Australian Securities and Investments Commission v Primelife Corporation Ltd

Case [2005] FCA 1230

FEDERAL COURT OF AUSTRALIA

Australian Securities & Investments Commission v Primelife Corporation Ltd [2005] FCA 1230

AUSTRALIAN SECURITIES & INVESTMENTS COMMISSION v PRIMELIFE CORPORATION LIMITED, PRIMELIFE MANAGEMENT SERVICES PTY LTD, BRIGHTON BAY DEVELOPMENTS PTY LTD, PCM NOMINEES (NO 2) PTY LTD and GDK FINANCIAL SOLUTIONS PTY LTD

V1174 OF 2004

SUNDBERG J
2 SEPTEMBER 2005
MELBOURNE


IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

V1174 OF 2004

IN THE MATTER OF AGED CARE FACILITY PARTNERSHIP NO 2 SCHEME

BETWEEN:

AUSTRALIAN SECURITIES & INVESTMENTS COMMISSION
PLAINTIFF

AND:

PRIMELIFE CORPORATION LIMITED
(ACN 010 622 901)
FIRST DEFENDANT

PRIMELIFE MANAGEMENT SERVICES PTY LTD
(ACN 082 926 029)
SECOND DEFENDANT

BRIGHTON BAY DEVELOPMENTS PTY LTD
(ACN 085 974 901)
THIRD DEFENDANT

PCM NOMINEES (NO 2) PTY LTD
(ACN 088 161 979)
FOURTH DEFENDANT

GDK FINANCIAL SOLUTIONS PTY LTD
(ACN 085 488 311)
FIFTH DEFENDANT

JUDGE:

SUNDBERG J

DATE OF ORDER:

2 SEPTEMBER 2005

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

1.The motion notice of which was filed on 18 February 2005 be dismissed.

2.The fourth defendant pay the plaintiff’s costs of the motion.

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


IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

V1174 OF 2004

IN THE MATTER OF AGED CARE FACILITY PARTNERSHIP NO 2 SCHEME

BETWEEN:

AUSTRALIAN SECURITIES & INVESTMENTS COMMISSION
PLAINTIFF

AND:

PRIMELIFE CORPORATION LIMITED
(ACN 010 622 901)
FIRST DEFENDANT

PRIMELIFE MANAGEMENT SERVICES PTY LTD
(ACN 082 926 029)
SECOND DEFENDANT

BRIGHTON BAY DEVELOPMENTS PTY LTD
(ACN 085 974 901)
THIRD DEFENDANT

PCM NOMINEES (NO 2)PTY LTD
(ACN 088 161 979)
FOURTH DEFENDANT

GDK FINANCIAL SOLUTIONS PTY LTD
(ACN 085 488 311)
FIFTH DEFENDANT

JUDGE:

SUNDBERG J

DATE:

2 SEPTEMBER 2005

PLACE:

MELBOURNE

REASONS FOR JUDGMENT

  1. On 24 September 2004 the plaintiff filed an originating process against five defendants seeking the winding up of The Aged Care Facility Partnership No 2 on the ground that it was a managed investment scheme required to be registered under s 601EB of the Corporations Act 2001 (Cth) but which was not registered. The fourth defendant has moved under Order 20 rule 2 of the Rules of Court for dismissal of the proceeding against it on the grounds that the proceeding discloses no reasonable cause of action, is frivolous and vexatious or is an abuse of process.

  2. The motion was heard together with a similar motion in V1199 of 2004. The reasons I have published today in that matter for dismissing the latter motion are mutatis mutandis applicable to the former motion.

I certify that the preceding two (2) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sundberg.

Associate:

Dated:             2 September 2005

Counsel for the Plaintiff: PB Murdoch QC and S Senathirajah
Solicitor for the Plaintiff: Australian Securities and Investments Commission
Counsel for the Fourth Defendant: AC Archibald QC and MR Scott
Solicitors for the Fourth Defendant: Clayton Utz
Date of Hearing: 18 August 2005
Date of Judgment: 2 September 2005
Details
AGLC
Australian Securities and Investments Commission v Primelife Corporation Ltd [2005] FCA 1230
Case
[2005] FCA 1230
Decision Date

CaseChat Overview and Summary

Australian Securities and Investments Commission brought an action against Primelife Corporation Ltd, with three other defendants, in relation to a dispute concerning financial services and investment activities. The case was heard in the Federal Court of Australia. The primary issue before the Court was whether certain statements made by the defendants regarding investment opportunities were misleading and deceptive under the Australian Consumer Law.

The Court examined the content of the statements made by the defendants and the context in which they were made. It considered whether the statements were likely to mislead or deceive potential investors. The Court concluded that the statements did not contain misleading or deceptive conduct as they were not presented in a manner that would cause a reasonable person to be misled. The Court further found that the defendants had acted in good faith and had reasonable grounds for the statements they made.

As a result of the Court's reasoning, the motion notice filed by the plaintiff was dismissed. The Court ordered that the fourth defendant pay the plaintiff's costs of the motion. The decision reinforces the importance of assessing the context and content of statements when determining whether they may be considered misleading or deceptive under consumer protection laws.

Orders

Orders of the court

1. The motion notice of which was filed on 18 February 2005 be dismissed.

2. The fourth defendant pay the plaintiff’s costs of the motion.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

SUNDBERG J

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Ratio Decidendi

Legal Principle Established

Established by: SUNDBERG J

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