Australian Securities & Investments Commission v Primelife Corporation Ltd

"(b) it was promoted by a person, or an associate of a person, who was, when the scheme was promoted, in the business of promoting managed investment schemes …."

If a person operates a managed investment scheme in contravention of s 601ED(5), ASIC, amongst others, may apply to have the scheme wound up by the Court: s 601EE(1).

3 So far as presently material, the expression "managed investment scheme" is defined in s 9 as "A scheme that has the following features: (i) people contribute money or money's worth as consideration to acquire rights (interests) to benefits produced by the scheme (whether the rights are actual, prospective or contingent and whether they are enforceable or not); (ii) any of the contributions are to be pooled, or used in a common enterprise, to produce financial benefits, or benefits consisting of rights or interests in property, for the people (the members) who hold interests in the scheme (whether as contributors to the scheme or as people who have acquired interests from holders); (iii) the members do not have day‑to‑day control over the operation of the scheme (whether or not they have the right to be consulted or to give directions) …." 4 There are no pleadings in the proceeding. ASIC and the defendants have filed Statements of Facts and Contentions. For the purpose of dealing with the motion, the defendants accepted that ASIC's Statement is to be treated as a pleading, and that the facts it asserts are to be taken to be established. 5 The Statement begins by saying that the proceeding concerns the "Facility", namely the residential serviced apartment facility for the aged known as Goodwin Close Retirement Village (formerly known as St James Court) constructed at 26 Barrina Street, Blackburn. Under the heading "Agreements and arrangements concerning the Facility" it is said:

(b) on 30 June 1998 the third defendant, St James Developments Pty Ltd (St James), sold the property situated at 26 Barrina Street, Blackburn (the Property) to the sixth defendant, PCM Nominees Pty Ltd (PCM);

(c) on 30 June 1998 PCM, St James and the second defendant, Prime Life Management Services Pty Ltd (PLMS), entered into a Management Agreement (MMA);

(d) on 20 December 2002 PCM, St James and PLMS entered into a deed which varied the MMA;

(e) as varied, the MMA provided that PLMS would provide marketing and management services to PCM in respect of the Facility, including advice and assistance with the initial setting up of the Facility's business, marketing the Facility, supervising and co‑ordinating management of the Facility's business, carrying out PCM's obligations contained in loan/licence agreements with the Facility's residents, and recruiting and employing staff;

(f) other provisions of the MMA as varied were that:

· PCM would not interfere with PLMS in respect of the marketing and day‑to‑day management of the Facility's business and other services to be provided by PLMS under the MMA, and

· subject to the MMA, PLMS had exclusive authority to negotiate with prospective residents on behalf of PCM regarding their entry into loan/licence agreements;

(g) on 30 June 1998 PCM and St James entered into a Profit Sharing Agreement by which PCM agreed to pay St James fifty per cent of the profits of the Facility's business during the term of the MMA.

6 The Statement then deals with "Agreements and arrangements with investors". Under the sub‑heading "Aged Care Facility Partnership Agreement" (ACFPA) it says:

(a) the ACFPA established the Aged Care Facility Partnership (the Partnership);

(b) the ACFPA contains the following, amongst other, provisions:

· the investor partners (the Partners) have entered into the Partnership for the purpose of undertaking the Partnership business: cl 3

· the Partnership business includes the acquisition, development and management of aged care facilities: cl 1.1

· the Partnership is divided into Partnership Entitlements ($1000 per unit) and the Partners hold the net assets of the Partnership in proportion to their holding of Partnership Entitlements: cl 2.1, 5.1 and 5.2

· the Partnership and the Partnership business commenced on 15 April 1998: cl 3.2

· PCM is appointed Manager to manage and supervise the Partnership business on behalf of the Partners: cl 11 and 13

· PCM holds the Partnership property as bare trustee for the Partnership and the Partners: cl 12.2

• the day‑to‑day management, administrative, accounting and representative functions of the Partners: cl 13.2(a)

• entering into contracts as nominee for the Partners: cl 13.2(f)

· PCM may delegate any of its management functions or other duties, but remains responsible for the conduct of a delegate: cl 14.10;

(c) on 4 May 2000 PCM was replaced as Manager by the fifth defendant, GDK Financial Solutions Pty Ltd (GDK), but remained as bare nominee for the Partnership;

(d) in approximately February 2001 GDK resigned as Manager and was replaced by the fourth defendant, Aged Care Partnership Management Pty Ltd (ACPM), PCM remaining as bare nominee.

