Federal Court: December 2025

CORPORATIONS

Application for extension of time to make any application under section 588FF(1) of the Corporations Act 2001 (Cth) – legal principles considered – application granted

Mansfield, in the matter of NR Complex Pty Ltd (in liq) (receiver and manager appointed) [2025] FCA 1349 (Jackman J) involved an application by liquidators for an extension of time to make an application under section 588FF(1) of the Corporations Act 2001 (Cth) (‘Act’) in respect of several companies that formed part of a group of companies that constructed various residential apartment buildings in NSW (‘Dyldam Group’).

The companies were wound up on various dates in 2022 and 2023, and the liquidators carried out their investigations. However, they experienced various impediments including lack of funding, lack of cooperation from the companies’ directors, and issues with the availability of books and records.

The relief sought in the liquidators’ application was for an extension of time of approximately 18 months from the date of the application, to enable funding to be pursued and further investigations to be undertaken.

The Court’s findings

The Court granted the extension. In doing so, it canvassed the applicable principles in relation to s 588FF of the Act as follows:

1. The time periods within which the application could be made were set out in s 588FF(3) of the Act. In this regard, the orders sought could be made after the expiry of the three-year period in s 588FF(3)(a) if the application for extension was filed within that period (citing Brereton, in the matter of ICT Century Pty Ltd (in liq) [2025] FCA 107 at [3(a)]) (at [6]-[7]).

2. The discretion referred to in s 588FF(3)(b) involves balancing the requirement of commercial certainty for those who had past dealings with the corporation against the conflicting interest of the creditors of the company (citing Fortress Credit Corporation (Australia) II Pty Ltd v Fletcher [2015] HCA 10 at [8]) (at [8]-[9]).

3. A failure to give notice of the application is not fatal to an extension order, and whether the extension should issue is a matter for the Court’s discretion (citing Fortress Credit Corporation (Australia) II Pty Ltd v Fletcher [2014] NSWCA 148 at [106]) (at [25]).

4. The relevant factors to be considered in the Court’s exercise of its discretion are: delay and the explanation for the delay; merits of the proposed proceedings (unless the liquidator’s purpose is to investigate whether to bring proceedings); and the prejudice arising from the grant of an extension (citing New Cap Reinsurance Corp v Reaseguros Alianza SA [2004] NSWSC 787 (‘New Cap’)) (at [10]).

5. Delay takes into consideration the amount of time liquidators have had to perform investigations. When considering the explanation for delay, the Court will consider whether the liquidators have diligently endeavoured to dispose of the proceedings in a timely way or could have used reasonably available opportunities to avoid the delay (citing Re Clarecastle [2011] NSWSC 857 at [137]). Delay is more acceptable where it is unlikely to prejudice the defendant (citing BP Australia Ltd v Brown [2003] NSWCA 216 (‘BP Australia’) at [188]-[189]) (at [11]).

6. Explanations for delay can include a lack of available information or cooperation, the complexity of proceedings, and seeking funding or uncertainty about funding—particularly where the proceedings are complicated. A failure to obtain funding is not an explanation in itself, but is weighed against other relevant factors and the need for commercial certainty (citing In the matter of Cohalan & Mitchell Roofing [2020] VSC 222 at [52] and BP Australia at [118]–[119]) (at [12]).

7. In considering the merits of the proceedings, the Court undertakes a preliminary review to determine whether the proceedings are so devoid of prospects that it would be unfair, by granting an extension, to expose the other party to the continuing prospect of suit (citing New Cap at [52] and Re Green [2002] NSWSC 135 (‘Re Green’) at [6]) (at [19]). Reviewing the merits may not be necessary if the liquidator’s purpose in seeking the extension is to undertake further work to put themselves into a position where they properly decide whether not to bring the proceedings (citing Re Green at [6]) (at [19]).

8. With respect to the prejudice resulting from the grant of an extension, the Court will consider whether it is sufficiently substantial to outweigh the case for granting an extension (citing New Cap at [52] and BP Australia at [193]) (at [20]).

The Court then considered various earlier decisions where extensions of time were granted to evaluate overall whether it was ‘fair and just’ in all the circumstances to grant the extension (at [21]-[22]).

In the Court’s assessment, the evidence addressed various relevant factors, including:

• the companies formed part of a wider group of about 300 entities with interconnected related party loan accounts between them that required further investigation in order to understand each company’s financial position (at [13]);
• the investigations were hindered by a lack of books and records, and limited responses or assistance from the directors of the companies (at [14]);
• the investigations were complicated by the use of external advisers and the appointment of different liquidators across the wider Dyldam Group, resulting in various appointees not having complete visibility of the Dyldam Group’s affairs (at [15]-[16]);
• the liquidations were lacking funds such that it was not possible to progress investigations by way of public examinations (at [17]);
• the liquidator outlined in a confidential affidavit the steps needed to be taken if the extension was granted and his time estimates to complete the anticipated stages of work (at [23]); and
• the confidential affidavit also explained the reason behind not providing notice of the application (at [25]).

