mdroth/huggingface-course_section-5_zst huggingface dataset:
Case: Hickman v Kent or Romney Marsh Sheep Breeders' Association [1915] 1 Ch 881
Outcome: cited
The "body corporate" exception (see [25] above) does not apply. The purpose of this exception is to ensure that the ordinary engagement of a company in commercial activities does not come within the managed investment scheme regime. The contract created by a company's constitution (see now Corporations Act s 140(1)) only affords rights or imposes obligations on a member in his or her capacity as a member: Hickman v Kent or Romney Marsh Sheep Breeders' Association [1915] 1 Ch 881 at 897. The essence of the FUELbanc scheme is that a participant provides "trade dollars" and cash in return for a promise to provide credit for the purchase of fuel over a future period. The legal foundation for this arrangement is not membership of the company but the contractual relationship between the company and the participant. Relevantly for present purposes, the participant becomes a member of the scheme whether or not he or she becomes a member of the company. (In any event, ASIC has been unable to discover any membership registers, minutes or other records which might prove that participants in fact became members.) 33 Section 763B of the Corporations Act provides: "For the purposes of this Chapter [ie Chapter 7 Financial Services and Markets], a person (the investor) makes a financial investment if: (a) the investor gives money or money's worth (the contribution) to another person and any of the following apply: (i) the other person uses the contribution to generate a financial return, or other benefit, for the investor; (ii) the investor intends that the other person will use the contribution to generate a financial return, or other benefit, for the investor (even if no return or benefit is in fact generated); (iii) the other person intends that the contribution will be used to generate a financial return, or other benefit, for the investor (even if no return or benefit is in fact generated); and (b) the investor has no day-to-day control over the use of the contribution to generate the return or benefit." 34 Participants in the FUELbanc scheme are making a "financial investment" within the meaning of s 763B because they give money to FUELbanc which uses the contribution to generate a financial return or other benefit for the participant. The participant intends that FUELbanc will use the contribution to generate a financial return or other benefit for him or her and FUELbanc intends that the contribution will be used to generate a financial return or other benefit for the participants. In all these respects the contribution is caught even if no return or benefit is in fact generated.
Case: Australian Securities and Investments Commission v Pegasus Leveraged Options Group Pty Ltd (2002) 41 ACSR 561
Outcome: cited
In respect of the FUELbanc unregistered managed investment scheme, was Stephen McDougall a person "operat(ing)" the scheme within the meaning of s 601EE? As Davies AJ said in Australian Securities and Investments Commission v Pegasus Leveraged Options Group Pty Ltd (2002) 41 ACSR 561 at [55]: "The term [operate] is not used to refer to ownership or proprietorship but rather to the acts which constitute the management of or the carrying out of the activities which constitute the managed investment scheme." 60 A number of courts have made declarations in cases involving contraventions which carried criminal penalties, albeit with no express discussion of the point raised in Intertax . Nevertheless, the consistent practice is a matter of considerable weight. The cases are: Australian Securities and Investments Commission v Atlantic 3 Financial (Aust) Pty Ltd [2006] QCA 540 (Queensland Court of Appeal), Australian Securities and Investments Commission v PFS Business Development Group Pty Ltd (2006) 57 ACSR 553 (Hargrave J, Supreme Court of Victoria), McDougall (Young J, Federal Court), Australian Securities and Investments Commission v Preston [2005] FCA 1805 (Finkelstein J, Federal Court), Australian Securities and Investments Commission v Drury Management Pty Ltd [2004] QSC 68 (Jones J, Supreme Court of Queensland), Australian Securities and Investments Commission v Young [2003] QSC 29 ; (2003) 21 ACLC 655 (Muir J, Supreme Court of Queensland), Pegasus (Davies AJ, Supreme Court of New South Wales), Australian Securities and Investments Commission v Hutchings (2001) 19 ACLC 1454 (Windeyer J, Supreme Court New South Wales), Australian Securities and Investments Commission v Sweeney [2001] NSWSC 114 (Austin J, Supreme Court of New South Wales).
Case: Australian Securities and Investments Commission v McNamara (2002) 42 ACSR 488
Outcome: cited
This passage was applied in Australian Securities and Investments Commission v McNamara (2002) 42 ACSR 488 at [32] and in McDougall at [34]. 44 Here there is no doubt that Stephen McDougall formulated the scheme and managed its day to day operations. He was thus one of those operating the scheme. 45 As to Stephen McDougall's liability for carrying on a financial services business without a licence, the same reasoning applies. In any event he would clearly have aided, abetted, counselled and procured FUELbanc to contravene the Act: s 1324(1)(c).
