Australian Securities and Investment Commission v Cardinal Financial Securities Limited & 1 Ors [1999] NSWSC 1289

Australian Securities and Investment Commission v Cardinal Financial Securities Limited & 1 Ors [1999] NSWSC 1289

ASIC had established an arguable case of unlawful inadequate disclosure to participants, so an injunction under s1324 of the Corporations Law was appropriate. However, because participants representing the necessary majority were expected to confirm they were adequately informed and would still vote for the...

Source-derived case information.

Jurisdiction
Australia
Judgment Date
21 December 1999
Procedural Posture
Application by Summons for Injunction Under S1324 of the Corporations Law / Ex Tempore Judgment on Interlocutory Injunction Application
Outcome
Injunction granted unless specified conditions were satisfied; ASIC's costs of the application ordered to be paid by the Defendant.
Legal Topics
['asic Injunction' 'prescribed Interest Scheme' 'disclosure to Scheme Participants' 'meeting of Participants' 'amendment of Trust Deed' 'balance of Convenience']
['corporations Law' 'equity'] ['asic Injunction' 'prescribed Interest Scheme' 'disclosure to Scheme Participants' 'meeting of Participants' 'amendment of Trust Deed' 'balance of Convenience']

Source-derived case record

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Procedural Posture

Application by Summons for Injunction Under S1324 of the Corporations Law / Ex Tempore Judgment on Interlocutory Injunction Application

Legal Issues

  1. 1 ['Whether the Second Defendant should be restrained from holding a meeting of participants in the First TrackNet Project because the explanatory material arguably contravened the Corporations Law by insufficient disclosure.' 'Whether the balance of convenience justified allowing the meeting to proceed if conditions were first satisfied, including affidavits from participants and safeguards concerning ASIC approval of the amending deed.' 'Whether the associated issue of shares in TNL may have required a prospectus.']

Ratio Decidendi

ASIC had established an arguable case of unlawful inadequate disclosure to participants, so an injunction under s1324 of the Corporations Law was appropriate. However, because participants representing the necessary majority were expected to confirm they were adequately informed and would still vote for the resolutions, and because further undertakings and ASIC approval safeguards would preserve the policy and enforcement of the law, the injunction was granted only unless specified conditions were first satisfied.

Court Disposition

Injunction granted unless specified conditions were satisfied; ASIC's costs of the application ordered to be paid by the Defendant.

Orders

  • ["ASIC's costs of this application shall be paid by the Defendant." 'Pursuant to s1324 of the Corporations Law, the Second Defendant not hold the meeting convened for 9.30 am on 22 December 1999 of participants in the First TrackNet Project unless the specified affidavits, undertakings and withdrawal conditions have...