Alpha Wealth Financial Services Pty Ltd v Frankland River Olive Company Ltd

The case between Alpha Wealth Financial Services Pty Ltd and Frankland River Olive Company Ltd was before the Federal Court. The central dispute revolved around the effect of an amendment to the company's Constitution on the liability of its members within the context of a managed investment scheme under the Corporations Act 2001. Specifically, the matter focused on whether a proforma agreement annexed to the company's Constitution constituted a 'special' contract, which would potentially exempt members from certain liabilities. The court was tasked with determining whether the amendment to the Constitution, which involved changes to the proforma agreement, had a retrospective effect that could impact the liability of existing members.

The primary legal issue before the court was whether the amendment to the company's Constitution, which incorporated changes to the proforma agreement, was a 'special' contract that could affect the liability of existing members. The court needed to assess the nature of the proforma agreement and whether its inclusion in the Constitution meant it had a status that could be altered by subsequent amendments. Additionally, the court had to consider the implications of such an amendment on the existing contractual obligations and liabilities of the company's members.

In its reasoning, the court held that the proforma agreement annexed to the Constitution was not a 'special' contract. The court found that the amendment to the Constitution did not have a retrospective effect on the existing liabilities of the company's members. The court emphasised that the proforma agreement did not constitute a binding contract between the company and its members but rather served as a template for future agreements. As a result, the amendment to the Constitution did not alter the pre-existing contractual obligations of the members. Consequently, the court dismissed the application, finding no merit in the argument that the amendment to the Constitution could affect the existing liabilities of the members.