Case: Ainsworth v Criminal Justice Commission [1992] HCA 10 ; (1992) 175 CLR 564
Outcome: cited
The jurisdiction of the Federal Court to make declarations is founded in s 21(1) of the Federal Court of Australia Act 1976 (Cth) which provides: "The Court may, in relation to a matter in which it has original jurisdiction, make binding declarations of right, whether or not any consequential relief is or could be claimed." As a superior court, the Federal Court would also have inherent power to grant declaratory relief: Ainsworth v Criminal Justice Commission [1992] HCA 10 ; (1992) 175 CLR 564 at 581.
Case: Tobacco Institute of Australia Limited v Australian Federation of Consumer Organisations Inc (No 2) (1993) 41 FCR 89
Outcome: cited
Section 21(1) has as its ancestor O XXV r 5 of the Rules of the Supreme Court 1883 (Eng) which developed from the first English legislative provision, s 50 of the Chancery Procedure Act 1852 (UK): see Tobacco Institute of Australia Limited v Australian Federation of Consumer Organisations Inc (No 2) (1993) 41 FCR 89 at 108-109 per Hill J. Although prior to the English legislation mentioned courts of that country had a "deep suspicion" of the declaration of right (Zamir and Woolf The Declaratory Judgment , second edition, 1993, at 11), it seems as though this reluctance only extended to the grant of "pure" declaratory relief. Thus in Clough v Ratcliff (1847) 1 De G &amp; Sm 164 at 178 Knight Bruce V-C said: "Nakedly to declare a right, without doing or directing anything else relating to the right, does not, I conceive, belong to the functions of this Court [of Chancery]." 61 I conclude that I should not follow Intertax . It is appropriate to make the declarations sought. It is sometimes said that a declaration is an appropriate way of marking the Court's disapproval of the contravening conduct: see eg McDougall at [55]. While certainly the conduct of the corporate defendants and Stephen McDougall has been reprehensible, the actual declarations do no more than declare the bare facts that the defendants operated an unregistered managed investment scheme and carried on a financial services business without a licence. The declarations would be equally appropriate if the defendants' business had been carried on with exemplary prudence and meticulous bookkeeping. A more satisfactory rationale may be that the right declared will be a public right. In Tobacco Institute (at 98) Sheppard J said that the declaration in that case would " ... be a declaration of right because the right which will be declared will be a public right, namely, the right of the public not to be misled or deceived by factual statements in an advertisement concerning the effects of passive smoking." In the present case the legislation contravened protects public rights by regulating the conduct of those who seek investment from the public. Declarations as to the contraventions provide a formal vindication of the law's operation.
Case: Clough v Ratcliff (1847) 1 De G &amp; Sm 164
Outcome: cited
Section 21(1) has as its ancestor O XXV r 5 of the Rules of the Supreme Court 1883 (Eng) which developed from the first English legislative provision, s 50 of the Chancery Procedure Act 1852 (UK): see Tobacco Institute of Australia Limited v Australian Federation of Consumer Organisations Inc (No 2) (1993) 41 FCR 89 at 108-109 per Hill J. Although prior to the English legislation mentioned courts of that country had a "deep suspicion" of the declaration of right (Zamir and Woolf The Declaratory Judgment , second edition, 1993, at 11), it seems as though this reluctance only extended to the grant of "pure" declaratory relief. Thus in Clough v Ratcliff (1847) 1 De G &amp; Sm 164 at 178 Knight Bruce V-C said: "Nakedly to declare a right, without doing or directing anything else relating to the right, does not, I conceive, belong to the functions of this Court [of Chancery]."
