Australian Securities and Investments Commission v Corporate Inspirations Pty Ltd

[1998] FCA 1041

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 3122 of 1998

BETWEEN:

AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
Applicant

AND:

CORPORATE INSPIRATIONS PTY LIMITED
(ACN 080 808 831)
First Respondent

PETER CLARKE
Second Respondent

JUDGE:	EMMETT J
DATE:	9 JULY 1998
PLACE:	SYDNEY

THE COURT ORDERS THAT:

1. The first respondent and the second respondent, by themselves, their servants or agents, be restrained from causing to be published, in connection with the business conducted by the first respondent, an advertisement in the form, or substantially in the form, of annexure “A” to these orders (“the Advertisement”).

1. The first respondent and the second respondent, by themselves, their servants or agents, be restrained from publishing a notice that refers or calls attention, whether directly or indirectly, to any invitation to lend money to, deposit money with or make any investment in connection with the business conducted by the first respondent, unless:

(a)The offers or invitations are excluded invitations as defind by provisions of the Corporations Law, a copy of which provisions is annexure “B” of these orders; or

(b)A current prospectus has been registered by the Australian Securities and Investments Commission.

1. The first respondent and the second respondent, by themselves, their servants or agents, e restrained from accepting monies from any person pursuant to an advertisement in the form, or substantially in the form, of the Advertisement, published prior to these orders.

1. The first respondent and the second respondent each, by 4.00pm Friday 17 July 1998, comply with the respective Notices for Production of documents served upon those parties by the Applicant on 29 June 1998, copies of which are at annexure “C” and annexure “D” of these order, respectively.

1. No order be made as to costs.

1. There be liberty to apply.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 3122 of 1998

BETWEEN:

AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
Applicant

AND:

CORPORATE INSPIRATIONS PTY LIMITED
(ACN 080 808 831)
First Respondent

PETER CLARKE
Second Respondent

JUDGE:	EMMETT J
DATE:	9 JULY 1998
PLACE:	SYDNEY

REASONS FOR JUDGMENT

HIS HONOUR: I have before me an application for orders pursuant to section 1324 of the Corporations Law and section 70 of the Australian Securities Commission Act 1989 (Cth). The proceedings were commenced by the filing of an application on 2 July 1998. I abridged the time for service of that application which was made returnable before me on 6 July 1998. On that occasion there was no appearance for the respondents and I made interlocutory orders on the basis of the evidence then before me and fixed the proceedings for hearing today. Again there is no appearance for the respondents. Accordingly, I am asked to make orders pursuant to the application on the basis of the uncontested evidence of Melissa Jong and Renato Andrea Spurlati being an affidavit of Melissa Yeong of 30 June 1998 and affidavits of Renato Andrea Spurlati sworn 2 July, 3 July and 8 July 1998.

On the basis of the material contained in those affidavits I am satisfied that there has been a contravention of the Corporations Law by the publication of an advertisement in the form of the annexure to the affidavit of Melissa Yeong of 30 June 1998.  By that advertisement either of the respondents, and it is not entirely clear which, invited investment of the sum of $250,000 in the business of the first respondent.  The precise basis of the investment is not clear although statements made by the second respondent suggest that it was intended to be by way of loan.  Whether the intent of the investment was by way of taking up shares in the first respondent or making deposits or loans to the first respondent does not matter.  Either form of investment would be in contravention of the Corporations Law if it was made pursuant to the invitation contained in the advertisement.

In the circumstances, I consider that it is appropriate to make orders restraining the respondents from publishing an advertisement substantially in the form of the advertisement which has already been published.  I also consider that it is appropriate to restrain the respondents from publishing in the future any advertisement which refers or calls attention to any invitation to deposit money with or make any investment in connection with the business conducted by the first respondent unless the Corporations Law is complied with.  In the circumstances it is also appropriate in my view to restrain the respondents from accepting money from any person pursuant to any advertisement which has been published hitherto. 

In addition, the respondents were recipients of notices from the Commission requiring production of records of the second respondent. There has been no compliance with those notices and I am asked to make an order under section 70 of the Australian Securities Commission Act. That section provides that it applies where the Commission is satisfied that a person has, without reasonable excuse, failed to comply with a requirement made under Part 3. Section 70(2) provides that the Commission may by writing certify the failure to the court. Under section 70(3), if the Commission does so certify, the Court may inquire into the case and may order a person to comply with the requirement as specified in the order. I have before me a certificate in writing by the Commission that there has been such failure.

There being no appearance by the respondents, the only inquiry which I need make is into the evidence before.  It seems to me that it is appropriate that I make an order that the respondents comply with the notices.  For the above reasons, I make orders in accordance with the short minutes of order which I have initialled, dated with today's date and will place with the papers.

I certify that this and the preceding two (2) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett

Associate:

Dated:             9 July 1998

Counsel for the Applicant:	W.G. Muddle
Solicitor for the Applicant:	Australian Securities and Investments Commission
Date of Hearing:	9 July 1998
Date of Judgment:	9 July 1998