Australian Securities Commission v United Tree Farmers Pty Ltd

This is an application brought by the Australian Securities Commission (“the ASC”) seeking a declaration that the five respondent companies, which are all owned and operated by various members of a family, have been participants in an investment scheme involving invitations to subscribe for “prescribed interests” in contravention of sections 1018(1), 1064(1) and 1065(1) of the Corporations Law. The five respondents are United Tree Farmers Pty Ltd, Transgrowth Association (Aust) Ltd, Hyswin (North) Ltd, Syfind (Finances) Pty Ltd and Tea Tree Oil Company of North Queensland Pty Ltd. The ASC argues that the respondents, in varying ways and in different degrees, have some involvement in an activity where individual investors take individual “occupation interests” in strips of contiguous land on two properties in North Queensland. The investors have their strips managed by United as a service company, Tea trees are planted and grown on the land and while no express agreement to harvest the trees for the purpose of extracting tea tree oil is offered as part of the investment package, such profit as is to be derived from the investment comes from projected oil production. The investment is marketed in a number of States (notably Queensland, Victoria and South Australia), and is facilitated by the availability of financial services offered by Syfind. The ASC's case is that this “package” involves the offering of a “prescribed interest” as defined in s9 of the Corporations Law. If such is the case then it is conceded that the prospectus and other provisions of the Corporations Law have not been complied with. Given what is said to be the reality of the activity, it is alleged that Transgrowth (the property holder), United (the manager) and Syfind (the financier) at the least are participants in it. It is alleged additionally that TTOCNQ (the harvester) and/or Hyswin (the lessor to Transgrowth) are relevantly participants. In these latter claims, as will be seen, the alleged “association” of the various companies through their directors and members is advanced as being of real significance. The Court found that the five respondents, in varying ways and in different degrees, have some involvement in an activity where individual investors take individual “occupation interests” in strips of contiguous land on two properties in North Queensland. The Court found that the activity was an investment scheme involving invitations to subscribe for “prescribed interests” in contravention of sections 1018(1), 1064(1) and 1065(1) of the Corporations Law. The Court made a declaration relating to the contraventions and ordered the appointment of a receiver and manager of the property of United.