In the matter of Aurora Funds Management Limited

Aurora Funds Management Limited, acting as the responsible entity of a managed investment scheme, faced a challenge from members seeking to replace the entity. The dispute was brought before the Federal Court of Australia. The central issue for the court was to determine the validity of a meeting of members that was called under the Corporations Act 2001 (Cth), section 252D, where the members sought to replace the responsible entity. The responsible entity, Aurora Funds Management Limited, contested the meeting's validity on several grounds, including insufficient notice, unreasonable time and place, and misleading notices and explanatory memoranda.

The court evaluated whether the procedural requirements for convening the meeting were met, such as whether the notice provided by the members was sufficient, and whether the time and place of the meeting were reasonable. Additionally, the court considered whether the notice and the explanatory memorandum were misleading. The court also examined whether there were any substantive irregularities that would invalidate the meeting. The court's decision hinged on whether the members' actions conformed to the statutory requirements and if there were any material defects that rendered the meeting invalid. Ultimately, the court found procedural and substantive irregularities that led to the declarations of invalidity of the meeting.

The Federal Court of Australia ruled that the meeting was invalid due to the aforementioned procedural and substantive irregularities. The court's decision was grounded on the finding that the notice and explanatory memorandum were misleading, and the procedural requirements were not met. As a result, the court declared the meeting invalid, preventing the members from replacing the responsible entity of the scheme. This decision underscores the importance of strict adherence to statutory requirements when convening meetings of members in managed investment schemes.