Spicer Thoroughbreds Pty Ltd v Stewart - [2023] NSWCA 82

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation: Spicer Thoroughbreds Pty Ltd v Stewart [2023] NSWCA 82
Hearing dates: 11 April 2023
Date of orders: 02 May 2023
Decision date: 02 May 2023
Before: Leeming JA at [1];
Mitchelmore JA at [92];
Griffiths AJA at [93]
Decision:
In 2022/167408:
1. Dismiss the notice of appeal as incompetent.
2. No order as to the costs of the appeal, with the intent that the parties bear their own costs of the proceedings in the Court of Appeal.
In 2022/304343:
1. Grant leave to appeal.
2. Dispense with the requirement to file and serve a notice of appeal.
3. Appeal allowed.
4. Set aside the orders made on 20 May 2022, and in lieu thereof, dismiss the Amended Summons filed on 15 April 2022 with costs.
5. No order as to the costs of the appeal, with the intent that the parties bear their own costs of the proceedings in the Court of Appeal.

Catchwords:
CORPORATIONS - managed investment scheme - thoroughbred horse investment schemes - whether schemes were managed investment schemes for purposes of s 9 of Corporations Act 2001 (Cth) - whether contravention of s 601ED by operating unregistered scheme - whether exemptions under s 1012E established - where primary judge made qualified factual findings as to extent of appellant's involvement, limited to sale of interests in horses for purpose of racing competitively - where no notice of contention - scheme as found by primary judge not a managed investment scheme - other challenges dismissed

Legislation Cited:
ASIC Corporations (Horse Schemes) Instrument 2016/790
Corporations Act 2001 (Cth) ss 9, 601EB, 601ED, 601FC, 601MD, 601QA, 1012E
Financial Services Reform Act 2001 (Cth)
Supreme Court Act 1970 (NSW) s 101

Cases Cited:
Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485; [1993] HCA 15
Australian Softwood Forests Pty Ltd v A-G (NSW) (Ex rel Corporate Affairs Commission) (1981) 148 CLR 121; [1981] HCA 49
Brookfield Multiplex Ltd v International Litigation Funding Partners Pte Ltd (2009) 180 FCR 11; [2009] FCAFC 147
Chief Commissioner of State Revenue v Hayson Group of Companies Pty Ltd (2006) 68 NSWLR 254; [2006] NSWCA 233
Dennis v Dennis (1971) 124 CLR 317; [1971] HCA 50
French v Styring (1857) 2 CB (NS) 357; 140 ER 455
LCM Funding Pty Ltd v Stanwell Corporation Ltd (2022) 292 FCR 169; [2022] FCAFC 103
Liberty Mutual Insurance Company Australian Branch (t/as Liberty Specialty Markets) v Icon Co (NSW) Pty Ltd [2021] FCAFC 126; 396 ALR 193
Mier v FN Management Pty Ltd [2006] 1 Qd R 339; [2005] QCA 408
Stewart v Spicer Thoroughbreds Pty Ltd [2022] NSWSC 558
SZGME v Minister for Immigration and Citizenship (2008) 168 FCR 487 [2008] FCAFC 91

Category: Principal judgment
Parties: Spicer Thoroughbreds Pty Ltd (First Appellant/First Applicant)
Brad John Spicer (Second Appellant/Second Applicant)
John Stewart (Respondent)
Representation:
Counsel:
M A Izzo SC, D Levi (Appellants/Applicants)
Dr C S Ward SC,…

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.

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Details

Case: [2023] NSWCA 82
Decision Date: 02 May 2023

CaseChat Overview and Summary

Spicer Thoroughbreds Pty Ltd appealed to the Court of Appeal of New South Wales against orders made by the primary judge concerning thoroughbred horse investment schemes. The dispute centred on whether these schemes constituted managed investment schemes for the purposes of section 9 of the *Corporations Act 2001* (Cth), and consequently, whether Spicer Thoroughbreds had contravened section 601ED by operating an unregistered scheme. The primary judge had made qualified factual findings regarding Spicer Thoroughbreds' involvement, limiting it to the sale of interests in horses for the purpose of competitive racing.

The Court of Appeal was required to determine whether the schemes, as found by the primary judge, qualified as managed investment schemes under the *Corporations Act*. This involved considering whether the exemptions provided by section 1012E were established. The appellant also sought to challenge other findings made by the primary judge.

