Re Investa Listed Funds Management Ltd - [2016] NSWSC 344

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: In the matter of Investa Listed Funds Management Limited (as responsible entity of Armstrong Jones Office Fund: ARSN 090242229) [2016] NSWSC 344
Hearing dates: Friday, 18 March 2016
Date of orders: 18 March 2016
Decision date: 18 March 2016
Jurisdiction: Equity - Corporations List
Before: Brereton J
Decision:
Plaintiffs would be justified in publishing on the company announcements platform of the Australian Securities Exchange, and in distributing to all registered security holders of Armstrong Jones Office Fund and Prime Credit Property Trust, an announcement substantially in the form of annexure ARD 4 to the affidavit of Antony Robert Damian sworn on 18 March 2016, with certain amendments.

Catchwords: CORPORATIONS – whether under (NSW) Trustee Act 1925, s 63, independent board committee justified in announcing to ASX published documents and distributing copies to unitholders – whether appropriate to seek judicial advice – document containing director or trustee’s recommendations – independent expert advice
Legislation Cited: (CTH) Corporations Act 2001, s 411
(NSW) Trustee Act 1925, s 63
Cases Cited: Centro Retail Limited [2011] NSWSC 1320
Re Coates Hire Ltd [2007] FCA 2105
Trust Company Limited [2013] NSWSC 1946
Category: Consequential orders (other than Costs)
Parties: Investa Listed Funds Management Limited (as responsible entity of Armstrong Jones Office Fund: ARSN 090242229)( first plaintiff)
Investa Listed Funds Management Limited (as responsible entity of Prime Credit Property Trust ARSN 089849196) (second plaintiff)
Representation:
Counsel:
P J Brereton SC (plaintiffs)
Solicitors:
Herbert Smith Freehills (plaintiffs)

File Number(s): 2016/68063

Judgment (EX TEMPORE)

HIS HONOUR: On 8 March 2016, I made orders that the plaintiff Investa Listed Funds Management Limited, in its capacity as responsible entity of the Armstrong Jones Office Fund and of the Prime Credit Property Trust, would be justified in convening meetings of security holders in the Investa Office Fund (“IOF”), to consider a proposal in relation to securities in the fund, and in distributing to security holders an explanatory memorandum, which the Court considered in relation to the proposal. The explanatory memorandum has now been distributed to security holders.
On 15 March 2016, Investa Office Management Holdings Pty Limited (“IOM”), which owns the shares in the plaintiff company, and also owns the current manager of the IOF, published to unitholders a media release and an information memorandum, marked "Important information for IOF unitholders", headed "You have a choice", urging a "No" vote to the proposal to be submitted to the extraordinary general meeting. The document foreshadows a potential proposal.
The Independent Board Committee (“IBC”) of the plaintiff wishes to make an announcement to the ASX in relation to the documents that have been published by IOM, and to distribute a copy of that announcement to unitholders. By interlocutory process filed in Court today, it seeks a direction from the Court, pursuant to (NSW) Trustee Act 1925, s 63, that it would be justified in doing so.
The precaution of seeking judicial advice is taken because in In the matter of Centro Retail Limited [2011]…

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

Case: [2016] NSWSC 344
Decision Date: 18 March 2016

CaseChat Overview and Summary

The case of Re Investa Listed Funds Management Ltd involved Investa, which had made a recommendation to its unitholders to accept a takeover offer by a corporate entity. The Independent Board Committee of Investa was considering the recommendation and had sought judicial advice on the appropriate process for making this announcement. The dispute arose from the need to determine whether the committee's actions were compliant with the statutory requirements set out in section 63 of the Trustee Act 1925 (NSW). Specifically, the court needed to assess whether the committee was justified in announcing to the Australian Securities Exchange (ASX) the published documents and distributing them to the unitholders, and whether it was appropriate for the committee to seek judicial advice in this context.

The legal issues central to this case were whether the committee's actions in recommending the takeover and announcing it to the unitholders were consistent with the statutory framework, and if the committee was entitled to seek judicial advice on such matters. Additionally, the court had to consider whether the document containing the directors' or trustees' recommendations and the independent expert advice was appropriate for distribution to the unitholders. The interpretation of section 63 of the Trustee Act 1925 (NSW) was pivotal, as it outlines the circumstances under which trustees can seek advice and the manner in which they should communicate with beneficiaries.

The court held that the Independent Board Committee was justified in announcing the takeover recommendation to the ASX and distributing the relevant documents to the unitholders. The court also found that it was appropriate for the committee to seek judicial advice in making these decisions. The committee's actions were deemed to be within the scope of their statutory duties, and the document containing the directors' or trustees' recommendations, along with the independent expert advice, was appropriate for distribution to the unitholders. The court emphasised the importance of transparency and due process in such matters, and that the committee had acted in accordance with the legislative framework.

The final orders of the court confirmed the appropriateness of the committee's actions and the distribution of the relevant documents. The court's decision provided clarity for future actions by similar committees and reinforced the importance of adhering to statutory requirements when making significant recommendations to unitholders.

Orders