7 Under the sub‑heading "Investors" the Statement identifies the Partners and the capital contributed by each of them. 8 The Statement then turns to "Promotion". Under the sub‑heading "Promotion of the Property and Facility" it states:

(a) the sale of the Property and the Facility was promoted by the first defendant, Primelife Corporation Ltd (PLC) through the Property Report dated 27 May 1998 prepared by PLC;

(b) the Property Report specifically encourages potential purchasers to form syndicates or partnerships: Executive Summary cl 1.3, and notes that

· the Property carries a town planning permit which provides for the development and use of the Property as a serviced apartments facility: par 6.4

· PLC will market the apartments and operate the Facility until the Completion Date, after which it will manage the Facility's business on behalf of the purchaser: par 1.2

· the asset offered for sale is the Property on which PLC will construct a residential serviced apartment facility for the aged: par 1.1

· the investment offers potential for high yields and capital appreciation resulting from the growth of the Facility's business: par 2.1

· estimated return on funds employed at the Completion Date was about 29 per cent including certain taxation benefits: par 1.2.

9 Under the sub‑heading "Promotion of the Scheme", the Statement claims that the Scheme was promoted by GDK, PLC and David McLeod, a director and secretary of GDK. (Mr McLeod is not a party to the proceeding, but ASIC proposes to join him.) Then follow detailed particulars of promotion by GDK/McLeod and by PLC. I will not attempt to summarise them. 10 The remainder of the Statement deals with ASIC's contentions, the only part of which it is necessary to record at this stage is ASIC's description of "the Scheme" as: "a program or plan of action pursuant to which: (1) GDK and further or alternatively, David McLeod engaged in, inter alia, the activities referred to in paragraph 55 above. (2) PLC engaged in, inter alia, the activities referred to in paragraph 56 above. (3) Investors contributed money as consideration to acquire rights (partnership entitlements in the Scheme) to benefits produced by the Scheme (income to be derived from the Scheme's interest (through PCM) in the Property, further or alternatively from the operation of the Facility)."

The activities referred to in paragraph 55 are the alleged promotional activities of GDK/McLeod. Those in paragraph 56 are the alleged promotional activities of PLC.

11 A defendant carries a heavy burden on an application under Order 20 rule 2. The burden has been described in various ways: the applicant must demonstrate that there is no issue deserving of hearing; that it is plain the claims are unarguable; or that the case is hopeless with no chance of success. See for example Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91 where Dixon J said that once it appears that there is a real question to be determined, whether of fact or law, it is not competent for the court to dismiss the action. The defendants accept this burden, submitting that ASIC's case "must fail". 12 The defendants did not pursue the contention made in their written outline of submissions that ASIC's affidavits did not establish the necessary material facts and that the proceeding was accordingly an abuse of process. As indicated at [4], they accepted that the factual assertions in ASIC's Statement are to be taken as established for the purpose of the present applications. 13 The defendants' first submission was that when the Partners formed the Partnership, formulated any plan or program and made their investment, the "managed investment scheme" contained in Chapter 5C of the Act was not part of Australian law. Chapter 5C, of which ss 601EA to 601EE form Part 5C.1, was inserted into the former Corporations Law by the Managed Investments Act 1998 (Cth), which came into operation on 1 July 1998. The managed investment scheme provisions replaced the earlier "prescribed interest" provisions of the Corporations Law. The defendants contended that "promotion" in s 601ED(1)(b) is promotion on or after 1 July 1998, so that promotion before then is irrelevant in determining whether registration under s 601EB is required. It was said that the Facility could not be part of a scheme that was "promoted", because all critical events preceded 1 July 1998. Those events were:

· in April 1998 ten partners agreed to enter into the Partnership and on 6 April incorporated PCM as nominee of the Partnership

· on 15 April 1998 the Partnership commenced, and the Partners conducted the Partnership business including the acquisition, development and management of aged care facilities

· in April 1998 the Partnership resolved to purchase a property situated at Purcell Court, Werribee, which it did later that month

· in late May 1998 one of the partners, Mr McLeod, had discussions with PLC to ascertain whether it had any properties for sale that could be developed into an aged care facility

· as a consequence of these discussions, on 30 June 1998 PCM and St James entered into a contract of sale for the Property, the Profit Sharing Agreement and the MMA.

