Australian Securities Commission v Cooke, Allan & Anor [1996] FCA 1101

Australian Securities Commission v Cooke, Allan & Anor [1996] FCA 1101

There was a serious question to be tried that the letter solicited Earth Family Trust unit holders to receive units in Enviro Trust, which were arguably participation interests, prescribed interests and securities, and that the letter contravened Corporations Law ss1018 and 1065. The respondents' exemption, no-consideration, territorial nexus, in-principle, unit-holder approval and trust-deed arguments did not defeat that serious question. The balance of convenience favoured restraining further invitations and issues because investors might otherwise make decisions sending assets offshore without a prospectus, while the respondents would suffer only short deferral if ultimately...

Jurisdiction
Australia
Judgment Date
23 October 1996
Procedural Posture
Urgent Notice of Motion for Interim Orders Pursuant to Corporations Law S1324(4) or Alternatively S1114 Seeking Interim Injunctions and Appointment of a Receiver and Manager / Interlocutory Application
Outcome
Interim injunctions granted and receiver and manager appointed until the hearing of the application or further order; respondents ordered to pay the applicant's costs of the application for interim orders.
Legal Topics
['interim Injunctions' 'prospectus Requirements' 'prescribed Interests' 'invitation to Subscribe for Securities' 'excluded Issue Exemption' 'territorial Nexus' 'appointment of Receiver and Manager' 'protection of Unit Holders']
['equity' 'corporations Law'] ['interim Injunctions' 'prospectus Requirements' 'prescribed Interests' 'invitation to Subscribe for Securities' 'excluded Issue Exemption' 'territorial Nexus' 'appointment of Receiver and Manager' 'protection of Unit Holders']

Case Brief

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Procedural Posture

Urgent Notice of Motion for Interim Orders Pursuant to Corporations Law S1324(4) or Alternatively S1114 Seeking Interim Injunctions and Appointment of a Receiver and Manager / Interlocutory Application

Legal Issues

  1. 1 ['Whether there was a serious question to be tried that the 23 September 1996 letter invited unit holders in the Earth Family Trust to subscribe for securities or prescribed interests in Enviro Trust in contravention of Corporations Law ss1018 and 1065.' "Whether the respondents' arguments about exemption, absence of consideration, absence of territorial nexus, the true character of the letter, unit holder approval, and compliance with the trust deed defeated the existence of a serious question to be tried." 'Whether the balance of convenience favoured interim injunctive relief restraining invitations to subscribe for and issues of securities in Enviro Trust unless authorised by the Corporations Law.' 'Whether the preconditions in Corporations Law s1323 were satisfied for appointment of a receiver and manager.' 'Whether appointment of a receiver and manager of the property of the Earth Family Trust was necessary or desirable to protect unit holders, or whether a lesser remedy was sufficient.']

Ratio Decidendi

There was a serious question to be tried that the letter solicited Earth Family Trust unit holders to receive units in Enviro Trust, which were arguably participation interests, prescribed interests and securities, and that the letter contravened Corporations Law ss1018 and 1065. The respondents' exemption, no-consideration, territorial nexus, in-principle, unit-holder approval and trust-deed arguments did not defeat that serious question. The balance of convenience favoured restraining further invitations and issues because investors might otherwise make decisions sending assets offshore without a prospectus, while the respondents would suffer only short deferral if ultimately...

Court Disposition

Interim injunctions granted and receiver and manager appointed until the hearing of the application or further order; respondents ordered to pay the applicant's costs of the application for interim orders.

Orders

  • ['Until the hearing of the application or further order, the first respondent was restrained from issuing invitations to subscribe for securities in Enviro Trust, or being directly or indirectly knowingly concerned in or party to such invitations, unless authorised by the Corporations Law.' 'Until the hearing of the...