sun’s affidavit of 3 June 2026 as stating that Mr Sun created the report by extracting data from QAD, but does not explain how he did this.

44    Mr Archer states that in the preparation of Mr Macleod’s defence, depending on how he had understood the spreadsheet would be used in ASIC’s case, he would have considered whether to instruct a forensic accounting expert and a data expert to verify the data and interrogate the correctness of what the spreadsheet purports to represent. Mr Archer says there is no longer time available to do this prior to the trial, and expands on that proposition later in his affidavit by reference to his attempts to engage a forensic accounting expert and a data expert.

45    At the time of making his affidavit on 9 June 2026, Mr Archer stated that he did not claim that any prejudice will arise from ASIC relying on the new affidavit of Mr Singh of 3 June 2026 at paras 5–18, or the new affidavit of Ms Shepherd of 3 June 2026 at paras 9–21. However, that was at a time when Mr Macleod understood that ASIC was prepared to limit the tender of tab 211 as relevant only to the fact that Ms Makris was reviewing FFGs working capital levels in July 2019. Now that ASIC seeks to tender tab 211 without limitation, I accept that Mr Macleod will be unfairly prejudiced by the lateness of those portions of the new affidavits of Mr Singh and Ms Shepherd.

46    Accordingly, in my view Mr Macleod will be unfairly prejudiced by the late service of Ms Oliver’s second expert report, Mr Sun’s affidavit of 3 June 2026, paras 5–18 of Mr Singh’s affidavit of 3 June 2026, and paras 9–21 of Ms Shepherd’s affidavit of 3 June 2026. He is simply unable to take the steps which his legal representatives, acting properly and diligently, would have wished to have taken if the new material had been served earlier and at an appropriate time. Accordingly, I reject that evidence upon which ASIC seeks to rely.

47    Accordingly, I make the above orders.

Associate:

Dated:    19 June 2026