14 In support of their promotion submission the defendants claimed that a retroactive construction, picking up pre‑1 July 1998 activity, would capture completed schemes or earlier conduct, and must be rejected because it would result in "attaching new legal consequences to facts or events which occurred before" the commencement of s 601ED(1): Fisher v Hebburn Ltd (1960) 105 CLR 188 at 194. 15 In response ASIC contended that the prohibition in s 601ED(5) relates to the "operation" of an unregistered scheme, and s 601EE empowers the Court to wind up a scheme that is "operated" in contravention of s 601ED(5). Accordingly, ASIC submitted, what it had to show was that on or after 1 July 1998 a person had been operating the Scheme, and that at the time it was being operated it was required to be registered. 16 ASIC relied on the observations of Davies AJ in ASIC v Pegasus Leveraged Options Group Pty Ltd [2002] NSWSC 310 at [55] (Pegasus) on the meaning of "operate" in these provisions. His Honour said: "The word 'operate' is an ordinary word of the English language and, in the context, should be given its meaning in ordinary parlance. The term is not used to refer to ownership or proprietorship but rather to the acts which constitute the management of or carrying out of the activities which constitute the managed investment scheme."

This meaning of "operate" was adopted in Re Lawloan Mortgages Pty Ltd [2002] QSC 302 at [81] and ASIC v Takaran Pty Ltd (2002) 20 ACLC 1732 at [49] to [50] (Takaran).

17 ASIC said it was clear that the Scheme was relevantly operated after 1 July 1998:

· construction of the Facility was completed by about 7 April 2001

· PCM was appointed Manager of the Partnership in August 1998

· capital was contributed by the investors in each of the financial years ended 30 June 1999, 30 June 2000, 30 June 2001 and 30 June 2002

· GDK was appointed Manager of the Partnership in May 2000

· the Facility was opened on 7 April 2001, and has functioned since that time as a retirement village, providing accommodation and other services in return for payment.

The defendants did not dispute that these events constituted "operation" of the scheme. Their point was, as indicated, that it was the promotion that had to have occurred after 1 July 1998.

18 ASIC, on the other hand, submitted that s 601ED(1)(b) does not require that the promotion be shown to have taken place at any particular time. It noted that the criterion in par (b) is couched in the past tense - "was promoted by a person". Thus it is sufficient if it can be shown that at some time in the past promotion took place. 19 ASIC disputed the defendants' assertion that its construction had the effect of "attaching new legal consequences to facts or events which occurred before" the commencement of s 601ED(5). It referred to the observations of Dixon CJ in Maxwell v Murphy (1957) 96 CLR 261 at 267 that "The general rule of the common law is that a statute changing the law ought not, unless the intention appears with reasonable certainty, to be understood as applying to facts or events that have already occurred in such a way as to confer or impose or otherwise affect rights or liabilities which the law had defined by reference to the past events."

ASIC contended that the fact or event which attracts a liability to register under s 601ED is operating the Scheme in the period commencing on 1 July 1998, and that past actions (promotion prior to 1 July 1998) do not render a person liable. It was said that if there was no post‑1 July 1998 conduct constituting operation of the scheme, promotion before that date would not give rise to any liability. Accordingly it was said that there was no substance in the defendants' claim that pre‑1 July promotion was not relevant under s 601ED.