Given the above, the Court found it was fair and just to grant the extension, and held it was not necessary to require notice of the application to be given before granting the relief.

CORPORATIONS 

Fragmentation of criminal proceedings – civil proceedings challenging the lawfulness of the exercise of s 19 power by ASIC – operation of ss 49, 68 and 76 of the ASIC Act – whether civil proceedings fragmenting criminal proceedings

The Full Federal Court decision, Palmer v Australian Securities and Investments Commission [2025] FCAFC 151 (‘Palmer v ASIC’), is a significant pronouncement on the procedural relationship between executive investigative action and the criminal justice system. The judgment, delivered by Beach, Banks-Smith and Owens JJ, reaffirms the judicial policy against the ‘fragmentation’ of criminal proceedings: the principle that civil proceedings should not fragment or interfere with ongoing criminal trials.

At issue was the refusal by the primary judge (Robertson J) to permanently stay civil proceedings that challenged the lawfulness of compulsory examinations conducted by the Australian Securities and Investments Commission (‘ASIC’) under section 19 of the Australian Securities and Investments Commission Act 2001 (Cth) (‘ASIC Act’). The transcripts of these examinations—fruits of the s 19 power—had been provided to the Commonwealth Director of Public Prosecutions (‘CDPP’) for use in an ongoing criminal prosecution against the applicants.

The core legal issue in this appeal centred on the concept of fragmentation of criminal proceedings—the idea that a collateral civil challenge could improperly interfere with and disrupt an active or pending criminal trial. While the Full Court ultimately affirmed the primary judge’s refusal of a permanent stay, its detailed reasons for judgment clarify the scope of ASIC’s investigative powers, the operation of protective provisions in the ASIC Act, and the complex jurisdictional interplay between civil and criminal courts.

The compulsory examination and criminal charges

The appellants were facing prosecution for alleged contraventions of section 631 of the Corporations Act 2001 (Cth), a provision dealing with takeover bids. Prior to the charges, ASIC exercised its investigative powers under s 19 of the ASIC Act, which compels individuals to attend examination under oath and produce documents relevant to an investigation. The s 19 examination is central to ASIC’s function as the primary corporate regulator in Australia.

The procedural irregularity raised in the civil claim was the alleged unlawfulness of the s 19 examinations themselves. The applicants sought declaratory and injunctive relief in the Federal Court to declare the s 19 examinations unlawful and prevent the CDPP from using the transcripts in the criminal proceedings.

The statutory code

The ASIC Act contains a statutory scheme for managing the conflict between compulsory self-incrimination and the right to a fair trial. This scheme was foundational to the Full Court’s reasoning:

• Section 49 (self-incrimination): this section abrogates the privilege against self-incrimination, requiring the examinee to answer questions even if doing so may tend to incriminate them.
• Section 68 (use immunity): this section provides the quid pro quo for the loss of privilege under s 49, offering a ‘use immunity’. It generally prevents the use of compelled answers in criminal proceedings against the examinee, save for specific exceptions (e.g., prosecution for false or misleading statements made during the examination).
• Section 76 (admissibility): this section addresses the admissibility of s 19 evidence in various proceedings, including the requirement that the evidence must be relevant.

In effect, the applicants’ civil action in the Federal Court was an attempt to construct an extra-statutory exclusion, contending the entire examination process was unlawful thereby rendering the transcripts inadmissible in the criminal trial, irrespective of the carve-outs within s 68. The Full Court decisively rejected this attempt to supplant the legislative will.

The doctrine of fragmentation

The core of the Full Court’s analysis lies in the doctrine of the fragmentation of criminal proceedings.

Policy rationale and authority

Fragmentation is a discretionary judicial policy designed to ensure the criminal trial retains its integrity and remains the singular court for managing the evidence adduced in a criminal prosecution. In particular, issues related to the admissibility of evidence in a criminal trial should be determined by the judge in that trial rather than allowing parties to run parallel cases in other courts that seek to rule on the same issues.

