re::humphrey bear shareholder, page-2

Hello lu888,

Yes -- we did note this article by Mark Hawthorne of The Age:

Calling Humphrey Bear, please come in

http://business.theage.com.au/business/calling-humphrey-bear-please-come-in-20090416-a8tr.html

"In November BusinessDay highlighted a serious flaw in the off-market transfer system that allows shares to be held in false names, by buying a share in a listed company in the name of a bird named Mr Bud Gerigar. ..." (end quote)


I personally spoke with Mark last week and on seeing The Age article we have immediately written to Mark as follows:


"Regarding your article "Calling Humphrey Bear, please come in" [+17 April 2009] are you suggesting or implying that off-market transfers of BCSCA units to The Julie Anne Barrow Charitable Trust are 'fake' or voidable?"


In our view, the manner in which you have written the article could leave readers with that impression.

We would welcome a public correction or clarification in this respect." (end quote)


Reading the article closely there is no such positive allegation of any impropriety by The Julie Anne Barrow Charitable Trust, but with so much of the article detailing what appear to be a number of voidable transfers (to fake entities) the unwarranted association is not welcome as readers and unitholders can imagine.

The article does however make a helpful distinction between 'real transfers' and 'fake ones' as follows:

"There are all these real transfers that have happened, and someone will have to track down the fake ones," he said [Melbourne barrister Geoffrey Slater]." (end quote)


Of course with regard to our following comments, and generally, unitholders should obtain their own professional advice.

That said: Our view on the corporate law in relation to off-market transfers is that such transactions would indeed be voidable if the entity to which the unitholder is attempting to transfer the shares is fictitious or is in someway acting in a non-arms-length type of collusion with the unitholder (a nefarious 'common and mutual goal') to willfully evade a liability as the only purpose of the transaction. Such attemps are rightly voidable. An example would be setting up a $2 company and then clumsily attempting to transfer the units to this $2 shell -- followed by attempting to sink the company to the bottom of some harbour. Litigators and regulators see through these types of scams -- and do not let them stand.

It is also our strong view that there is no such voidable transaction in relation to off-market transfers of BrisConnections (BCSCA) units to The Julie Anne Barrow Charitable Trust by way of share donations.

In the view of our charity, this also accords with Justice Robson's recent decision Re Australian Style Investments Pty Ltd [2009] VSC 128 (6 April 2009) 66 at [234]:

"As to the suggestion that ASI has engaged in some sort of improper scheme by having units transferred to it by a deed of gift, I do not accept that submission. I see nothing improper in a unit holder transferring its units as alleged. The project imposes liability on persons who are unit holders on a certain date. On the basis of the submissions before me, I find there is no impropriety per se involved in a person taking steps to ensure that he, she or it is not a unit holder on the instalment date. It appears that a great many unit holders disposed of their units in October and November of 2008. It may have been the case that they did so to evade the payment of the instalments. In any event, it is not necessary for me to make any findings about those matters." (end quote)


It was only after this judgment was handed down on 6 April 2009 that The Julie Anne Barrow Charitable Trust then entered the market to acquire BrisConnections (BCSCA) units by way of share donations.

We also note that the article under the byline of Mark Hawthorne has made no reference to The Julie Anne Barrow Charitable Trust in the similar article posted not long thereafter in the Fairfax sister paper of The Age, being the Herald Sun:

BrisCon forced into bear hunt

http://www.businessday.com.au/business/briscon-forced-into-bear-hunt-20090416-a8zz.html

We hope our comments may better inform readers. And we leave the matter for forum users and readers and the unitholders facing a potential liability on 29 April 2009 to make up their own minds.


David C. Barrow, Trustee, The Julie Anne Barrow Charitable Trust

www.barrow.org.au