Corporations Act 2001

CHAPTER 5C - MANAGED INVESTMENT SCHEMES  

PART 5C.8 - EFFECT OF CONTRAVENTIONS (CIVIL LIABILITY AND VOIDABLE CONTRACTS)  

SECTION 601MB   VOIDABLE CONTRACTS WHERE SUBSCRIPTION OFFERS AND INVITATIONS CONTRAVENE THIS ACT  

601MB(1)    
If:

(a)    a managed investment scheme is being operated in contravention of subsection 601ED(5) and a person (the offeror ) offers an interest in the scheme for subscription, or issues an invitation to subscribe for an interest in the scheme; or

(b)    

a person (the offeror ) fails to comply with Division 2 of Part 7.9 when offering an interest in a registered scheme for subscription or issuing an invitation to subscribe for an interest in a registered scheme;

a contract entered into by a person (other than the offeror) to subscribe for the interest as a result of the person accepting the offer, or of the acceptance of an offer made by the person in response to the invitation, is voidable at the option of that person by notice in writing to the offeror.

601MB(2)    
If the person gives a notice under subsection (1) , the obligations of the parties to the contract are suspended:

(a)    during the period of 21 days after the notice is given; and

(b)    during the period beginning when an application is made under subsection (4) in relation to the notice and ending when the application, and any appeals arising out of it, have been finally determined or otherwise disposed of.

601MB(3)    
Subject to subsection (6) , the notice takes effect to void the contract:

(a)    at the end of 21 days after the notice is given; or

(b)    if, within that 21 days, the offeror applies under subsection (4) - at the end of the period when the obligations of the parties are suspended under paragraph (2)(b) .

601MB(4)    
Within 21 days after the notice is given, the offeror may apply to the Court for an order declaring the notice to have had no effect.

601MB(5)    
The Court may extend the period within which the offeror may apply under subsection (4) , even if the notice has taken effect.

601MB(6)    
On application under subsection (4) , the Court may declare the notice to have had no effect if it is satisfied that, in all the circumstances, it is just and equitable to make the declaration.