The Full Court identified the principal policy concerns underlying the doctrine of fragmentation:

1. Risk of delay and disruption: a concurrent civil challenge delays the conduct of a criminal trial, leading to unacceptable delays, wasted judicial resources and, potentially, miscarriages of justice due to fading memory or unavailability of witnesses.
2. Risk of inconsistent determinations: allowing a civil court to determine issues of fact or law pertinent to the criminal trial risks contradictory outcomes given the differing standards of proof (balance of probabilities in civil versus beyond reasonable doubt in criminal).
3. Pre-emptive of the trial judge’s function: the criminal trial judge has specific statutory and common law discretion to exclude evidence improperly or illegally obtained. Allowing a civil court to rule on admissibility effectively pre-empts and circumscribes the exercise of this fundamental judicial function.

The Full Court held the relief sought (an injunction preventing the CDPP from using the transcripts) constituted an act of fragmentation. That is, it was an attempt to decide the admissibility question, which is intrinsic to the criminal trial, in an outside forum.

Temporary stay

The Full Court endorsed the primary judge’s decision to impose a temporary stay on the civil proceedings. This was found to be the optimal resolution, achieving two competing objectives simultaneously, that is:

1. upholding the right to judicial review: the applicants’ right to challenge the lawfulness of the executive action (ASIC’s s 19 power) is preserved to be heard upon the conclusion of the criminal matter; and
2. protecting criminal integrity: by deferring the civil action, the criminal trial is allowed to proceed without interference. Any challenge to the admissibility of the transcripts must be argued before and determined by the trial judge in the criminal proceedings

Section 39B(1A)(c) of the Judiciary Act

A significant procedural issue concerned the Federal Court’s jurisdiction to entertain the civil proceedings, specifically regarding the claims made against ASIC itself.

The jurisdiction of the Federal Court rests largely upon section 39B(1A)(c) of the Judiciary Act 1903 (Cth), which extends the Court’s jurisdiction to matters ‘arising under any laws made by the Parliament’. The claim against the CDPP (an officer of the Commonwealth) was clearly justiciable under s 39B(1A)(c).

However, ASIC is not classified as an ‘officer of the Commonwealth’ in the relevant sense. The question was whether the claims for declaratory and prohibitory relief against ASIC itself (challenging the s 19 power) could be maintained. The Full Court, though not required to issue a definitive ruling on the jurisdictional point given its decision on fragmentation, offered a compelling obiter discussion, preferring the analysis of the primary judge.

The Full Court suggested that jurisdiction might exist for the following:

1. Declaratory relief: granting a declaration ‘tailored to the s 19 unlawfulness question only’ against ASIC.
2. Prohibitory relief in non-criminal contexts: orders precluding the use of the transcripts outside the extant or future criminal proceedings, such as their use in subsequent civil penalty proceedings.

This confirms that the unlawfulness of the executive act is conceptually distinct from the admissibility of the evidence in the criminal trial. While the former remains reviewable by the Federal Court, the latter must wait its turn.

Implications and conclusion

Palmer v ASIC provides procedural certainty and a helpful restatement of the judicial policy against fragmentation with practical guidance for regulators and corporate defendants alike.

For ASIC and the CDPP

The decision validates the current operational practice of sharing information between ASIC and the CDPP and confirms the effectiveness of the s 19 power against disruptive collateral attacks. The regulators now have a clear judicial statement that the legislative intent embedded in the ASIC Act will be respected and attempts to circumvent s 68 will be met with the judicial shield of non-fragmentation. This reduces the risk of having criminal prosecutions perpetually stalled by satellite civil litigation.

Implications for corporate defendants

For defendants facing concurrent ASIC investigation and criminal prosecution, the decision clarifies that a defendant subject to an ASIC examination who subsequently faces criminal charges cannot expect to pre-emptively neuter the prosecution’s evidence by seeking immediate civil review of the examination’s lawfulness. Any challenge to the admissibility of the compelled testimony must be mounted before the criminal trial judge, relying on the specific limitations of s 68 of the ASIC Act and, where applicable, the discretionary power to exclude improperly obtained evidence under common law principles. The temporary stay ensures the primary battleground remains the criminal courtroom.

Conclusion

The Full Court’s judgment in Palmer v ASIC reveals judicial commitment to the non-fragmentation principle and is an important reference point for all future challenges to ASIC’s investigative powers where parallel criminal proceedings are pending. By affirming the temporary stay, the Full Court provided a procedural balance. It preserved the applicants’ ultimate right to judicial review of executive conduct, yet simultaneously protected the exclusive domain of the criminal trial judge.

The decision also solidifies the legislative design of the ASIC Act—where the s 68 use immunity is the comprehensive statutory mechanism for protecting fair trial rights—and serves as an authoritative statement that collateral civil attempts to pre-empt criminal evidence determinations will be judicially quarantined, ensuring procedural efficiency and the integrity of the criminal justice system.

Vincci Chan is a barrister at University Chambers and Talitha Fishburn is a barrister at 4 Wentworth Chambers.