The Court of Appeal, in one of the appeals, found that the scheme, as characterised by the primary judge, was not a managed investment scheme. The other challenges raised by the appellant were dismissed. In the other appeal, the Court granted leave to appeal and dispensed with the requirement to file and serve a notice of appeal.

Consequently, in appeal number 2022/167408, the notice of appeal was dismissed as incompetent, with the parties to bear their own costs. In appeal number 2022/304343, the appeal was allowed, the previous orders were set aside, and the Amended Summons was dismissed with costs. The parties were to bear their own costs of the proceedings in the Court of Appeal.

Orders

Orders of the court

In 2022/167408:

1. Dismiss the notice of appeal as incompetent.

2. No order as to the costs of the appeal, with the intent that the parties bear their own costs of the proceedings in the Court of Appeal.

In 2022/304343:

1. Grant leave to appeal.

2. Dispense with the requirement to file and serve a notice of appeal.

3. Appeal allowed.

4. Set aside the orders made on 20 May 2022, and in lieu thereof, dismiss the Amended Summons filed on 15 April 2022 with costs.

5. No order as to the costs of the appeal, with the intent that the parties bear their own costs of the proceedings in the Court of Appeal.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Medium Neutral Citation:	Spicer Thoroughbreds Pty Ltd v Stewart [2023] NSWCA 82
Hearing dates:	11 April 2023
Date of orders:	02 May 2023
Decision date:	02 May 2023
Before:	Leeming JA at [1]; Mitchelmore JA at [92]; Griffiths AJA at [93]
Decision:	In 2022/167408: 1. Dismiss the notice of appeal as incompetent. 2. No order as to the costs of the appeal, with the intent that the parties bear their own costs of the proceedings in the Court of Appeal. In 2022/304343: 1. Grant leave to appeal. 2. Dispense with the requirement to file and serve a notice of appeal. 3. Appeal allowed. 4. Set aside the orders made on 20 May 2022, and in lieu thereof, dismiss the Amended Summons filed on 15 April 2022 with costs. 5. No order as to the costs of the appeal, with the intent that the parties bear their own costs of the proceedings in the Court of Appeal.
Catchwords:	CORPORATIONS - managed investment scheme - thoroughbred horse investment schemes - whether schemes were managed investment schemes for purposes of s 9 of Corporations Act 2001 (Cth) - whether contravention of s 601ED by operating unregistered scheme - whether exemptions under s 1012E established - where primary judge made qualified factual findings as to extent of appellant's involvement, limited to sale of interests in horses for purpose of racing competitively - where no notice of contention - scheme as found by primary judge not a managed investment scheme - other challenges dismissed
Legislation Cited:	ASIC Corporations (Horse Schemes) Instrument 2016/790 Corporations Act 2001 (Cth) ss 9, 601EB, 601ED, 601FC, 601MD, 601QA, 1012E Financial Services Reform Act 2001 (Cth) Supreme Court Act 1970 (NSW) s 101
Cases Cited:	Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485; [1993] HCA 15 Australian Softwood Forests Pty Ltd v A-G (NSW) (Ex rel Corporate Affairs Commission) (1981) 148 CLR 121; [1981] HCA 49 Brookfield Multiplex Ltd v International Litigation Funding Partners Pte Ltd (2009) 180 FCR 11; [2009] FCAFC 147 Chief Commissioner of State Revenue v Hayson Group of Companies Pty Ltd (2006) 68 NSWLR 254; [2006] NSWCA 233 Dennis v Dennis (1971) 124 CLR 317; [1971] HCA 50 French v Styring (1857) 2 CB (NS) 357; 140 ER 455 LCM Funding Pty Ltd v Stanwell Corporation Ltd (2022) 292 FCR 169; [2022] FCAFC 103 Liberty Mutual Insurance Company Australian Branch (t/as Liberty Specialty Markets) v Icon Co (NSW) Pty Ltd [2021] FCAFC 126; 396 ALR 193 Mier v FN Management Pty Ltd [2006] 1 Qd R 339; [2005] QCA 408 Stewart v Spicer Thoroughbreds Pty Ltd [2022] NSWSC 558 SZGME v Minister for Immigration and Citizenship (2008) 168 FCR 487 [2008] FCAFC 91
Category:	Principal judgment
Parties:	Spicer Thoroughbreds Pty Ltd (First Appellant/First Applicant) Brad John Spicer (Second Appellant/Second Applicant) John Stewart (Respondent)
Representation:	Counsel: M A Izzo SC, D Levi (Appellants/Applicants) Dr C S Ward SC,…