Wednesday 21 June 2006 – LAWFUEL – Press Release Service – The Federal Court of Australia made final orders on Monday 19 June completing the winding up of an unregistered managed investment scheme (the scheme) relating to the Camberwell Green Retirement Village and Primelife Corporation Limited (Primelife), following proceedings brought by the Australian Securities and Investments Commission (ASIC). After considering the views of all investors and a report from Mr Andrew McLellan, an independent accountant appointed to investigate and report into the past affairs of the scheme, Mr Justice Goldberg of the Federal Court approved one of two proposals that had been provided to the Court by investors about how the scheme should be wound up.
The investors’ proposal, which His Honour accepted, involved:
• a deed of settlement between Primelife and the scheme investors under which the Camberwell Green Village was returned to Primelife, and
• the net proceeds of that sale being returned to investors in the scheme. Before making the orders, the Court heard that the settlement with Primelife was the best proposal available in the circumstances.
Investors had been given almost 12 months to develop alternative proposals for winding up the scheme, rather than the usual remedy of appointing a liquidator. Another proposal that, it was claimed, would have provided a greater return to investors was rejected by His Honour on the basis that it was neither practical nor was it within the Court’s power to make the orders necessary to give it effect. Yesterday’s final orders follow orders made by Justice Goldberg by consent on 1 June 2005, regarding these and five other ASIC proceedings (see ASIC media release 05-211).
The orders winding up the scheme, with the consent of the defendants, has ensured that:
• there is a review of the scheme’s books and records by Mr McLellan, which will identify the assets and identity of investors. Mr McLellan will provide a report of his findings to investors and the Court.
• all investors have had adequate opportunity to develop and consider proposals about how the scheme should be wound up.
‘ASIC acted to ensure that investors were able to make informed decisions and maximise their returns from the winding up of this unregistered scheme’, said Ms Jan Redfern, ASIC’s Executive Director of Enforcement.
‘Investors received a report from an independent accountant about the affairs of the scheme, had an opportunity to seek an alternative to the appointment of a liquidator to wind up the scheme, and endorsed an alternative proposal, which the court accepted’, she said.
ASIC has now finalised 10 proceedings. A further 14 have been ordered to be wound up, but are awaiting final orders as to the manner in which they are to be wound up. ASIC will continue to deal with these 14 and the remaining 15 proceedings as efficiently as possible. ASIC’s proceedings should not cause any disruption to the residents of the retirement villages and aged care facilities operated by Primelife.
Background On 23 September 2004, ASIC filed 37 proceedings in the Federal Court seeking, among other things, orders that an investigating accountant be appointed over each of the schemes to report to the Federal Court on the position of each scheme. ASIC also applied for the schemes to be wound up. ASIC alleges that the schemes are not registered, as required under the Corporations Act. ASIC brought the Federal Court proceedings against Primelife and a number of other defendants including parties who, ASIC alleges, have been involved in promoting and managing the schemes to a large number of investors since 1997. ASIC entered into terms of settlement with Primelife in the proceedings on 1 April 2005 (see ASIC media release 05-80).
While ASIC has entered into terms of settlement with Primelife, the proceedings against the other defendants are ongoing. The agreement with Primelife foreshadowed a further two proceedings being brought by ASIC and ASIC filed two further proceedings in the Federal Court seeking similar relief on 22 June 2005. For further information contact: Mark Steward Deputy Executive Director, Enforcement Telephone: 03 9280 3467 Mobile: 0412 860 940 Kate Harvey ASIC Media Unit Telephone: 03 9280 3553 Mobile: 0401 985 966List your legal jobs on the LawFuel Network