As per the Australian Securities and Investments Commission Act 2001, ASIC is required to:
There is no obligation upon ASIC under the Act to ensure that the documents lodged to ASIC's register contain accurate information.
As per section 1274(8) of the Act, when a document is submitted for lodgement, ASIC may refuse to register or receive the document if, for example, the document contains a matter contrary to law, is false or misleading, or if it contains an error.
ASIC also has the power to request any other such document in support of the document that has been lodged, if ASIC considers it necessary to form an opinion whether it wants to refuse to receive or register the first‑mentioned document; section 1274(9) of the Act.
Significantly, the discretionary powers of section 1374(8) and (9) of the Act is at the time of lodgement and does not assist those seeking to withdraw the forms once lodged and reflected on ASIC's register.
ASIC can take action where there has been a breach of the Act, however this is an exercise of discretion as to whether they investigate a report of a potential breach.
McCabe Curwood acted for the plaintiff in these proceedings.
The plaintiff set out in her evidence that she did not resign as director or authorise the transfer of her shares in the Company to the defendant, and she submitted that the Forms 484 certified by the defendant and lodged with ASIC recorded a false account of the relevant transactions.
Black J, in regards to the validity of the two forms, held that the transactions were ineffective, in that:
The plaintiff sought for the Court to make an order under section 1322(4)(b) of the Act that the relevant Forms 484 lodged with ASIC be withdrawn from ASIC's register.
Black J noted that the Court has power to rectify the register where
"… the process leading to entry of the current information as to the directors, shareholders and registered office … was not properly founded by any corporate process and the register should be rectified on that basis. … [T]here is a public interest in the adoption of a proper process for changes in directors and shareholders and for notifications to ASIC of directors and shareholdings, which warrants rectification of the register …"His Honour was thereby satisfied that the Court had power to rectify the register to correct the incorrect information included in the two invalid forms, and the forms were subsequently removed from ASIC's register.
You should also ensure that your company's corporate key is secure and is only accessible by valid company officeholders. As occurred in Seabay, the ASIC forms were lodged using the company's corporate key on ASIC's online platform, which caused immediate changes to the company’s details. We note that new corporate keys can be requested by officeholders, so in the event of an internal dispute between directors, immediate injunctive relief may be required to prevent any further changes to ASIC's register.
As was found in Seabay and the more recent decision of In the matter of McDonagh Management Pty Limited  NSWSC 1099, the Court is "increasingly dealing with the consequences of abuse of corporate keys", so safeguarding your corporate key is becoming ever more paramount to protect your company against unauthorised changes to ASIC's register.
McCabe Curwood's litigation and dispute resolution team has a great deal of knowledge and experience in relation to corporate disputes and applications under the Corporations Act. If you or your company require legal advice on any of the matters raised in this article, do not hesitate to get in touch with our firm today to ensure you and/or your company are adequately protected.