20 It is not the Court's task on an application such as this to decide between the opposing contentions. The question is whether ASIC's contentions recorded at [15], [18] and [19] are bound to fail. In my view they are not. To use Dixon J's language in Dey, there is a real question of law to be determined as to whether the correct temporal approach to the relevant provisions is that propounded by the defendants (focusing on promotion) or that by ASIC (focusing on operation). If ASIC's approach is open, there is certainly evidence that operation took place after 1 July 1998. 21 I have dealt with the promotion/operation issue assuming in the defendants' favour the correctness of their contention that all critical promotional events occurred before 1 July 1998. ASIC's Statement asserts promotional events before and after that date. 22 The defendants next contended that the matters relied on in ASIC's Statement are not capable of constituting promotion. In ASIC v Young (2003) 173 FLR 441 at [53] Muir J said of "promoted" in s 601ED(1)(b): "Whatever the full scope of the meaning of "promoted" in the subject context, it plainly extends to activities in which a person formulates a scheme such as the JVP scheme, advertises it, solicits others to participate in it and embarks upon its implementation." His Honour had earlier referred at [52] to the Shorter Oxford Dictionary meaning of promote: "to further the growth, development, progress or establishment of (anything) …." In Tracy v Mandalay Pty Ltd (1953) 88 CLR 215 at 241 the High Court quoted with approval the words of Lindley J in Emma Silver Mining Co Ltd v Lewis & Son (1879) 4 CPD 396 at 407: "As used in connection with companies the term 'promoter' involves the idea of exertion for the purpose of getting up and starting a company (of what is called 'floating' it) …." 23 The matters alleged in ASIC's Statement are in my view capable of constituting "promotion" in the sense described in the authorities. It first alleges "promotion" by PLC and then provides particulars of what it was PLC, by the Property Report, did or proposed to do. The Report was aimed at attracting a purchaser. It encouraged multiple purchasers to form a syndicate or partnership. PLC proposed to construct the Facility on the Property. It would market the apartments and operate the Facility until the Completion Date, when it would manage the Facility's business on the purchaser's behalf. The investment was said to have the potential for high yields and capital appreciation resulting from the growth of the Facility's business. It would not be inappropriate to infer from the events that happened that PLC did engage in the activities foreshadowed in the Report. As to post‑1 July 1998 matters, it would not be inappropriate to infer that since the ACFPA was not executed by the investors until 1 August 1998 at the earliest, the investors who ultimately joined the Scheme did not do so before 1 July 1998, and that promotion of the Scheme took place after 1 July. In view of the foregoing, ASIC's contention that there was relevant promotion of the Scheme both before and after 1 July 1998 is not bound to fail. 24 The next question under s 601ED(1)(b) is whether a promoter of the Scheme was in the business of promoting managed investment schemes when the Scheme was promoted. In the Property Report PLC refers to "its industry knowledge, past performance and the expertise of its personnel and consultants". Other material before the Court, referred to in ASIC's Statement, related to "Brighton Bay Plaza - Lifestyle Apartments for Retirees". The Property Report for this project is dated 7 June 1999 and contains these passages about PLC: "PLC commenced its involvement with the retirement industry in 1992 and is the only publicly listed retirement village developer and operator in Victoria. Led by executive directors with more than 30 years' experience in aged accommodation, the company has gathered the resources of an informed group of personnel and consultants - including project managers, architects, solicitors, town planners, managers and marketers - to form a substantial team with the specialised skills and expertise required to expand the company's retirement village interests. … By the end of the current financial year, PLC will own and/or operate 7 Retirement Villages plus a further 10 facilities offering higher‑level care - a total of around 1700 units - with 20 additional facilities in town planning, construction or held as greenfield land‑banks. The company expects its portfolio to grow to approximately 3650 units by the year 2002. PLC's financial performance has grown steadily since the seeding period which followed the company's entry to the retirement village market …." Then appears a table headed "PLC's Retirement Village Portfolio", listing 31 villages under its management and control, and showing the status of each - for example, fully sold, opened, construction in progress, town planning in progress, 90 per cent sold. The Facility is shown as "construction in progress". 25 The promotion period appears to have been from May 1998 or thereabouts to at least April 2001, when the Facility opened. In light of the Property Report referred to at [8] and the evidence that PLC was promoting other schemes during that period, it would not be unreasonable to infer that throughout the relevant period it did so, and accordingly that when the instant Scheme was promoted it was in the business of promoting managed investment schemes. 26 Accordingly it cannot be said that ASIC's case is bound to fail for want of satisfaction of the requirement in s 601ED(1)(b) that the Scheme was promoted by a person who, when the Scheme was promoted, was in the business of promoting managed investment schemes. 27 I turn now to the definition of "managed investment scheme". The defendants contend that none of the three features of the definition is present. First, it is said that the requirement in par (i) that "people contribute money … to acquire rights … to benefits produced by the scheme" is not satisfied. Rather, the benefits to the contributors are produced by ownership of the Facility and not from the MMA. 28 All the word "scheme" requires is that there should be some program or plan of action: Australian Softwood Forests Pty Ltd v Attorney‑General (NSW) (1981) 148 CLR 121 at 129 per Mason J. His Honour went on to say: "It is not an objection to an enterprise qualifying as an undertaking or scheme that it consists of a number of parts or elements, the participation of individual parties being limited to one of these parts or elements, their profit or remuneration being derived from the particular activities in which they engage." 29 In Takaran at [15] to [16] Barrett J said: "The essence of a 'scheme' is a coherent and defined purpose, in the form of a 'program' or 'plan of action', coupled with a series of steps or course of conduct to effectuate the purpose and pursue the programme or plan. In some cases, the scope of the scheme will readily be gathered from some constitutive document in the nature of a blueprint setting out all relevant matters. In others, there may be no writing or such as there is may tell only part of the story, leaving the remainder to be supplied by necessary implication from all the circumstances. Profit making will almost invariably be a feature or objective of the kind of scheme with which the s 9 definition of 'managed investment scheme' is concerned, given the definition's references in several places to 'benefits'. Whatever is incidental and necessary to the pursuit of the profit (or 'benefits') will therefore be comprehended by the scheme …. It must also be emphasised that a scheme having the characteristics bringing it within the s 9 definition of 'managed investment scheme' will not necessarily possess those characteristics alone. In Royal Bank of Canada v Inland Revenue Commissioners [1972] Ch 665, Megarry J observed, in relation to the concept of 'ordinary banking business', that 'a statement of the essentials of a business does not seem to me, without more, to be exhaustive of all that is ordinary in that business'. A managed investment scheme, like a banking business, may involve elements beyond the core attributes that give it its essential character. Elements that lie beyond those attributes but contribute to the coherence and completeness which make a 'programme' or 'plan of action' must form part of that 'scheme'. Every programme or plan of action must be taken to include the logical incidents of and consequences of and sequels to its acknowledged components." 