Australian Securities Commission v Stephen Su No. SCGRG 94/188 Judgment No. 4672 Number of Pages 8 Corporations Companies Offences (1994) 12 Aclc 537 (1994) 13 Acsr 818 - [1994] SASC 4672

COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA BOLLEN J

CWDS
Corporations - companies offences - Corporations Law - s1064 prohibition on offering for subscription or purchase of any prescribed interest - exempt rights or interests Regulation 7.12.04(c)(i) - creating of three trusts to "run" the scheme - "right or interest in a trust or proposed trust" still exempt despite the setting up of three trusts because the "scheme" was always the one scheme. Corporations Laws1064, s9, s1311. Australian Securities Commission v Woods and Ors (1991) 6 ACSR 191, distinguished.

HRNG ADELAIDE, 30 June 1994 #DATE 15:7:1994

Counsel for appellant: Mr S.F Vorrieter

Solicitors for appellant: DPP (Cwlth)

Respondent in person

ORDER
Appeal dismissed.

JUDGE1 BOLLEN J I need not identify the appellant nor recite the nature of its work.

2. The appellant as informant charged the respondent on 11 counts on Information. Each count alleged a breach of section 1064(1) of the Corporations Law. By way of example I recite count 1.
    "1. Between 1st July 1991 and 31st August 1991 at
    Adelaide in the State of South Australia, being persons
    other than a public corporation, issued an invitation to
    John Adrian Fitzgerald to subscribe for or buy a
prescribed interest within the meaning of Section 9 of
    the Corporations Law; contrary to Section 1064(1) of the
    Corporations Law. Particulars (a) At all relevant times
    the defendants were the promoters of a business scheme
    to manufacture and market food containers known as
    'Potato Cups' within the State of South Australia.
    (b) The defendants invited John Adrian Fitzgerald to
    invest monies in the said business scheme in return for
    a right to participate in the profits and assets of the
    said business scheme.
    (c) At all relevant times the defendants were not public
corporations within the meaning of Section 9 of the
    Corporations Law and were not the servants or agents of
    any relevant public corporation."

3. The respondent denied each charge. The parties agreed that the Information could be heard as a summary matter.

4. The Information was heard "on" agreed facts. The facts were those stated by the prosecuting counsel, Mr Vorreiter, in opening.

5. The opening statement was a clear and thorough statement of fact and law.

6. Section 1064(1) of the Corporations Law is:-
    2 "A person, other than a public corporation, must not
    make available, offer for subscription or purchase, or
    issue an invitation to subscribe for or buy, any
    prescribed interest."

7. The magistrate stated the facts and the relevant statutory provisions very clearly and as succinctly as was possible. I transfer from his reasons to these reasons what he said without any further indication of that transfer. What follows now from the words "A breach" until the words "... defendant and Wilson" is a passage taken verbatim from the reasons of the magistrate.
"A breach of s.1064 is made an offence by operation of
s.1311 of the Law. The elements of the offence are:…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Australian Securities Commission v Stephen Su No. SCGRG 94/1...

Details

AGLC: Australian Securities Commission v Stephen Su No. SCGRG 94/188 Judgment No. 4672 Number of Pages 8 Corporations Companies Offences (1994) 12 Aclc 537 (1994) 13 Acsr 818 [1994] SASC 4672
Case: [1994] SASC 4672
Decision Date: 15 July 1994

CaseChat Overview and Summary

In the Supreme Court of South Australia, Bollen J presided over the appeal brought by the Australian Securities Commission against Stephen Su, concerning multiple counts of alleged breaches of section 1064(1) of the Corporations Law. Each count involved the offer for subscription or purchase of a prescribed interest in a business scheme for manufacturing and marketing potato cups. The appellant argued that the setting up of three trusts to run the scheme should not exempt the rights or interests under Corporations Regulation 7.12.04(c)(i). The respondent, represented in person, contended that the scheme was always one single scheme despite the creation of the trusts, and thus the exemption should apply.

The court needed to determine whether the exemption for rights or interests in a trust or proposed trust under Regulation 7.12.04(c)(i) applied, particularly whether the scheme was promoted by someone whose ordinary business included the promotion of similar schemes. The magistrate had dismissed the charges, finding that the creation of three trusts did not make the scheme any less exempt because it was always intended as one single scheme. The appellant appealed, arguing that the magistrate had erred in exempting the scheme.

Bollen J dismissed the appeal, agreeing with the magistrate's reasoning. The court held that the exemption applied because the trusts were created to implement one single scheme for manufacturing and marketing potato cups, not to promote multiple similar schemes. The use of the singular "Trust deed or proposed Trust deed" in the regulation could encompass multiple deeds for one collective scheme. Bollen J found no error in the magistrate's interpretation and dismissed the appeal, affirming the decision to dismiss the charges.

Orders