Australian Securities Commission v Madison Pacific Property Management Pty Ltd [1998] FCA 717

Australian Securities Commission v Madison Pacific Property Management Pty Ltd [1998] FCA 717

The combined offer, specifically where management of the franchised business is to be exclusively undertaken by a third party associated with the franchisor, is not an exempt franchise interest under reg 1.02; instead, the arrangement constitutes a prescribed interest under Pt 7.12 of the Corporations Law because the investor's profit is expected to be derived from the efforts of the manager rather than from the investor's own conduct of the business.

Jurisdiction
Australia
Judgment Date
23 June 1998
Procedural Posture
Civil / Judgment
Outcome
Orders granted as sought by the Australian Securities Commission; Commission to file a minute of proposed orders.
Legal Topics
['prescribed Interests' 'franchises' 'investment Schemes' 'common Enterprise' 'definition of Franchise' 'exempt Rights' 'management Agreements']
['corporations Law' 'equity and Trusts' 'commercial Law'] ['prescribed Interests' 'franchises' 'investment Schemes' 'common Enterprise' 'definition of Franchise' 'exempt Rights' 'management Agreements']

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 1 Authorities cited 2 Party arguments 2 Amounts and remedies 1
Sign in to unlock

Procedural Posture

Civil / Judgment

Legal Issues

  1. 1 ['Whether the offer of management services by Madison Pacific Management forms part of the offer of an interest as franchisee in a franchise and is therefore exempt from the Corporations Law regime for prescribed interests.' "Whether the combined package offered constitutes a 'prescribed interest' under Pt 7.12 of the Corporations Law or is exempt as a franchise."]

Ratio Decidendi

The combined offer, specifically where management of the franchised business is to be exclusively undertaken by a third party associated with the franchisor, is not an exempt franchise interest under reg 1.02; instead, the arrangement constitutes a prescribed interest under Pt 7.12 of the Corporations Law because the investor's profit is expected to be derived from the efforts of the manager rather than from the investor's own conduct of the business.

Court Disposition

Orders granted as sought by the Australian Securities Commission; Commission to file a minute of proposed orders.

Orders

  • ['The applicant is to file a minute of proposed orders pursuant to the reasons delivered.' 'Orders consistent with the application granted: restraint on the respondents from continuing the conduct in breach of s 1064 of the Corporations Law.']