MacarthurCook Fund Management Ltd v Zhaofeng Funds Ltd

In the Federal Court of Australia, MacarthurCook Fund Management Ltd (Appellant) appealed against a decision of Zhaofeng Funds Ltd (Respondent), which involved a dispute over the redemption of units in a managed investment scheme. The Respondent, as the responsible entity, was required to redeem the units in the scheme as per the terms of the subscription contract. The Appellant claimed that the Respondent failed to redeem the units or provide a written offer to redeem them as required under Part 5C.6 of the Corporations Act 2001 (Cth). The Appellant further argued that the subscription contract was not sufficient to comply with the statutory requirement, and that the Respondent was contractually bound to make the offer.

The legal issues before the Court were whether Part 5C.6 of the Act applied to require the Respondent to make a written offer to redeem the units, and if the subscription contract was sufficient compliance with any such requirement. The Court also had to consider whether the Respondent was contractually bound to make the offer, and whether the obligation to purchase units that were not redeemed by the Respondent in its capacity as responsible entity was transferred to the new responsible entity after a change in responsible entity.

The Court found that Part 5C.6 of the Act applied to require the Respondent to make a written offer to redeem the units. However, the Court held that the subscription contract was sufficient compliance with the statutory requirement. The Court further held that the Respondent was not contractually bound to make the offer, and that the obligation to purchase units that were not redeemed by the Respondent in its capacity as responsible entity did not become the obligation of the new responsible entity after a change in responsible entity. The Court dismissed the Appellant's claim for damages for failure to redeem or purchase units in breach of contract.

The Court's decision was that the Appellant's appeal was dismissed and the Respondent's cross-appeal was allowed. The Court ordered that the Respondent pay the Appellant's costs of the appeal and cross-appeal, to be paid on an indemnity basis.