CORPORATIONS - registered managed investment scheme - responsible entity as trustee - resort to equitable jurisdiction by way of application for judicial advice - TRUSTS AND TRUSTEES - application by trustee for opinion, advice or direction of court - where proceedings on foot against trustee alleging past breaches of trust and statutory contraventions - trustee seeks judicial advice whether it would be justified in defending proceedings - proceedings concern trustee's personal position and responsibility - proceedings irrelevant to management and administration of trust estate - judicial advice refused
Australian Pipeline Limited (in its capacity as responsible entity of Australian Pipeline Trust) - Plaintiff
FILE NUMBER(S):
SC 6045/06
COUNSEL:
Mr P.M. Wood - Plaintiff
SOLICITORS:
Chang, Pistilli & Simmons - Plaintiff
IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION
BARRETT J
MONDAY, 4 DECEMBER 2006
6045/06 AUSTRALIAN PIPELINE LIMITED
JUDGMENT
1 The plaintiff, Australian Pipeline Limited (“APL”), is the trustee and responsible entity of the Australian Pipeline Trust (“the Trust”), a managed investment scheme registered as such under Chapter 5C of the Corporations Act 2001 (Cth). By virtue of s.601FC(2) of that Act, APL holds the “scheme property” of the registered managed investment scheme “on trust for scheme members”. That position is reinforced by the constitution of the Trust which, in clause 2.3, states that all the assets constituting the fund to which the constitution relates are held by APL “on behalf of the unitholders”.
2 APL is thus a “trustee” within the meaning of that expression as defined by s.5 of the Trustee Act 1925. It is in that capacity that APL has approached the court seeking its opinion, advice and direction with respect to certain questions set out in an amended statement of facts filed on 1 December 2006.
3 APL thus invokes the jurisdiction created by s.63 of the Trustee Act, the leading provisions of which are:
“(1) A trustee may apply to the Court…
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
Re Australian Pipeline Ltd [2006] NSWSC 1316
Case
[2006] NSWSC 1316
Decision Date
CaseChat Overview and Summary
In the case of Re Australian Pipeline Ltd, the dispute involved a registered managed investment scheme. The responsible entity, acting as the trustee, sought judicial advice regarding whether it would be justified in defending proceedings against it. The proceedings in question alleged past breaches of trust and statutory contraventions, with the trustee seeking guidance on whether it could defend these claims while also managing and administering the trust estate. The case was heard in the Federal Court of Australia.
The legal issues before the court centred on whether the trustee, as the responsible entity of a registered managed investment scheme, could seek judicial advice from the court to determine whether it would be justified in defending proceedings against it. Specifically, the court had to decide whether the proceedings were relevant to the management and administration of the trust estate or if they concerned the trustee's personal position and responsibility. Additionally, the court needed to assess whether seeking judicial advice would be appropriate in the circumstances presented.
The court reasoned that the trustee, as the responsible entity, had a duty to manage and administer the trust estate according to the terms of the trust deed and relevant legislation. The court found that the proceedings against the trustee concerned the trustee's personal position and responsibility rather than the management and administration of the trust estate. Given this distinction, the court concluded that the trustee could not resort to the equitable jurisdiction by way of an application for judicial advice. The court emphasised that the trustee's duty was to manage the trust estate, and seeking judicial advice on personal litigation matters would be irrelevant to this duty.
The court refused the trustee's application for judicial advice, ruling that it was not justified for the trustee to seek such advice in the context of defending personal litigation proceedings. The court's decision underscored the importance of maintaining the separation between the trustee's personal responsibilities and its duties in managing the trust estate.