ASIC steps in to help Great Northern investors

Property investors who put money into Queensland projects by Great Northern Developments have received compliance assistance from regulator ASIC, including being able to recoup their investments. 

Based in Richmond, NSW, Great Northern raised funds from investors through loan agreements and promissory notes to finance its property development projects. 

In September 2010 the NSW Supreme Court found that Great Northern Developments had contravened the Corporations Act by failing to enter into a trust deed and by failing to appoint a compliant trustee before making offers of debentures that require disclosure. 

Great Northern financial statements for the June 30, 2009 reported total loans owing of $34.8 million, with $24.16 million described as loans from “investors”. 

At the time of the September 2010 judgement, court documents named Christopher Edwards, Lawrence Robson and Christopher Hawkins as company directors. 

Court documents describe Great Northern as being “in the business of acquiring properties in Queensland upon which it constructs apartments for sale. 

“It appears from GND’s financial statements that as at 30 June 2008 and 30 June 2009 it held land for resale at Bundaberg, Gladstone, Cairns and Gympie, and a property called ‘Degon Property’.” 

According to ASIC documents, notice to wind up the company was submitted on August 6, 2009.

 In September 2010, the court accepted an undertaking from Great Northern that it would enter into a trust deed and appoint a trustee in compliance with the act.

However, Great Northern was unable to secure a trustee, prompting ASIC to assist Great Northern to comply by ensuring that: 

  • those investors who elected to continue with their investment were transferred to the La Trobe Australian Mortgage Fund;
  • the continuing investors obtained a mortgage over Great Northern’s properties; and
  • those investors who did not wish to join the scheme were fully repaid their original investment and interest.

ASIC commissioner Peter Boxall, says its action were consistent with ASIC’s objective of achieving compliance as a first step to safeguard investor funds.

“Where appropriate, and in the best interest of investors, ASIC will take steps to ensure that fundraising schemes which might be operating outside the requirements of the law are made compliant so that investors are afforded the relevant legal protections,” he says.

The Great Northern website lists four Queensland developments in its property portfolio including a retirement village in Gympie, the SurfAir Resort on the Sunshine Coast, the Silhouette Apartments in Brisbane’s West End and the Kingsholme apartments in Methyr, in New Farm, Brisbane.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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