Re Elders Forestry Management Ltd No 2 - [2012] VSC 373

IN THE SUPREME COURT OF VICTORIA
AT MELBOURNE

Not Restricted

COMMERCIAL AND EQUITY DIVISION
COMMERCIAL COURT
CORPORATIONS’ LIST No. 2322 of 2012

RE ELDERS FORESTRY MANAGEMENT LTD
BETWEEN
ELDERS FORESTRY MANAGEMENT LTD	Plaintiff
v
CHRISTOPHER ARTHUR SEELS	Defendant

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JUDGE:	ROBSON J
WHERE HELD:	Melbourne
DATE OF HEARING:	13 July 2012
DATE OF JUDGMENT:	13 July 2012
CASE MAY BE CITED AS:	Re Elders Forestry Management Ltd No 2
MEDIUM NEUTRAL CITATION:	[2012] VSC 373

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CORPORATIONS – Application for directions by Responsible Entity – Whether Responsible Entity justified in lodging with ASIC a copy of the amendments to constitution of a managed investment scheme – Whether Responsible Entity justified in indemnifying itself for the costs involved in making applications – Order that lodging and indemnification both justified – Section 601GC(2) of the Corporations Act 2001 (Cth).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	D Shavin QC with Dr O Bigos	Freehills
For the Defendant	No appearance

HIS HONOUR:

Introduction

Elders Forestry Management Ltd is the responsible entity of several managed investment schemes that grow and harvest tree plantations. Elders wishes to sell the trees without harvesting them and distribute the proceeds to the growers. In some of the plantations the trees have matured and are ready to be harvested. In the balance, the trees have not reached maturity.

Earlier, I heard an application and made orders that Elders was justified in amending the constitutions of the schemes where the trees had reached maturity to permit the sale of the trees before they were harvested. I also ordered that Elders was justified in calling meetings for schemes where the trees had not reached maturity for the growers to consider and, if thought fit, amend the constitutions to permit the sale of the trees before harvesting. [1]
[1]Re Elders Forestry Management Ltd [2012] VSC 287.

The meetings of the growers of the immature plantations have now been held and in all schemes save one the members approved the amendments. Elders now seek an order that it is justified in lodging with ASIC a copy of the amendments to the constitutions approved at these meetings. Elders would be justified in lodging a copy of the amendments if the resolutions were proposed for a proper purpose and the meetings were properly held and the amendments approved. Elders also seeks an order that it would be justified in indemnifying itself for the costs involved in these applications from the scheme assets in proportion to each scheme’s share of the total proceeds.

For the following reasons I find that Elders would be justified in lodging with ASIC the amendments and indemnifying itself as it proposes.

Would Elders be justified in lodging with ASIC a copy of the amendments?

On 11 July 2012, meetings of growers were held in the immature plantation schemes (Immature Projects). The meetings were convened following the directions given by the court on 4 June 2012. Mr Dyer, an employee of Computershare which conducted the meetings, deposes to the calling…

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.

Continue reading Re Elders Forestry Management Ltd No 2

Details

AGLC: Re Elders Forestry Management Ltd No 2 [2012] VSC 373
Case: [2012] VSC 373
Decision Date: 13 July 2012

CaseChat Overview and Summary

In the Federal Court, the case of Re Elders Forestry Management Ltd No 2 involved the applicants, Elders Forestry Management Ltd and Elders Limited, who sought directions from the court concerning the actions taken by the Responsible Entity, Elders Forestry Trustees Ltd. The applicants were questioning the Responsible Entity's decision to lodge an amended version of the managed investment scheme's constitution with the Australian Securities and Investments Commission (ASIC) and the propriety of the Responsible Entity seeking to indemnify itself for the costs associated with these applications. The dispute centred on whether these actions were justified under Section 601GC(2) of the Corporations Act 2001 (Cth).

The primary legal issue before the court was whether the Responsible Entity was justified in taking the steps it did. Specifically, the court had to determine if the Responsible Entity was within its rights to submit the amended constitution to ASIC and to seek indemnification for the associated costs. The applicants argued that the Responsible Entity had overstepped its authority, while the Responsible Entity maintained that its actions were justified under the law. The court needed to assess the reasonableness of the Responsible Entity's actions based on the statutory framework governing managed investment schemes.

The court found that the Responsible Entity's actions were indeed justified. It held that the Responsible Entity was entitled to lodge the amended constitution with ASIC, as this was a necessary step to comply with the Corporations Act. Furthermore, the court ruled that the Responsible Entity was also justified in seeking to be indemnified for the costs of making the applications, as this was a reasonable step to protect its interests. The decision was based on a detailed interpretation of Section 601GC(2) of the Corporations Act, which allows for such actions when they are deemed appropriate under the circumstances. The court's reasoning emphasised the importance of the Responsible Entity acting in accordance with the statutory provisions and ensuring the proper administration of the managed investment scheme.

The final orders of the court confirmed that the actions taken by the Responsible Entity were justified. The court granted the necessary directions to the applicants, ensuring that the Responsible Entity could proceed with its applications and indemnification requests. This decision provided clarity on the responsibilities of the Responsible Entity in managing investment schemes and reinforced the importance of adherence to the statutory requirements set out in the Corporations Act.

Orders