SOLOMON v CORPORATE AFFAIRS COMMISSION [1992] NSWCA 234

SOLOMON v CORPORATE AFFAIRS COMMISSION

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

PRIESTLEY JA, HANDLEY and CRIPPS JJ 23 September 1992, 4 December 1992

[1992] NSWCA 234

The appellants claimed that the trial judge denied them natural justice in respect of orders made on 6 April 1989 restraining the appellants from doing acts in contravention of Div 6 Pt4 of the companies Code and Pt4 of the Securities Industries Code. It is also claimed certain interlocutory orders should be set aside. First: as to the interlocutory orders it was claimed that a receiver appointed over the appellants' companies was wrongfully appointed. It was also claimed the Court erred in not authorising the receiver to release funds to enable the appellant to pay legal fees.

Held:

It was not shown that any of the judges had erred in applying the principles required to be applied in appointing a receiver under s573 of the Companies Code. The Court had not denied natural justice to the appellants in not ordering a release of funds for the payment of legal fees. Apart from anything else, the appellants' money had become intermingled and inseparable from the funds of investors, together with a shortfall of investor money. Second: it is claimed the trial judge erred in holding that the scheme in question involved an offer or invitation to the public.

Held: There was evidence to support the judge's conclusions.It was clear the information in question was not intended for the exclusive use of the reader or subscriber. No one was ever refused the opportunity to invest. The details of the scheme show that investors came to the appellants either through the purchase of the book or subscription to the newsletter and not from some other relationship with the appellants.

Companies (NSW) Code 1981: s459, s573, s574, s5(4) Securities Industries (NSW) Code 1990: d 14 Securities Industries Act 1980: s97 Corporate Affairs Commission v Transphere Pty Ltd (1988) 13 ACLR 187 Corporate Affairs Commission (SA) v Australian Central Credit Union (1985) 157 CLR 201 Australian Softwood Forests Pty Ltd v Attorney General (NSW) (1973) 130 CLR 103 Hurst v Vestcorp Ltd (1988) 12 NSWLR Priestley JA I agree with Cripps JA. Handley JA I agree with Cripps JA.