Case: Sankey v Whitlam [1978] HCA 43 ; (1978) 142 CLR 1
Outcome: cited
There is high authority against the supposed limitation on the exercise of the discretionary power to grant declaratory relief. In Sankey v Whitlam [1978] HCA 43 ; (1978) 142 CLR 1 the High Court, in respect of then current committal proceedings (ie actual, not hypothetical, criminal proceedings) made declarations that (i) certain documents were privileged from production and that (ii) the information laid against Mr Whitlam was bad in law. Gibbs ACJ said at 20-21: "It is well established that the power of the court to make a declaration, under a provision such as s 75 of the Supreme Court Act 1970 (N.S.W.), as amended, or O. 26, r. 19 of the Rules of this Court, is a very wide one: Forster v. Jododex Aust. Pty. Ltd . [1972] HCA 61 ; (1972) 127 CLR 421, at pp 435-436 . It is clear enough that the power of the court is not excluded because the matter as to which a declaration is sought may fall for decision in criminal proceedings. Indeed in Dyson v. Attorney-General [1911] 1 KB 410, which is one of the foundations of the law on this subject, it was held that the court had power to make a declaration that the plaintiff was not under any obligation to comply with the requisitions contained in a notice sent to him by the Commissioners of Inland Revenue, notwithstanding that neglect to comply with the notice was an offence see especially per Farwell L.J. [1911]1 KB, at p 422. Since that time there have been many cases in which the courts have made declarations in relation to questions which could have fallen for decision in criminal proceedings." 57 His Honour observed (at 603) that while ordinarily a declaration is not made that a defendant has committed a crime, there was no doubt that there was jurisdiction to make such a declaration in a proper case: Imperial Tobacco Limited v Attorney-General [1981] AC 718 at 750, Sankey v Whitlam . Thus it was appropriate in many cases for a business person who is told by a regulatory authority that he or she cannot do something to apply for a declaration that the view is erroneous. Conversely, the right was mutual; the Crown could also obtain a declaration that the person's conduct contravened the law. That practice, which was common in New South Wales, had been given the "seal of approval" by the High Court in Australian Softwood .
Case: Imperial Tobacco Limited v Attorney-General [1981] AC 718
Outcome: cited
His Honour observed (at 603) that while ordinarily a declaration is not made that a defendant has committed a crime, there was no doubt that there was jurisdiction to make such a declaration in a proper case: Imperial Tobacco Limited v Attorney-General [1981] AC 718 at 750, Sankey v Whitlam . Thus it was appropriate in many cases for a business person who is told by a regulatory authority that he or she cannot do something to apply for a declaration that the view is erroneous. Conversely, the right was mutual; the Crown could also obtain a declaration that the person's conduct contravened the law. That practice, which was common in New South Wales, had been given the "seal of approval" by the High Court in Australian Softwood .
Case: Australian Securities and Investments Commission v. Atlantic 3 Financial (Aust) Pty Ltd [2006] QCA 540
Outcome: cited
A number of courts have made declarations in cases involving contraventions which carried criminal penalties, albeit with no express discussion of the point raised in Intertax . Nevertheless, the consistent practice is a matter of considerable weight. The cases are: Australian Securities and Investments Commission v Atlantic 3 Financial (Aust) Pty Ltd [2006] QCA 540 (Queensland Court of Appeal), Australian Securities and Investments Commission v PFS Business Development Group Pty Ltd (2006) 57 ACSR 553 (Hargrave J, Supreme Court of Victoria), McDougall (Young J, Federal Court), Australian Securities and Investments Commission v Preston [2005] FCA 1805 (Finkelstein J, Federal Court), Australian Securities and Investments Commission v Drury Management Pty Ltd [2004] QSC 68 (Jones J, Supreme Court of Queensland), Australian Securities and Investments Commission v Young [2003] QSC 29 ; (2003) 21 ACLC 655 (Muir J, Supreme Court of Queensland), Pegasus (Davies AJ, Supreme Court of New South Wales), Australian Securities and Investments Commission v Hutchings (2001) 19 ACLC 1454 (Windeyer J, Supreme Court New South Wales), Australian Securities and Investments Commission v Sweeney [2001] NSWSC 114 (Austin J, Supreme Court of New South Wales).
Case: Australian Securities and Investments Commission v PFS Business Development Group Pty Ltd (2006) 57 ACSR 553
Outcome: cited
A number of courts have made declarations in cases involving contraventions which carried criminal penalties, albeit with no express discussion of the point raised in Intertax . Nevertheless, the consistent practice is a matter of considerable weight. The cases are: Australian Securities and Investments Commission v Atlantic 3 Financial (Aust) Pty Ltd [2006] QCA 540 (Queensland Court of Appeal), Australian Securities and Investments Commission v PFS Business Development Group Pty Ltd (2006) 57 ACSR 553 (Hargrave J, Supreme Court of Victoria), McDougall (Young J, Federal Court), Australian Securities and Investments Commission v Preston [2005] FCA 1805 (Finkelstein J, Federal Court), Australian Securities and Investments Commission v Drury Management Pty Ltd [2004] QSC 68 (Jones J, Supreme Court of Queensland), Australian Securities and Investments Commission v Young [2003] QSC 29 ; (2003) 21 ACLC 655 (Muir J, Supreme Court of Queensland), Pegasus (Davies AJ, Supreme Court of New South Wales), Australian Securities and Investments Commission v Hutchings (2001) 19 ACLC 1454 (Windeyer J, Supreme Court New South Wales), Australian Securities and Investments Commission v Sweeney [2001] NSWSC 114 (Austin J, Supreme Court of New South Wales).
