Consumer Action has developed a Kit to assist consumers and their legal representatives to prepare a defence to legal action brought by National Exchange Pty Ltd.
National Exchange Defence Kit
National Exchange Pty Ltd is a licensed securities dealer that conducts a business of sending unsolicited offers to consumers to buy their shares or securities in publicly listed companies for well below the market value of the shares or securities.
Typically, National Exchange targets its unsolicited offers at consumers who have small parcels of shares or securities in publicly listed companies, whose details National Exchange obtains from the publicly available share registry. Many of the consumers who have agreed to sell their shares or securities to National Exchange received their parcel of shares or securities as a result of a demutualisation of life insurance companies and therefore were unlikely to have known how to obtain information on the true value of the shares or securities. They are therefore unlikely to realise that they have agreed to sell their shares or securities for significantly less than they are worth.
Often consumers later become aware that the deal they have agreed to is unfair, however, if a consumer attempts to cancel the agreement or refuses to forward their shareholder reference number (which is necessary to effect the transfer of the shares to National Exchange), National Exchange institutes a civil action against them in the Magistrates’ Court of Victoria.
To date, National Exchange has initiated legal action in Victoria against hundreds of Australian consumers. National Exchange and its sole director David Tweed, are well known to lawyers, government, regulators and the media. David Tweed has also used other companies to make share purchase offers. These include Country Estate and Agency Company Pty Ltd, National Exchange Corporation Pty Ltd, Australia and New Zealand Exchange Pty Ltd, National Share Purchasing Corporation Pty Ltd, Direct Share Purchashing Corporation Pty Ltd, National Exchange Securities Pty Ltd and Australian Capital Alliance Pty Ltd.
Consumer Action’s predecessor CLCV recognised that a large number of requests for assistance were being made to our Consumer Legal Practice in relation to a National Exchange cases. The CLCV considered that a coordinated response to the defence of legal proceedings brought by National Exchange would significantly benefit consumers and their lawyers, as the demand on community legal centre lawyers working individually on specific cases would not be sustainable.
The Kit also provides advice and assistance in relation to applying to have the matter stayed on the basis that a court of another jurisdiction is the appropriate forum for resolution of the matters in dispute.
The Kit includes the following pro forma documents:
- Letter of Demand;
- Notice of Defence;
- Application for a Stay (on the basis that a court in another State is a more appropriate forum);
- Pro forma Affidavit in support of Application for a Stay; and
- Application for Summary Dismissal.
We are grateful to the Victoria Law Foundation for their generous funding of the Kit.
For more information about the National Exchange Defence Kit, please contact our advice service.