Australian Securities and Investments Commission v Edwards

The Australian Securities and Investments Commission (ASIC) brought proceedings against various respondents to wind up two managed investment schemes, the Carsworthy Scheme and the Edwardian Associates Scheme, as well as other associated companies. The primary contention was whether the schemes constituted managed investment schemes under the Corporations Act 2001 (Cth), and if so, whether winding up was warranted due to their operation. Additionally, the court needed to determine if it had the jurisdiction to wind up the companies involved, especially given that some were foreign and unregistered in Australia.

The court needed to address several legal issues. Firstly, it had to ascertain whether the Carsworthy Scheme and the Edwardian Associates Scheme were managed investment schemes, considering the pooling of contributions and their use in a common enterprise. Secondly, the court needed to determine if the operation of these schemes amounted to the carrying out of activities warranting their winding up under section 601EE of the Corporations Act. It also needed to consider whether the companies involved should be wound up under sections 461 and 583 of the Act, given their involvement in the operation of these schemes. Moreover, the court had to examine whether it had jurisdiction to wind up the companies, especially those that were foreign and unregistered in Australia, and if doing so would be just and equitable.

The court found that both the Carsworthy Scheme and the Edwardian Associates Scheme were indeed managed investment schemes. It held that their operation was misleading and deceptive, and warranted winding up under section 601EE of the Corporations Act. The court also concluded that it had jurisdiction to wind up the companies involved, even though some were foreign and unregistered in Australia. The winding up was deemed just and equitable under section 583 of the Act. The court appointed Ian Richard Hall and Martin Russell Brown as receivers and managers for winding up the schemes and as liquidators for the companies involved. It also ordered that the costs of the proceedings be paid from the assets of the third respondent.

In conclusion, the court ordered the winding up of both managed investment schemes and the associated companies, finding them to be managed investment schemes under the Corporations Act. The winding up was justified on the grounds of misleading and deceptive conduct and was deemed just and equitable. The court also appointed Ian Richard Hall and Martin Russell Brown to oversee the winding up processes and ordered the payment of costs from the assets of the third respondent.