Case: Australian Securities and Investments Commission v Preston [2005] FCA 1805
Outcome: cited
A number of courts have made declarations in cases involving contraventions which carried criminal penalties, albeit with no express discussion of the point raised in Intertax . Nevertheless, the consistent practice is a matter of considerable weight. The cases are: Australian Securities and Investments Commission v Atlantic 3 Financial (Aust) Pty Ltd [2006] QCA 540 (Queensland Court of Appeal), Australian Securities and Investments Commission v PFS Business Development Group Pty Ltd (2006) 57 ACSR 553 (Hargrave J, Supreme Court of Victoria), McDougall (Young J, Federal Court), Australian Securities and Investments Commission v Preston [2005] FCA 1805 (Finkelstein J, Federal Court), Australian Securities and Investments Commission v Drury Management Pty Ltd [2004] QSC 68 (Jones J, Supreme Court of Queensland), Australian Securities and Investments Commission v Young [2003] QSC 29 ; (2003) 21 ACLC 655 (Muir J, Supreme Court of Queensland), Pegasus (Davies AJ, Supreme Court of New South Wales), Australian Securities and Investments Commission v Hutchings (2001) 19 ACLC 1454 (Windeyer J, Supreme Court New South Wales), Australian Securities and Investments Commission v Sweeney [2001] NSWSC 114 (Austin J, Supreme Court of New South Wales).
Case: Australian Securities and Investments Commission v Drury Management Pty Ltd [2004] QSC 68
Outcome: cited
A number of courts have made declarations in cases involving contraventions which carried criminal penalties, albeit with no express discussion of the point raised in Intertax . Nevertheless, the consistent practice is a matter of considerable weight. The cases are: Australian Securities and Investments Commission v Atlantic 3 Financial (Aust) Pty Ltd [2006] QCA 540 (Queensland Court of Appeal), Australian Securities and Investments Commission v PFS Business Development Group Pty Ltd (2006) 57 ACSR 553 (Hargrave J, Supreme Court of Victoria), McDougall (Young J, Federal Court), Australian Securities and Investments Commission v Preston [2005] FCA 1805 (Finkelstein J, Federal Court), Australian Securities and Investments Commission v Drury Management Pty Ltd [2004] QSC 68 (Jones J, Supreme Court of Queensland), Australian Securities and Investments Commission v Young [2003] QSC 29 ; (2003) 21 ACLC 655 (Muir J, Supreme Court of Queensland), Pegasus (Davies AJ, Supreme Court of New South Wales), Australian Securities and Investments Commission v Hutchings (2001) 19 ACLC 1454 (Windeyer J, Supreme Court New South Wales), Australian Securities and Investments Commission v Sweeney [2001] NSWSC 114 (Austin J, Supreme Court of New South Wales).
Case: Australian Securities and Investments Commission v Young [2003] QSC 29 ; (2003) 21 ACLC 655
Outcome: cited
A number of courts have made declarations in cases involving contraventions which carried criminal penalties, albeit with no express discussion of the point raised in Intertax . Nevertheless, the consistent practice is a matter of considerable weight. The cases are: Australian Securities and Investments Commission v Atlantic 3 Financial (Aust) Pty Ltd [2006] QCA 540 (Queensland Court of Appeal), Australian Securities and Investments Commission v PFS Business Development Group Pty Ltd (2006) 57 ACSR 553 (Hargrave J, Supreme Court of Victoria), McDougall (Young J, Federal Court), Australian Securities and Investments Commission v Preston [2005] FCA 1805 (Finkelstein J, Federal Court), Australian Securities and Investments Commission v Drury Management Pty Ltd [2004] QSC 68 (Jones J, Supreme Court of Queensland), Australian Securities and Investments Commission v Young [2003] QSC 29 ; (2003) 21 ACLC 655 (Muir J, Supreme Court of Queensland), Pegasus (Davies AJ, Supreme Court of New South Wales), Australian Securities and Investments Commission v Hutchings (2001) 19 ACLC 1454 (Windeyer J, Supreme Court New South Wales), Australian Securities and Investments Commission v Sweeney [2001] NSWSC 114 (Austin J, Supreme Court of New South Wales).
