Macarthurcook Fund Management Ltd - [2010] NSWSC 1117

CITATION: Macarthurcook Fund Management Ltd [2010] NSWSC 1117

HEARING DATE(S): 28/09/10

JUDGMENT DATE :
28 September 2010

JURISDICTION: Equity Division
Corporations List

JUDGMENT OF: Barrett J

EX TEMPORE JUDGMENT DATE: 28 September 2010

DECISION: Judicial advice given.

CATCHWORDS: CORPORATIONS - registered managed investment scheme - alteration of constitution by special resolution - form of resolution in notice of meeting refers to amending deed in form produced to meeting and initialled by chairman for identification - form of such deed accompanying notice contains blanks for dates - these dates completed in form initialled by chairman which also reflects change of name of an entity - lack of correspondence accordingly between the two documents - whether procedural irregularity for the purposes of s 1322(2)

LEGISLATION CITED: Corporations Act 2001 (Cth), ss 601GC, 1322(2)

CATEGORY: Principal judgment

CASES CITED: Re Mirvac Ltd [1999] NSWSC 457; (1999) 32 ACSR 107
Re Moorgate Holdings Ltd [1980] 1 All ER 40

PARTIES: Macarthurcook Fund Management Limited

FILE NUMBER(S): SC 2010/280092

COUNSEL: Mr M R Speakman SC/Mr I J Stanley - Plaintiff

SOLICITORS: Blake Dawson - Plaintiff

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

BARRETT J

TUESDAY 28 SEPTEMBER 2010

2010/280092 MACARTHURCOOK FUND MANAGEMENT LIMITED

JUDGMENT

1 I am dealing with a renewed application for judicial advice by the responsible entity of a unit trust scheme which is registered as a managed investment scheme under the Corporations Act 2001 (Cth).

2 This follows earlier judicial advice to the effect that the responsible entity would be justified in progressing to the point of a meeting of members of the scheme a proposal involving the alteration of the scheme’s constitution to create a mechanism for compulsory transfer of the scheme units.

3 The approach to the court is thus of the twofold sequential kind that has become commonplace since the decision of Austin J in Re Mirvac Ltd [1999] NSWSC 457; (1999) 32 ACSR 107.

4 Upon the renewed application advanced this morning, it has been shown that the relevant resolution for alteration of the constitution of the managed investment scheme, being a special resolution under s 601GC of the Corporations Act, was passed by the required majority of votes cast at the meeting which was the subject of the earlier judicial advice.

5 There is, however, one matter that has been drawn to the court's attention and requires comment.

6 The form of resolution set out in the notice of meeting was as follows:

Constitution

Supplemental Deed Poll

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

AGLC: Macarthurcook Fund Management Ltd [2010] NSWSC 1117
Case: [2010] NSWSC 1117
Decision Date: 28 September 2010

CaseChat Overview and Summary

Macarthurcook Fund Management Ltd was before the court in relation to the alteration of the constitution of a registered managed investment scheme. The dispute centred on whether the alteration of the constitution was validly executed as a special resolution. The issue came before the Federal Court of Australia. The primary legal issue before the court was whether the procedural irregularity in the form of the resolution and accompanying documents rendered the special resolution invalid under section 1322(2) of the Corporations Act 2001 (Cth). Specifically, the court needed to determine if the discrepancies between the form of the resolution in the notice of meeting and the initialled form of the deed, including blanks for dates and a change in the entity's name, constituted a procedural irregularity that could invalidate the resolution.

The court found that the resolution was valid despite the procedural irregularity. It reasoned that the form of the resolution in the notice of meeting referred to an amending deed in a form produced to the meeting and initialled by the chairman for identification. The form of the deed accompanying the notice contained blanks for dates, which were completed in the form initialled by the chairman and reflected a change in the name of an entity. While there was a lack of correspondence between the two documents, the court held that this did not render the resolution invalid under section 1322(2). The court concluded that the procedural irregularity did not vitiate the special resolution as the essential information was present and the irregularity did not mislead or prejudice any party.

Consequently, the court held that the alteration of the constitution was valid and effective. The court's decision ensures that the resolution process for altering the constitution of a registered managed investment scheme can proceed despite minor procedural discrepancies, provided the essential information is communicated and understood by the parties involved. This decision provides clarity for fund managers and their shareholders in managing and altering the constitutional documents of investment schemes.

Orders