Australian Securities and Investments Commission v Ross Investments (Aust) Pty Ltd [2007] FCA 1433

FEDERAL COURT OF AUSTRALIA

Australian Securities and Investments Commission v Ross Investments (Aust) Pty Ltd [2007] FCA 1433 CORPORATIONS – unsolicited offers to purchase debentures off-market – estimate of value in offer documents significantly below real value – meaning of "fair estimate of the value of the product" – whether adequate explanation of the basis on which estimates were made – single director of company – liability of director for aiding and abetting

Corporations Act 2001 (Cth) s 1019I(2)(c)

Gregory v Federal Commissioner of Taxation (1971) 123 CLR 547 cited Holt v Cox (1994) 15 ACSR 313 cited Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494 cited Spencer v Commonwealth (1907) 5 CLR 418 cited AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION v ROSS INVESTMENTS (AUST) PTY LTD and ROBERT DOUGLAS ROSS VID 104 of 2007 FINKELSTEIN J 18 SEPTEMBER 2007 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA

VICTORIADISTRICT REGISTRY VID 104 of 2007

BETWEEN: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION Plaintiff

AND: ROSS INVESTMENTS (AUST) PTY LTD and

ROBERT DOUGLAS ROSS Defendants

JUDGE: FINKELSTEIN J

DATE OF ORDER: 18 SEPTEMBER 2007

WHERE MADE: MELBOURNE

THE COURT DECLARES THAT: 1. By sending the: (a) 2005 Cambridge offer documents to offerees; and (b) 2007 Cambridge offer documents to offerees (collectively "the Cambridge offer documents") the first defendant contravened section 1019I(2)(c) of the Corporations Act 2001 (Cth). 2. By causing the Cambridge offer documents to be sent to the offerees, the second defendant was knowingly concerned in the contravention of section 1019I(2)(c) of the Corporations Act 2001 (Cth) by the first defendant.

AND THE COURT ORDERS THAT: 3. Within three (3) business days of the date of this order the first defendant post to each offeree: (a) who accepted the first defendant's offer contained in the offer document dated 8 November 2005 or 23 November 2006 – a written notice in the form of Attachment A; or (b) who accepted the first defendant's offer contained in the offer document dated 9 November 2005 – a written notice in the form of Attachment B; or (c) who accepted the first defendant's offer contained in the offer document dated 16 January 2007 or 29 January 2007 – a written notice in the form of Attachment C; or (d) who accepted the first defendant's offer contained in the offer document dated 22 January 2007 – a written notice in the form of Attachment D by prepaid ordinary post to the address to which the respective Cambridge offer documents had been sent. 4. Within seven (7) business days of the first defendant receiving: (a) notification from an offeree that the offeree elects to terminate any agreement to sell their Cambridge debentures to the first defendant; and (b) where the first defendant has paid the offeree for their Cambridge debentures – a refund of the purchase price paid by the first defendant in respect of those debentures the first defendant shall: (i) if it has not yet lodged the transfer form to effect the transfer of the Cambridge debentures from the offeree to it – return the transfer form to the offeree by prepaid ordinary post to the address to which the Cambridge offer document had been sent; or (ii) if it has already effected the transfer of the Cambridge debentures from the offeree to it: A) re-transfer the Cambridge debentures to that offeree; and B) pay to the offeree any distribution the first defendant has received or is entitled to receive as a result of holding the Cambridge debentures in accordance with the terms of the attachment sent to that offeree under paragraph 3 of this order. 5. Until 40 days after the first defendant sending the written notice in accordance with paragraph 3 above, the first defendant by itself, its officers or servants be restrained from: (a) lodging for registration any transfer form and or taking any action whatsoever to give effect to the transfer of Cambridge debentures from an offeree; and (b) disposing of any Cambridge debentures purchased by the first defendant from an offeree (unless such disposal is in accordance with paragraph 4(ii) above). 6. The defendants pay the plaintiff's costs of this proceeding, such costs to be taxed in default of agreement. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.