Background
Keystone Asset Management was appointed under court order as receivers and managers to investigate the conduct of the responsible entity for registered managed investment schemes. The receivers identified that significant investor funds from the Chiodo Diversified Property Fund (CDPF) and the Advantage Diversified Property Fund (ADPF) had been advanced to entities associated with Paul Anthony Chiodo. To trace the movement of these funds, the receivers obtained subpoenas to three major Australian banks requesting bank statements for accounts of Chiodo and related entities covering January 2017 to November 2019.
Chiodo applied to set aside the subpoenas on the ground that they lacked a legitimate forensic purpose and that ordinary principles of subpoena law—requiring documents to relate to issues in formal pleadings—should apply. Justice Moshinsky dismissed this application on 16–17 February 2026, holding the subpoenas were proper. Chiodo then sought leave to appeal to the Full Court.
The case turned on whether courts can issue subpoenas to support court-appointed receivers’ investigative functions outside traditional inter partes litigation frameworks, and whether the applicant suffered substantial injustice warranting appellate reconsideration.
The Court’s Holding
Justice McEvoy dismissed the application for leave to appeal, holding that the primary judgment was not attended by sufficient doubt and that no substantial injustice would result if leave were refused. The Court upheld the proposition that the power to issue subpoenas is incidental to the Court’s power to appoint receivers under section 1323(1)(h) of the Corporations Act. This reflects the practical reality that if receivers cannot obtain access to relevant documents held by third parties, they cannot effectively perform their functions—identifying and securing company property and tracing the movement of investor funds.
McEvoy J reasoned that established principles governing subpoenas in inter partes litigation do not foreclose the use of subpoenas to support court-appointed receivers in regulatory investigations. The proceeding was characterized as taking place in a regulatory context, not ordinary litigation. Evidence from the receivers’ liquidator confirmed that the bank statements sought were necessary for the investigation and that the listed accounts were ones the receivers considered may have received CDPF funds directly or indirectly. There was nothing inappropriate about the primary judge relying on this evidence, and the applicant’s challenge to specific aspects of that evidence was unconvincing.
On the question of substantial injustice, the Court noted that production orders had already been made in parallel proceedings under section 597(9) of the Corporations Act, requiring Chiodo to produce 21 of the 22 bank statement categories sought under the subpoenas. Accordingly, virtually all of the applicant’s personal financial information would be revealed to the receivers regardless of the subpoena outcome, negating any real prejudice or substantial injustice claim.
Key Takeaways
- Court-appointed receivers investigating asset disposition can obtain subpoenas to third parties (banks) based on necessity to perform their statutory functions, not limited by formal pleading requirements in inter partes litigation.
- The Court’s power to issue subpoenas in receivership and regulatory investigation contexts is incidental to and flows from the power to appoint receivers, and differs meaningfully from subpoena practice in traditional litigation.
- Where parallel production orders compel a party to produce substantially the same documents anyway, no substantial injustice flows from allowing subpoenas to stand—a critical practical consideration in leave-to-appeal analysis.
- Appellate review of subpoena decisions is constrained; courts of appeal are slow to interfere with first-instance discretionary determinations on procedural matters absent sufficient doubt and substantial injustice.
Why It Matters
This decision clarifies the scope of investigative powers available to court-appointed receivers and regulators conducting asset-tracing exercises. It establishes that receivers need not await formal pleaded issues or ongoing litigation to compel production from third parties; instead, their investigative mandate itself justifies subpoena use. This is practically significant for insolvency practitioners, liquidators, and regulators investigating misappropriation of funds or mismanagement of companies—they can now compel banks and other custodians to produce records directly relevant to asset-tracing, without the formalities of inter partes procedure. The decision also demonstrates how courts assess substantial injustice in leave-to-appeal applications: parallel remedies that achieve substantially the same result negate claims of prejudice, even if they were ordered in separate proceedings.