NEW SOUTH WALES COURT ISSUES JUDGEMENT FOR AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION V/S REGIONAL EXPRESS HOLDINGS, ET AL. CASE

Australia, June 12 -- New South Wales Land and Environment Court issued text of the following judgement on May 13:

1. By Interlocutory Process filed on 1 May 2025, the Plaintiff, the Australian Securities and Investments Commission ("ASIC") seeks orders in respect of disclosure in these proceedings. Those orders address, first, the categories as to which disclosure is sought and second, the process which is to be adopted in respect of disclosure, where the documents which would be the subject of disclosure are held by the First Defendant, Regional Express Holdings Limited (admins apptd) ("Rex"). Rex is, as its title indicates, a company in voluntary administration, and the voluntary administrators are concerned to preserve the scarce resources of that company for the benefit, so far as possible, of its creditors.

2. The application for disclosure is made on the basis that the Defendants other than Rex, who are individual defendants against whom substantive relief is sought in the proceedings, presently assert a privilege against self-incrimination or exposure to a penalty, and would not be giving disclosure or reading affidavits until after ASIC closes its case in chief.

Affidavit evidence

3. I should first address the applicable evidence, before turning to the principles and a determination. ASIC reads the affidavit dated 31 March 2025, of its solicitor, Mr Cash, which addresses, inter alia, circumstances in which ASIC previously issued notices requiring production of documents under the Australian Securities and Investments Commission Act 2001 (Cth) ("ASIC Act") and ASIC's assessment that only partial production was made in response to those notices. That evidence explains why there is reason for disclosure in these proceedings, which might not have existed had there been full compliance with the notices previously issued by ASIC for the production of documents.

4. By a second affidavit dated 1 May 2025, Mr Cash undertakes a detailed review of the reasons for disclosure, as contemplated by the requirements of Supreme Court Practice Note SC Eq 11 ("Practice Note"), to which I refer below. Mr Cash addresses the particular categories which are proposed for disclosure, and the relationship which those categories have with the matters in issue in the proceedings, on a category by category basis, and with specific reference to the nature of the ASIC's allegations in the proceedings. Mr Cash also there addresses the likely cost of disclosure, as the Practice Note requires. There was previously some disagreement between the parties as to that cost estimate or at least as to the certainty of that cost estimate. That issue has now been addressed by an amendment to the process by which document review will take place, which has allowed Rex and its legal advisers to be comfortable that the work required of Rex can be completed within that costs estimate.

5. By a third affidavit dated 12 May 2025, Mr Cash addressed recent correspondence between the parties which has, shortly before the listing today, led to the development of consensus which is now reflected in the orders that are sought.

The parties' submissions and applicable principles

6. The parties in turn made detailed submissions, and Mr Borsky, with whom Mr Kruse appears for ASIC, in particular addresses the process for discovery which ASIC proposes. Other parties, including Rex and individual Defendants had also made submissions, which are now largely displaced by the consensus which has developed between the parties.

7. Turning now to the applicable principles, orders for disclosure in this Court are approached having regard to the Practice Note which seeks to limit the costs of litigation, particularly so far as it concerns the cost of discovery of electronic material: Leighton International v Hodges [2012] NSWSC 458 ("Leighton"). The Practice Note contemplates the ordinary position that any disclosure will be sought following the service of evidence, although there are circumstances in which the Court may properly depart from that approach.

*Rest of the document can be viewed at: (https://www.caselaw.nsw.gov.au/decision/196eafca59c9d5dda881fb5b)

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