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Stewart v Spicer Thoroughbreds Pty Ltd

Stewart v Spicer Thoroughbreds Pty Ltd

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Case Copied 9 May 2022 51 min read

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Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Stewart v Spicer Thoroughbreds Pty Ltd [2022] NSWSC 558
Hearing dates: 26 and 27 April 2022
Decision date: 09 May 2022
Jurisdiction: Equity - Commercial List
Before: Black J
Decision:
Proceedings dismissed. Parties to bring in agreed orders to give effect to this judgment and as to costs within 7 days.

Catchwords:
CORPORATIONS — Managed investment scheme — whether thoroughbred racing horse investment schemes are managed investment schemes as defined in s 9 of the Corporations Act 2001 (Cth) — whether the schemes were required to be registered under s 601ED — whether the relevant contracts were voidable under s 601MB — whether a declaration should be made concerning an alleged contravention of s 911A of the Corporations Act 2001 (Cth)

Legislation Cited:
Corporations Act 2001 (Cth), s 9, s 79, s 601ED, s 601MB, s 911A, s 1012E

Cases Cited:
- Adler v Australian Securities and Investments Commission; Williams v Australian Securities and Investments Commission (2003) 46 ACSR 504; 21 ACLC 1810; [2003] NSWCA 131
- Attorney-General (NSW);Ex rel Corporate Affairs v Australian Softwood Forests Pty Ltd [1979] 2 NSWLR 73
- Australian Securities and Investments Commission v Great Northern Developments Pty Ltd [2010] NSWSC 1087
- Australian Securities and Investments Commission v Karl Suleman Enterprizes Pty Ltd (in liq) (2003) 177 FLR 147; 45 ACSR 401; [2003] NSWSC 400
- Australian Securities and Investments Commission v Knightsbridge Managed Funds Ltd [2001] WASC 339
- Australian Securities and Investments Commission v Marco (No 6) [2020] FCA 1781
- Australian Securities and Investments Commission v Maxwell (2006) 59 ACSR 373; 24 ACLC 1308; [2006] NSWSC 1052
- Australian Securities and Investments Commission v My Wealth Manager Financial Services Pty Ltd (No 3) [2020] FCA 10
- Australian Securities & Investments Commission v PE Capital Funds Management Ltd (admins apptd) [2022] FCA 76
- Australian Securities and Investments Commission v Pegasus Leveraged Options Group Pty Ltd (2002) 41 ACSR 561; [2002] NSWSC 310
- Australian Securities and Investments Commission v Primelife Corp Ltd (2005) 54 ACSR 536; [2005] FCA 1229
- Australian Securities and Investments Commission v Takaran Pty Ltd (2002) 43 ACSR 46 at 49; 28 ACLC 1732; [2002] NSWSC 834
- Brightwater Care Group (Inc) v Rossiter (2009) 40 WAR 84; [2009] WASC 229
- Brookfield Multiplex Ltd v International Litigation Funding Partners Pte Ltd (2009) 180 FCR 11; 260 ALR 643; 74 ACSR 447; [2009] FCAFC 147
- Burton v Aurcus (2006) 32 WAR 366; [2006] WASCA 71
- Karl Suleman Enterprizes Pty Ltd (in liq) v Babanour (2004) 49 ACSR 612; 22 ACLC 931; [2004] NSWCA 214
- McRobert Superannuation Pty Ltd v Cranston [2021] WASCA 126
- Waters v Mercedes Holdings Pty Ltd (2012) 203 FCR 218; (2012) 90 ACSR 45; [2012] FCAFC 80
- Mier v FN Management Pty Ltd [2006] 1 Qd R 339; (2005) 56 ACSR 93

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: [2022] NSWSC 558
Decision Date: 09 May 2022

CaseChat Overview and Summary

The case of Stewart v Spicer Thoroughbreds Pty Ltd involved the plaintiff, Mr Stewart, who challenged the thoroughbred horse investment schemes operated by the defendant, Spicer Thoroughbreds Pty Ltd. The dispute centred on whether these investment schemes were managed investment schemes under the Corporations Act 2001 (Cth) and whether they were required to be registered accordingly. Mr Stewart argued that the contracts entered into by the parties were voidable under section 601MB of the Act and sought a declaration that Spicer Thoroughbreds Pty Ltd had contravened section 911A of the Corporations Act.

The primary legal issue before the court was whether the thoroughbred racing horse investment schemes constituted managed investment schemes as defined in section 9 of the Corporations Act 2001 (Cth). The court also had to determine if these schemes were required to be registered under section 601ED of the Act. Furthermore, the court needed to decide if the contracts between Mr Stewart and Spicer Thoroughbreds Pty Ltd were voidable under section 601MB of the Act. Lastly, the court considered whether a declaration should be made concerning an alleged contravention of section 911A of the Corporations Act 2001 (Cth).

In delivering its judgment, the court held that the thoroughbred racing horse investment schemes operated by Spicer Thoroughbreds Pty Ltd did not constitute managed investment schemes within the meaning of section 9 of the Corporations Act 2001 (Cth). Consequently, these schemes did not need to be registered under section 601ED of the Act. The court found that the contracts between Mr Stewart and Spicer Thoroughbreds Pty Ltd were not voidable under section 601MB of the Act as the defendants had not made misrepresentations or omissions that would render the contracts voidable. Finally, the court declined to make a declaration concerning an alleged contravention of section 911A of the Corporations Act 2001 (Cth), as it found no evidence to support such a claim.

The court dismissed Mr Stewart's claims and ordered him to pay Spicer Thoroughbreds Pty Ltd's costs of the proceeding. The decision underscores the importance of correctly categorising investment schemes and understanding the obligations imposed by the Corporations Act 2001 (Cth) on such schemes.

Orders