Perpetual Custodians Ltd v IOOF Investment Management Ltd

Perpetual Custodians Ltd (the applicant) sought to set aside a scheme of arrangement approved by the members of IOOF Investment Management Ltd (IOOF). The scheme involved a transfer of IOOF members' shares to an acquirer in exchange for shares in the acquirer. The applicant contended that the scheme was invalid because it contravened provisions of the Corporations Act 2001 (Cth) relating to associates and acting in concert, specifically concerning the acquisition of control over IOOF. The matter came before the Court of Appeal of New South Wales.

The central legal issues before the Court of Appeal were whether IOOF and its members who voted in favour of the scheme were "associates" of each other for the purposes of the Corporations Act, and whether they were "acting in concert" or proposing to become associated. These questions turned on the interpretation of the relevant provisions of the Act, particularly concerning agreements or understandings that could lead to control or influence over the composition of a board or the conduct of a company's affairs. The Court also had to consider whether IOOF and its members had "together become entitled" to shares in the acquirer.

The Court of Appeal dismissed the appeals, finding that the scheme of arrangement did not contravene the relevant provisions of the Corporations Act. The Court reasoned that the statutory definition of "associate" and the concept of "acting in concert" required a more direct agreement or understanding than what was present in the scheme. The scheme was a mechanism for the transfer of shares approved by a statutory majority of members, and the relationship between IOOF and its members voting in favour did not, in the Court's view, constitute them as associates or as acting in concert for the prohibited purposes. The Court also found that the members had not "together become entitled" to shares in the acquirer in the sense contemplated by the legislation.

The appeals were dismissed, with costs awarded to the respondents.