MEC Resources Ltd and Industry Innovation and Science Australia

This matter concerned an application for review by MEC Resources Ltd (the Applicant) of a decision to revoke its registration as a Pooled Development Fund (PDF) under the *Pooled Development Funds Act 1992* (PDFA). The Applicant had been found to have contravened several provisions of the PDFA, including failures to comply with conditions imposed on an approval, making investments contrary to capital limits, and failing to notify the Board of certain events. Industry Innovation and Science Australia (the Respondent) had made the decision to revoke the Applicant's registration.

The primary legal issues before the court were whether the revocation of the Applicant's PDF registration was an appropriate sanction, and whether the Applicant had been afforded procedural fairness. Specifically, the Applicant argued that the revocation was the "ultimate sanction" and should only be applied as a last resort, that the alleged breaches did not subvert the objects of the PDFA, and that a new ground for cancellation, relating to sections 20A and 20B of the PDFA, had been introduced late in the proceedings, thereby breaching procedural fairness.

The court reasoned that the power to cancel a PDF's registration under section 47(1) of the PDFA was discretionary and that revocation should be considered the ultimate sanction, to be applied only when other avenues were unavailable or insufficient. It found that the claimed breaches, particularly those concerning reporting obligations, did not subvert the fundamental objects of the PDFA, which were to foster equity capital for small and medium-sized Australian enterprises. Furthermore, the court noted that the breaches occurred under previous management and that the Applicant had since implemented new compliance procedures. The court also found that the introduction of the section 20A and 20B breach argument in the Respondent's closing submissions, without prior identification in the Respondent's Statement of Findings of Fact and Contentions or initial submissions, constituted a breach of procedural fairness.

Consequently, the court set aside the revocation order. The court substituted an order that the Applicant's registration declaration as a PDF be revoked, but that the revocation be suspended indefinitely, provided the Applicant complied with certain conditions, including ongoing reporting and adherence to the PDFA.