MacarthurCook Fund Management Limited v TFML Limited

The High Court of Australia heard an appeal concerning an unlisted unit trust, which was a registered managed investment scheme. The parties involved were MacarthurCook Fund Management Limited and Sandhurst Trustees Limited (appellants) and TFML Limited (respondent), the responsible entity of the scheme. The dispute arose from the respondent's alleged failure to redeem units in the trust within the stipulated timeframes as provided for in the terms of issue, leading to a claim for damages.

The central legal issues before the High Court were whether the obligation to redeem units in the trust, as stipulated in the terms of issue, was subject to the requirements of Part 5C.6 of the *Corporations Act 2001* (Cth), and whether the redemption of units constituted a "withdrawal" from the scheme within the meaning of that Part. Specifically, the court had to determine if the provisions of the trust deed and the terms of issue regarding redemption were overridden by the statutory framework governing members' rights to withdraw from registered schemes, particularly when the scheme was not liquid.

The High Court reasoned that the *Corporations Act 2001* (Cth) sets out a comprehensive regime for registered managed investment schemes, including specific provisions for members' rights to withdraw. Part 5C.6, and particularly section 601KA, dictates the circumstances and manner in which members can withdraw from a scheme, distinguishing between liquid and illiquid schemes. The court found that the terms of issue and the trust deed, which provided for redemption of units, were intended to operate within this statutory framework. Therefore, any redemption of units, regardless of how it was termed, would constitute a withdrawal for the purposes of Part 5C.6. The court concluded that the respondent's obligation to redeem units was indeed subject to the requirements of Part 5C.6, and that the trust deed's provisions for withdrawal were intended to complement, rather than circumvent, the statutory requirements.

The High Court allowed the appeal, setting aside the orders of the Court of Appeal. It ordered judgment for the appellants against the respondent in the sum of $10,809,868 plus pre-judgment interest. The respondent was ordered to pay the appellants' costs in the High Court, at first instance, and on appeal to the Court of Appeal.