Relief orders granted under Securities Act for late filing

An Australian-based fund manager failed to comply with certain requirements of the New Zealand Securities Act (Australian Registered Managed Investment Schemes) Exemption Notice 1999 for filing documents with the Registrar of Companies within prescribed time limits.

Under the exemption notice, a fund manager is able to offer securities in New Zealand without registering a prospectus here. In this case1, the fund manager was applying for a relief order to validate its offer, since, without validation, the subscriptions would become immediately repayable plus 10% interest under the Securities Act 1978.

The Securities Commission did not oppose the application, and only one of the 375 investors in the relevant securities objected to a relief order being made.

Relief orders were granted for the other 374 investors. The court went on to consider the position in respect of the objecting investor, but ultimately found that late filing was a purely technical breach of the legislation that had not resulted in the investor being "materially prejudiced". The investor may have found that the investments yielded less than had been hoped for, but that was not a prejudice that was material to, or caused by, the failure to file on time.

A relief order was granted by the court using its discretionary powers under s37AH of the Securities Act.

 

1 Re Perpetual Investments Management Limited 21 June 2006, High Court, Wellington, CIV 2005-485-1565

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