No money down Pilbara property scheme retrained by ASIC

The Federal Court of Australia has permanently restrained the marketing and promotion of a proposed Pilbara property investment by Macro Realty Developments Pty Ltd (Macro) and made declarations that Macro, Property Tuition Pty Ltd (21st Century Property) and Education Holdings Pty Ltd (21st Century Education) breached various provisions of the Corporations Act by promoting and marketing the investment proposal.

The investment proposal was promoted in 21st Century publications using the tagline 'Do you know how to buy Australian property, no money down?'.

The proposed investment involved investors:

• becoming a director and shareholder of a company;
• acquiring properties from Macro through this company; and
• receiving a director's fee but having agreed that Macro would be the sole decision maker for the company. 

ASIC commenced proceedings in September 2015 against Macro, 21stCentury Property and 21st Century Education in relation to the proposed investment and had obtained interim injunctions stopping the proposal from continuing to be marketed.

His Honour Justice Beach made declarations that the marketing and promotion of the investment proposal by the companies was misleading and deceptive, and that investors had been procured into breaching director's duties.  The features of the proposal found to have been misleading or deceptive included:

• that the investment proposal was essentially risk free
• that it required no money down or capital, and;
• that there were no fees involved.

In relation to 21st Century Property and 21st Century Education, His Honour also declared that financial product advice had been provided in circumstances where neither entity was licensed to provide advice.

ASIC Commissioner Greg Tanzer said it was another significant outcome in ASIC's ongoing campaign to promote trust and confidence amongst investors.

"We will continue to deter this type of misleading and deceptive conduct."

Macro Realty is owned and run by Veronica Macpherson, "Pilbara's largest private developer" according to its website.

Macro Realty has six projects in Port Hedland, South Hedland and Newman in the Pilbara.

In an emailed response to Fairfax Media, Mr McIntyre called the latest ASIC allegations "baseless" and blamed Macro Realty for not ensuring its advertising was compliant.

"21st Century Media does paid for advertising campaigns for advertisers. In this case Macro [Realty] was offering no money down property which is perfectly legal to do so. As a media company we are not responsible for advertisers ensuring their marketing or offer is compliant," he said.

ASIC has also issued proceedings in the Federal Court of Australia against 21st Century Property and 21st Century Education in relation to their promotion and sale of interests to investors in five land banking schemes in Victoria.