30 At [14] Barrett J endorsed the view of the Queensland Court of Appeal in ASIC v Enterprise Solutions 2000 Pty Ltd (2000) 35 ACSR 620, that attempts to read down the words of the definition of "managed investment scheme" are to be discouraged. 31 ASIC relies on Pegasus by way of analogy. There it was held that a "managed investment scheme" existed in circumstances where the contractual arrangements between the operator and the investors provided for the operator to use the funds supplied by the investors to purchase US Treasury Bonds, which generated returns for the investors. It was submitted that on the defendants' present argument, the Pegasus investors would have derived their benefits from their ownership of the bonds and not from profits produced by the scheme. 32 In view of the amplitude of the word "scheme", the warnings against reading down the definition of "managed investment scheme", Mason J's observations about parts of a scheme, and Barrett J's "incidental and necessary" remarks, ASIC's claim that the present Scheme encompasses not only the contractual arrangements by which the investors purchased the Property and constructed the Facility, but also all assets purchased with their funds (including the Facility itself) and the subsequent operation of the Facility as a going concern, is not a claim that is bound to fail. Pegasus is an apposite analogy. 33 Accordingly ASIC's claim that feature (i) in the definition of "managed investment scheme" is present raises a serious question for determination, which it cannot be said is bound to fail. 34 The defendants then contend that the Scheme does not possess the feature in par (ii) of the definition on the ground that there was no pooling of contributions to produce financial benefits or interests in property as part of the Scheme. It was said that the only pooling occurred as part of the Partnership's purchase of the Property, and that was an acquisition from "a financial or business undertaking or scheme" and did not entail the required acquisition of an interest in "a financial or business undertaking or scheme". Any financial benefit is said to derive from PCM's ownership and exploitation of the Facility and not from any scheme. In other words, the necessary connection between the pooling of contributions and a benefit is absent. 35 The defendants then describe the effect of the contracts relating to the operation of the Facility. First, the Profit Sharing Agreement provides that the vendor of the Property receives a profit share in consideration for selling the Property and procuring PLC to enter into the MMA. Thus "there is no financial benefit or interest in property produced by 'contributions [which] are to be pooled' because there is no pooling or common enterprise which results from the profit sharing agreement and no rights to benefits are thereby acquired". 36 The defendants then say that the MMA provides that PLC will provide marketing and management services in respect of PCM's business in consideration of a commission. They again claim that there is no financial benefit or interest in property produced by "contributions [which] are to be pooled" as "there is no pooling or common enterprise which results from the MMA and no rights to benefits are thereby acquired". 37 What I have said about the defendants' par (i) submission is applicable here. As with that submission, the defendants do not accept that the purchase of the Property and the operation of the Facility are part of the Scheme. As the rendering of the argument at [34]‑[36] shows, the defendants concentrate exclusively on the contracts relating to the operation of the Facility - the Profit Sharing Agreement and the MMA. 38 ASIC's contention that the purchase of the Property and the operation of the Facility are parts of the Scheme is not bound to fail. If that is correct, the investors' contributions were to be pooled to produce financial benefits or interests in property. On the same basis, the investors' contributions were to be used in a common enterprise to produce financial benefits or interests in property, the common enterprise being the construction and operation of the Facility, a necessary prerequisite to the implementation of the MMA and the profit sharing agreement. 39 The defendants finally contend that the feature in par (iii) of the definition is not present. It is said there is no evidence that the Partners do not have day‑to‑day control over the operation of the Scheme. They rely on the affidavit of Kevin Munro sworn 28 January 2005. Mr Munro is a Partner and the sole director of PCM and ACPM. The defendants' summary of the relevant parts of the affidavit is that it discloses that the Partners met and still meet on an ongoing basis and communicated regularly by email and telephone in relation to the affairs of the Partnership, including all investment decisions. 40 In connection with this submission the defendants describe the Scheme as "the program or plan of action pursuant to which the investment in the Facility was made and implemented". Conformably with that, they say that the partnership investment decision was to buy and develop property as an aged care facility, and that was done by the partners "quite independently". They conclude by saying that the fact that the Partners used agents to carry out their decision does not entail loss of day‑to‑day control over the operation of the Scheme "unless the 'Scheme' is confined to the day‑to‑day operation of the Facility". 41 The submission thus begins by identifying the scheme as the defendants have consistently seen it - the plan of action pursuant to which the investment in the Facility was made and implemented. Later they refer to a scheme (not espoused by them) that is confined to the day‑to‑day operation of the Facility. The Scheme propounded by ASIC consists of all the elements of those two schemes. As I have said, that Scheme is not bound to be rejected. 42 The provisions of the MMA summarised in ASIC's Statement (as to which see [5]) form the base for its contention that the Partners do not have day‑to‑day control over the operation of the Scheme on which ASIC relies. They do not control the decisions about how the Facility (the enterprise from which the income or return is to be generated) is operated. PLMS supervises and co‑ordinates management of the Facility's business, carries out PCM's obligations under loan/licence agreements with the Facility's residents, and employs staff: cl 2.1. Clause 2.2 then provides: "[PCM] must not during the Term interfere with [PLMS] in the implementation of the practices and policies of [PLMS] in respect of the marketing and day to day management of the Apartments and other services to be provided by [PLMS] under this Agreement, provided that such practices and policies are substantially consistent with the practices and policies which are being implemented at other retirement villages or aged accommodation centres currently managed or operated by [PLMS] or Associates of [PLMS]. Consistent with this all persons to be employed by [PCM] in connection with the Business must be prior approved of by [PLMS]." (emphasis added).

