The successful challenge to RI Advice’s claim for legal professional privilege and the compelling of Maxi EFX have provided clarity for the regulator around its ability to obtain documents and that it will “take steps” to enforce compliance with its notices.

ASIC cited a ruling in its favour in its case against Maxi EFX, which failed to produce documents in response to an ASIC notice issued to it. Maxi argued that the notice was unclear, that ASIC was not entitled to seek such a broad range of documents, and that certain documents were in the possession of overseas third-party entities.

Justice Michael Wigney held that the notice was validly issued and that the documents requested by the notice were in the possession, custody or control of Maxi EFX, notwithstanding the fact that they may have been physically retained by third-party entities located overseas. 

Justice Wigney determined that these entities held the documents “on behalf of, or on account of” Maxi EFX, which was in a position to request or require them to provide those documents to it so that they could be produced to ASIC.

ASIC stressed that they can require the production of specified documents in a person’s “possession” for the purposes of an investigation.

Those issued with such notice are required to produce not only the documents in their physical possession, but those in their custody or under their control.

“The mere fact that a notice might be burdensome or oppressive because of the work and expense involved in complying with it will not, of itself, provide a reasonable excuse for non-compliance,” ASIC said.

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“A notice issued under section 33 of the ASIC Act is not like a subpoena or discovery in litigation and cannot be objected to on the grounds that it involves a ‘fishing expedition’.”

Separately, the Federal Court ruled in ASIC’s favour in a dispute over client legal privilege, finding that a privilege claim by RI Advice Group Pty Ltd (RI Advice) an IOOF subsidiary, that was advised by Gilbert + Tobin, could not be upheld. 

Court documents show RI Advice had claimed privilege over an internal report, which it said had been prepared at the direction of an in-house lawyer for the purposes of the lawyer giving legal advice. RI Advice had previously produced copies of the report to ASIC in response to notices issued under section 33 of the ASIC Act.

Justice David O'Callaghan found that RI Advice’s evidence was inadequate to establish that the report was privileged, emphasising that “[no] explanation has been given…why RI’s current CEO, who was closely involved in the process that led to the creation of the Third File Review” did not give evidence.

ASIC stated that those making legal professional privilege claims over a document must be able to substantiate their claims. 

“Producing a document to ASIC without claiming legal professional privilege can be a clear waiver of that privilege,” the regulator warned.

“Those wishing to disclose a document to ASIC while maintaining a legal professional privilege claim over it should follow the instructions contained in the notice and seek ASIC’s formal agreement.”

ASIC sees the two cases as providing more clarity around obligations to comply with ASIC notices and to clearly substantiate claims for legal professional privilege.

“These actions demonstrate that, in appropriate cases, ASIC will take steps to enforce compliance with its notices,” ASIC said.