Corporate Affairs Commission v Solomon

The Corporate Affairs Commission (CAC) brought proceedings against Mr. Solomon, alleging that he had contravened section 129(1) of the Companies (Acquisition of Shares) Act 1980 (Cth) by failing to lodge a substantial shareholder notice. The matter proceeded to the Supreme Court of New South Wales, Court of Appeal.

The central legal issue before the Court of Appeal was whether Mr. Solomon was a "person" within the meaning of section 129(1) of the Act, which required notification of acquisition of a substantial shareholding. This question turned on whether Mr. Solomon, as a trustee of a discretionary trust, could be considered the beneficial owner of the shares held by the trust for the purposes of the Act, or if the trust itself was the relevant entity.

The Court of Appeal, in dismissing the appeal, held that the definition of "person" in the Act was broad enough to encompass a trustee in their capacity as such, and that the beneficial ownership of the shares was to be attributed to the trustee, Mr. Solomon. The Court reasoned that the purpose of the Act was to ensure transparency in share acquisitions, and that to exclude a trustee from the notification requirements would frustrate this objective. The Court applied the principle that statutory provisions should be interpreted to give effect to their intended purpose, and that the beneficial interest in the shares was effectively held by the trustee.