Case: Australian Securities and Investments Commission v Hutchings (2001) 19 ACLC 1454
Outcome: cited
A number of courts have made declarations in cases involving contraventions which carried criminal penalties, albeit with no express discussion of the point raised in Intertax . Nevertheless, the consistent practice is a matter of considerable weight. The cases are: Australian Securities and Investments Commission v Atlantic 3 Financial (Aust) Pty Ltd [2006] QCA 540 (Queensland Court of Appeal), Australian Securities and Investments Commission v PFS Business Development Group Pty Ltd (2006) 57 ACSR 553 (Hargrave J, Supreme Court of Victoria), McDougall (Young J, Federal Court), Australian Securities and Investments Commission v Preston [2005] FCA 1805 (Finkelstein J, Federal Court), Australian Securities and Investments Commission v Drury Management Pty Ltd [2004] QSC 68 (Jones J, Supreme Court of Queensland), Australian Securities and Investments Commission v Young [2003] QSC 29 ; (2003) 21 ACLC 655 (Muir J, Supreme Court of Queensland), Pegasus (Davies AJ, Supreme Court of New South Wales), Australian Securities and Investments Commission v Hutchings (2001) 19 ACLC 1454 (Windeyer J, Supreme Court New South Wales), Australian Securities and Investments Commission v Sweeney [2001] NSWSC 114 (Austin J, Supreme Court of New South Wales).
Case: Australian Securities and Investments Commission v Sweeney [2001] NSWSC 114
Outcome: cited
A number of courts have made declarations in cases involving contraventions which carried criminal penalties, albeit with no express discussion of the point raised in Intertax . Nevertheless, the consistent practice is a matter of considerable weight. The cases are: Australian Securities and Investments Commission v Atlantic 3 Financial (Aust) Pty Ltd [2006] QCA 540 (Queensland Court of Appeal), Australian Securities and Investments Commission v PFS Business Development Group Pty Ltd (2006) 57 ACSR 553 (Hargrave J, Supreme Court of Victoria), McDougall (Young J, Federal Court), Australian Securities and Investments Commission v Preston [2005] FCA 1805 (Finkelstein J, Federal Court), Australian Securities and Investments Commission v Drury Management Pty Ltd [2004] QSC 68 (Jones J, Supreme Court of Queensland), Australian Securities and Investments Commission v Young [2003] QSC 29 ; (2003) 21 ACLC 655 (Muir J, Supreme Court of Queensland), Pegasus (Davies AJ, Supreme Court of New South Wales), Australian Securities and Investments Commission v Hutchings (2001) 19 ACLC 1454 (Windeyer J, Supreme Court New South Wales), Australian Securities and Investments Commission v Sweeney [2001] NSWSC 114 (Austin J, Supreme Court of New South Wales).
Case: BMI Limited v Federated Clerks Union of Australia (1983) 51 ALR 401
Outcome: cited
Two final points. First, declarations will not usually be made when the only material before the Court is the consent of the parties: BMI Limited v Federated Clerks Union of Australia (1983) 51 ALR 401 at 412. As will have been apparent, in the present case ASIC has presented evidence and submissions. 65 One of the authorities discussed by Young J was BMI . In that case Keely and Beaumont JJ (at 413), after referring to what was said by Buckley LJ and Scarman J in Wallersteiner v Moir [1974] 1 WLR 991 at 1029 and 1030 respectively, said: " ... we think that it is generally undesirable that the court should grant relief by way of declaratory orders under s 108 [of the Conciliation and Arbitration Act 1904 (Cth)] in the absence of any contest on the question." Their Honours acknowledged (at 414) that, if it were demonstrated in a particular case that it were necessary that the question be resolved judicially, it may be appropriate for the court to appoint an amicus curiae to put the contrary view, if any, on the facts and on the questions of law which arise. 66 In BMI not only was there no contradictor, but the particular question that was the subject of the proposed declaration had become academic. Moreover, there were a number of contrary arguments on the merits; see 414-415. The Full Court did not propound any binding proposition of law, still less one which would bind single judges deciding cases under investor protection provisions of corporations legislation. 67 The suggestion of retaining counsel to put a contrary argument as amicus curiae raises the practical question as to who should foot the bill. Certainly it would be unreasonable to impose on the generosity of counsel who have volunteered for pro bono schemes. It is no function of the Court itself to expend money on filling a supposed gap in the range of arguments presented to it by the parties. And ASIC has limited public funds to spend on its important law enforcement functions.