Clause 11 provides that a committee of persons comprising PCM and representatives of PLMS will meet at least quarterly, at which meetings PLMS will "provide full and complete information generally concerning the management of the Business".

43 The MMA as a whole, and in particular clauses 2.2 and 11, provide ASIC with a respectable argument that the Partners do not have day‑to‑day control over the operation of the Scheme as identified by ASIC. The relationship between the terms of the MMA and Mr Munro's evidence, if there is really any conflict between them, is a matter for trial. Mr Munro's evidence was relied on by the defendants to support a day‑to‑day control submission in relation to a "scheme" described as "the program or plan of action pursuant to which the investment in the Facility was made and implemented". That is not the Scheme posited by ASIC. As I have said, that Scheme is not bound to be rejected.

CONCLUSION 44 ASIC put its case in several alternative forms. I have addressed its primary one. In view of my conclusion that that case is viable, I need not deal with alternative or fall back positions. The defendants have failed to establish that ASIC's case must fail or that there is no real question to be determined. The motion must be dismissed. I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sundberg.

Counsel for the Plaintiff: PB Murdoch QC and S Senathirajah

Solicitor for the Plaintiff: Australian Securities and Investments Commission

Counsel for the Fourth and Sixth Defendants: AC Archibald QC and MR Scott

Solicitors for the Fourth and Sixth Defendants: Clayton Utz

Date of Hearing: 18 August 2005

Date of Judgment: 2 September 2005