21st Century Group land banking proceedings
Frequently asked questions
Why did ASIC commence the proceeding?
ASIC commenced proceedings on 3 August 2015 in the Federal Court of Australia against companies associated with Jamie McIntyre and the 21st Century Group* in relation to the promotion and sale of interests to investors in five land banking developments.
ASIC alleged that the developments are unregistered managed investment schemes and/or financial products and that the 21st Century Group* companies and Mr McIntyre and his brother Dennis McIntyre had been unlawfully carrying on an unlicensed financial services business.
The five developments were promoted and advertised as:
- Botanica, located at 805 Archer Rd, Kialla, Victoria 3631
- Secret Valley Estate, located at 955, Old Sydney Road, Bylands, Victoria 3762
- Oak Valley Lakes Estate & Resort, located at 124 Booth Road, Brookhill, Townsville, Qld 4816.
- Bendigo Vineyard Estate & Resort, located at 51 Andrews Road, Bendigo, Victoria 3551
- Melbourne Grove Estate, located at 1491 Dohertys Road, Mount Cottrell, Victoria 3024.
What happened to the companies in ASIC's proceeding?
Following their appointment by the Court on 7 October 2015 as provisional liquidators, at a directions hearing on 10 March 2016, the Federal Court made orders that Deloitte be appointed as liquidators to the corporate defendants being:
- Archery Road Pty Ltd (ACN 162 921 735)
- Bendigo Vineyard Estate Pty Ltd (ACN 600 088 211)
- Secret Valley Estate Pty Ltd (ACN 602 817 532)
- Kingsway South Holdings Pty Ltd (ACN 159 230 976)
- Melbourne Tarniet Estate Pty Ltd (ACN 603 945 393)
- Property Tuition Pty Ltd (ACN 129 421 281)
- Education Holdings Pty Ltd (ACN 129 551 917)
- Sourcing Property Pty Ltd (ACN 602 474 779).
View a copy of the court's orders dated 10 March 2016.
What orders were made by the Court at the final hearing?
On 17 October 2016, Justice Bromwich made final orders that:
- Jamie and Dennis McIntyre be banned from managing corporations and carrying on a financial services business for a period of 10 years each;
- The corporate defendants to the proceedings had contravened the Corporations Act by carrying on a financial services business without an Australian Financial Services Licence (AFSL);
- The 5 land banking developments were unregistered managed investment schemes; and
- The unregistered managed investment schemes are to be wound up and Deloitte appointed as liquidators of the unregistered managed investment schemes.
Justice Bromwich also found that the option agreements entered into by investors were financial products pursuant to the Corporations Act.
Jamie and Dennis McIntyre agreed to the banning against them for 10 years each.
What does the judgment mean for me as an option holder?
As the Court found that the corporate defendants contravened the law by carrying on a financial services business without an AFSL, you may want to consider seeking legal advice regarding the option agreement you entered into with the 21st Century Group* companies to see what the decision means for you in terms of your agreement and any rights you might have arising out of it.
What is a managed investment scheme?
A scheme may be a managed investment scheme if:
- Investors contribute money to acquire rights to benefits produced by the scheme;
- the scheme involves pooling investor funds or those funds are used in a common enterprise to produce benefits; and
- investors do not have day-to-day control over managing their investment.
Why do managed investment schemes need to be registered?
Essentially, most managed investment schemes are required to be registered so that investors have the benefits and protections of the regime for such schemes as provided for in the Corporations Act.
In most cases, it is illegal to offer units or interests in what is actually a managed investment scheme unless the scheme is registered with ASIC. Also, if the developers and promoters are legally running a managed investment scheme, they must have an AFSL authorising them to conduct the scheme.
If the investment is a managed investment scheme you must be given a product disclosure statement (PDS). A PDS must include information about the scheme's key features, fees, commissions, benefits, risks and complaints handling procedure. A PDS helps you to be fully informed about the investment before you invest.
Will investors get a refund?
ASIC did not seek compensation or refunds for investors in the proceeding, however, there may be a return to creditors in the liquidation of the defendant companies. This will not be known until the liquidators have concluded their investigations.
If you are uncertain about financial decisions you have made as a result of your dealings with the defendants to ASIC's proceeding, you may wish to consider obtaining independent legal advice and/or financial advice.
What was the role of the provisional liquidators?
When provisional liquidators were appointed by the Court on 7 October 2015, they took control of all the assets of all defendant companies and provided a report as to the affairs of the companies.
On 5 February 2016, the Federal Court made orders that ASIC may publish the provisional liquidators report dated 15 December 2015, excluding the annexures to the report, on the ASIC website.
Why did ASIC seek to appoint provisional liquidators/liquidators over the development companies and schemes?
In addition to ASIC's concern that the development companies were unlawfully operating managed investment schemes, ASIC was further concerned that:
- investor funds have been removed from the development companies' bank accounts;
- the option fees paid by investors have been transferred to related companies within the 21 Century Group*;
- the relevant councils have stated that the underlying land which is the subject of the land banking developments will not be, or is highly unlikely to be, rezoned as residential land in the foreseeable future.
What does the appointment of liquidators mean for me as an option holder?
A liquidation is the orderly winding up of a company’s affairs. It involves realising the company’s assets, cessation or sale of its operations, distributing the proceeds of realisation among its creditors and distributing any surplus among its shareholders.
Now that liquidators are appointed, they will conduct further investigations into the affairs of each of the companies and determine whether there are any claims which may be made, or any transactions which may be recoverable for the benefit of creditors. Any likely return to creditors' will depend on the outcome of these further investigations.
ASIC's guide on the process of liquidation may also assist investors and is accessible at: Information Sheet 45 Liquidation: a guide for creditors (INFO 45).
Who can I speak to about my investment and the status of the companies in liquidation?
Investors in the land banking schemes seeking information about their options should contact the liquidators, Deloitte:
Address: 550 Bourke Street, Melbourne VIC 3000.
Telephone: +61 3 9671 7060 or +61 3 9671 7809
Can 21st Century, Jamie McIntyre and Dennis McIntyre continue to conduct seminars?
Jamie and Dennis McIntyre have been restrained from providing financial services for 10 years. This means that they cannot, for example:
- Give recommendations or statements of opinions about financial products;
- Issue financial products to you or arrange for someone to issue financial products to you;
- Hold themselves out as being able to provide financial services; or
- Provide financial services through their employees or agents.
If you believe Jamie or Dennis are providing financial services, you should contact ASIC as this may be a breach of the Court's orders.
For further information on land banking, please visit ASIC's MoneySmart website.
*Jamie McIntyre refers to his companies as the "21st Century Group". 21st Century Group Pty Ltd (ACN 108 150 545) is not a defendant to the proceeding, and ASIC is not aware of any connection between 21st Century Group Pty Ltd and the defendants.