National Australia Bank Ltd v Norman [2009] FCAFC 152

National Australia Bank Ltd v Norman [2009] FCAFC 152

There was no evidence establishing that McFarlane operated a managed investment scheme as defined by s 9 of the Corporations Act, as there was no objective intention or prior plan that the funds contributed by investors were to be pooled or used in a common enterprise to produce benefits for those holding interests....

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Parties
Appellant: National Australia Bank Limited; First Respondent: Trevor Gilbert Norman; Second Respondent: Executors and Trustees of the Deceased Estate of Allan McFarlane
Jurisdiction
Australia
Judgment Date
30 October 2009
Procedural Posture
Appeal / Full Court Judgment on Appeal From Single Judge of the Federal Court of Australia
Outcome
Appeal allowed; winding up orders set aside
Legal Topics
Managed Investment Schemes, Statutory Interpretation, Bankruptcy of Deceased Estates, Trust Property, Pooling of Funds
Bankruptcy Corporations Managed Investment Schemes Statutory Interpretation Bankruptcy of Deceased Estates Trust Property Pooling of Funds

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Parties

National Australia Bank Limited

Appellant

Trevor Gilbert Norman

First Respondent

Executors and Trustees of the Deceased Estate of Allan McFarlane

Second Respondent

Procedural Posture

Appeal / Full Court Judgment on Appeal From Single Judge of the Federal Court of Australia

Legal Issues

  1. 1 Whether the scheme operated by Allan McFarlane was a 'managed investment scheme' under s 9 of the Corporations Act 2001 (Cth)
  2. 2 Whether the conditions for pooling of contributions under the definition of 'managed investment scheme' were satisfied
  3. 3 Whether the Court had power to wind up the alleged unregistered managed investment scheme under s 601EE of the Corporations Act

Ratio Decidendi

There was no evidence establishing that McFarlane operated a managed investment scheme as defined by s 9 of the Corporations Act, as there was no objective intention or prior plan that the funds contributed by investors were to be pooled or used in a common enterprise to produce benefits for those holding interests. Instead, investments were made and administered individually, and commingling in an account did not meet the statutory requirement for pooling. Consequently, the winding up orders should not have been made.

Court Disposition

Appeal allowed; winding up orders set aside

Orders

  • The appeal be allowed.
  • The declaration and orders of Mansfield J made on 28 November 2008 as varied on 2 June 2009 be set aside and in their place the application for a winding up order dated 8 September 2008 be dismissed.