Case: Corporate Affairs Commission (NSW) v Transphere Pty Ltd (1988) 15 NSWLR 596
Outcome: followed
In Corporate Affairs Commission (NSW) v Transphere Pty Ltd (1988) 15 NSWLR 596 Young J gave detailed consideration to the appropriateness of declarations in respect of breaches of the Companies (New South Wales) Code dealing with prescribed interests and offers to the public. Criminal proceedings were not only possible; they had taken place and the individual primarily involved had been convicted and was serving a term of imprisonment. 59 Transphere does not provide any support for the limitation of the discretion to make declarations in cases like the present; indeed it is to the contrary. 63 Secondly, it is said there must be "a proper contradictor, that is to say, some one presently existing who has a true interest to oppose the declaration sought": Russian Commercial &amp; Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 AC 438 at 448, Forster v Jododex Australia Pty Limited [1972] HCA 61 ; (1972) 127 CLR 421 at 437, Transphere at 605. 64 In the present case the defendants were represented but did not oppose the making of the declarations sought, or indeed any orders sought. Transphere is to an extent comparable in that the defendant in that case appeared and did not oppose the declaration. However, he we not legally represented. Young J (at 605-608) extensively reviewed the case law. His Honour (at 608) accepted the submission that the law as to declaratory judgments had developed to such a stage that declaration should be made unless there are proper grounds to the contrary, subject to the proviso that a "legitimate and powerful" factor against the grant would be the possibility of embarrassment in a practical sense to a non-party. As has been noted ([58] above) his Honour found that in the circumstances of the case before him such embarrassment did exist and on that ground declined a declaration. 68 In the present case, there being no suggestion of any embarrassment to non-parties in the present case, I will follow the principle accepted by Young J in Transphere . 69 I will make the declarations referred to above ([46]), and the following orders: 1. Pursuant to s 1324(1) of the Corporations Act 2001 (Cth) the fifth defendant be permanently restrained whether by himself, his servants or agents or otherwise from further operating or promoting the scheme. 2. Pursuant to ss 1101B and 1324 (1) of the Corporations Act 2001 (Cth) the fifth defendant be permanently restrained whether by himself, his servants or agents or otherwise from: (a) carrying on any business related to, concerning or directed to be a managed investment scheme within the meaning of the Corporations Act 2001 (Cth); (b) being in any way, directly or indirectly, knowingly concerned in or a party to the promotion or establishment of, or the carrying on of the business of, a managed investment scheme within the meaning of the Corporations Act 2001 (Cth); that requires, in any case, registration under s 601ED of the Corporations Act 2001 (Cth) and has not been so registered. 3. Pursuant to ss 1101B and 1324 (1) of the Corporations Act 2001 (Cth) the fifth defendant be restrained, whether by himself, his servants or agents or otherwise from carrying on business in relation to financial products or financial services by: (a) providing financial product advice; (b) dealing in financial products; without holding an Australian financial services licence. 4. The scheme be wound up pursuant to s 601EE(1) of the Corporations Act 2001 (Cth). 5. Pursuant to s 601EE(2) George Georges and Adrian Brown (who were appointed receivers of the property of the scheme and to report on the scheme by Order of Justice Young made 20 July 2006) be appointed joint and several liquidators of the scheme. 6. The liquidators have the power to do, in Australia and elsewhere, all things necessary or convenient to be done for or in connection with the winding up of the scheme, or incidental to the attainment of the winding up of the scheme, including the powers identified in s 477 of the Corporations Act 2001 (Cth) as each reference there to a "company" were a reference to the scheme. 7. The reasonable costs and expenses of the winding up of the scheme be paid out of the assets of the scheme. 8. To the extent that the sum paid to the liquidators under Order 7 is insufficient to meet the reasonable remuneration, costs fees and expenses of the liquidators, any shortfall is to be paid by the fifth defendant. 9. Pursuant to s 461(1)(k) of the Corporations Act 2001 (Cth) the first, second, third and fourth defendants be wound up and that George Georges and Adrian Brown be appointed joint and several liquidators. 10. The restraining orders extended by Order made on 19 December 2006 (and originally made by paragraphs 11 and 12 of the Orders made on 20 July 2006) against the fifth, sixth and seventh defendants be vacated. 11. Paragraph 4 of the Order made on 17 July 2006, that the fifth to seventh defendants deliver up their passports, be vacated and the Registry make any passport delivered up in accordance with the order available for collection by the relevant defendant at the registry office where it is presently held. 12. The fifth defendant deliver his passport to his trustee in bankruptcy forthwith, pursuant to s 77(1)(a)(ii) of the Bankruptcy Act 1966 (Cth). 13. The fifth defendant not leave Australia during the period of his bankruptcy until 7 days after he has given ASIC written notice of his request to his trustee in bankruptcy for consent to leave Australia pursuant to s 272(1)(c) of the Bankruptcy Act 1966 (Cth). 14. The fifth defendant pay the plaintiff's costs of this proceeding including reserved costs. 15. The proceeding be dismissed against the sixth and seventh defendants with no order as to costs. 16. The proceeding otherwise be dismissed. I certify that the preceding sixty-nine (69) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice HEEREY. Associate: Dated: Counsel for the Plaintiff M Scott Solicitor for the Plaintiff Australian Securities and Investments Commission Solicitor for the Receivers of the First to Fourth Defendants Dibbs Abbott Stillman Counsel for the Fifth Defendant M Bromley Solicitor for the Fifth Defendant Corrs Chambers Westgarth Counsel for the Sixth and Seventh Defendants N Evans Solicitor the Sixth and Seventh Defendants Baker &amp; McKenzie Date of Hearing: 20 June 2007 Date of Judgment: 29 June 2007 SCHEDULE The "scheme" is the "FUELbanc" scheme pursuant to which: 1. Investors give money and barter units known as "trade dollars" to the first defendant in exchange for a promise to pay weekly instalments into a debit card for use by each investor at service stations. 2. The first to fifth defendants invested or were to invest the money and barter units received from investors to produce the benefit of the credit to be provided on debit cards. . SCHEDULE OF PARTIES AUSTRALIAN SECURITIES &amp; INVESTMENTS COMMISSION Plaintiff - and - FUELBANC AUSTRALIA LIMITED (ACN 117 937 327) ("FUELbanc") First Defendant - and - PAYCARDS GLOBAL PTY LTD (ACN 116 759 472) ("PayCards Global") Second Defendant - and - PAYCARDS INVESTMENTS PTY LTD (ACN 118 252 369) ("Paycards Investments") Third Defendant - and - PC PROPERTY GROUP PTY LTD (ACN 118 252 387) ("PC Property Group") Fourth Defendant - and - STEPHEN JOHN MCDOUGALL ("McDougall") Fifth Defendant - and - TIMOTHY ROSS MCDOUGALL ("Timothy McDougall") Sixth Defendant - and - MATTHEW ALAN MCDOUGALL ("Matthew McDougall") Seventh Defendant AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2007/960.html