Emu Brewery Mezzanine Ltd (in liq) v Australian Securities and Investments Commission

Emu Brewery Mezzanine Ltd (in liquidation) was the appellant and Australian Securities and Investments Commission (ASIC) was the respondent in this case before the High Court. The central issue was whether promissory notes issued by the appellant were subject to the disclosure requirements of the Corporations Act 2001 (Cth). ASIC argued that the notes were subject to the disclosure requirements, while the appellant contended they were not.

The legal issue before the Court was whether the promissory notes issued by the appellant constituted 'debentures' under the Corporations Act 2001 (Cth). This hinged on whether the contract between the appellant and each investor included an implied undertaking to repay which was independent of the promise to pay contained in the notes. The Court needed to determine if the right of early repayment conferred by the contract between the appellant and each investor was contained or referred to in the notes. Additionally, the Court had to decide if the notes issued by the appellant were 'promissory notes' as defined in s 89(1) of the Bills of Exchange Act 1909 (Cth) and for the purposes of par (d) of the definition of 'debenture' in s 9 of the Corporations Act 2001 (Cth).

The Court held that the promissory notes were not 'debentures' within the meaning of the Corporations Act 2001 (Cth). The promissory notes were not issued on terms which conferred on the appellant a right of early repayment. The Court reasoned that the contract between the appellant and each investor did not include an implied undertaking to repay which was independent of the promise to pay contained in the notes. The right of early repayment was not contained or referred to in the notes. The Court concluded that the notes were not 'promissory notes' as defined in s 89(1) of the Bills of Exchange Act 1909 (Cth) and for the purposes of par (d) of the definition of 'debenture' in s 9 of the Corporations Act 2001 (Cth).

The Court ordered that the appeal be dismissed with costs.