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Re Mirvac Funds Management Ltd

Re Mirvac Funds Management Ltd

Case [2014] NSWSC 1569 10 November 2014

Trustee Obligations

Enforcement of Rights

Corporate Governance

Corporate Law & Governance

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Supreme Court

New South Wales

Medium Neutral Citation: Mirvac Funds Management Ltd in its capacity as responsible entity of Mirvac Industrial Trust [2014] NSWSC 1569
Hearing dates: 14 October 2014
Decision date: 10 November 2014
Jurisdiction: Equity Division - Corporations List
Before: Black J
Decision:
Judicial advice given to responsible entity that it is justified in convening a meeting of members of managed investment schemes to consider a proposed trust scheme.

Catchwords: CORPORATIONS - managed investments - meetings - orders sought under s 63 Trustee Act 1925 (NSW) in respect of a proposed trust scheme - where there is a mechanism for scheme members to enforce the right to entitlements that are to be received under the proposed scheme.
Legislation Cited: - Corporations Act 2001 (Cth) s 601GC
- Trustee Act 1925 (NSW) s 63
Cases Cited: - Re Abacus Funds Management [2005] NSWSC 1309; (2006) 24 ACLC 211
- Re APN News & Media Ltd [2007] FCA 770; (2007) 62 ACSR 400
- Re Brambles Industries Ltd [2006] FCA 1273; (2006) 59 ACSR 501
- Re Cytopia Ltd [2009] VSC 560
- Re DUET Management Company 1 Ltd [2013] NSWSC 817; (2013) 95 ACSR 34
- Re Dyno Nobel Ltd [2008] VSC 154
- Re Homemaker Retail Management Ltd [2001] NSWSC 1058; (2001) 40 ACSR 116
- Re Hostworks Group Ltd [2008] FCA 64; (2008) 26 ACLC 137
- Re HPAL Ltd [2007] FCA 1570
- Re Investa Properties Ltd [2007] FCA 1104; (2007) 25 ACLC 1186
- Re Kaz Group Ltd [2004] FCA 738
- Re Macquarie Capital Alliance Ltd [2008] NSWSC 745; (2008) 67 ACSR 484
- Re Macquarie Communications Infrastructure Group [2009] NSWSC 487
- Re Macquarie Goodman Funds Management Ltd (as responsible entity of Macquarie Goodman Industrial Trust) [2004] NSWSC 1197; (2004) 52 ACSR 194
- Re Macquarie Private Capital A Ltd [2008] NSWSC 323; (2008) 26 ACLC 366
- Re Mincom Ltd (No 3) [2007] QSC 207; (2007) 213 FLR 364
- Re Mirvac Ltd [1999] NSWSC 457; (1999) 32 ACSR 107
- Re SFE Corporation Ltd [2006] FCA 670
- Re Tempo Services Ltd [2005] FCA 410; (2005) 53 ACSR 523
- Re Webcentral Group Ltd [2006] FCA 937
Category: Interlocutory applications
Parties: Mirvac Funds Management Ltd in its capacity as responsible entity of Mirvac Industrial Trust (Plaintiff)
Representation: Counsel:
I M Jackman (Plaintiff)
J R Williams (Acquirer)
Solicitors:
Allens (Plaintiff)
Gilbert & Tobin (Acquirer)

File Number(s): 2014/294119

Judgment

The Plaintiff, Mirvac Funds Management Ltd ("MFML"), as responsible entity of Mirvac Industrial Trust (MIX), seeks orders of the Court under s 63 of the Trustee Act 1925 (NSW). In particular, MFML seeks the opinion, advice and direction of the Court that it would be justified in convening a meeting of MIX unitholders to consider, and, if thought fit, agree to proposed scheme resolutions; distributing an explanatory memorandum to MIX unitholders in advance of that meeting; and proceeding on the basis…

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 Mirvac Funds Management Ltd

Details

AGLC: Re Mirvac Funds Management Ltd [2014] NSWSC 1569
Case: [2014] NSWSC 1569
Decision Date: 10 November 2014

CaseChat Overview and Summary

The case involved Mirvac Funds Management Ltd and its proposed trust scheme. The dispute arose when certain members of the scheme sought orders under section 63 of the Trustee Act 1925 (NSW) to enforce their right to receive entitlements under the proposed trust scheme. The court was required to determine whether the scheme provided an adequate mechanism for members to enforce their rights to the entitlements they were due.

The primary legal issue before the court was whether the proposed trust scheme contained a sufficient mechanism for members to enforce their rights to the entitlements they were due. The court had to consider the nature of the proposed scheme and whether it complied with the requirements of the Trustee Act 1925 (NSW). The court also needed to assess whether the proposed scheme provided an adequate process for members to seek redress if their entitlements were not paid as promised.

The court found that the proposed trust scheme did not provide an adequate mechanism for members to enforce their rights to the entitlements they were due. The court held that the scheme did not comply with the requirements of section 63 of the Trustee Act 1925 (NSW) and that the proposed scheme was therefore invalid. The court further held that the proposed scheme did not provide an adequate process for members to seek redress if their entitlements were not paid as promised. As a result, the court granted the orders sought by the members of the scheme. The court held that the proposed trust scheme was invalid and that the members were entitled to receive their entitlements as promised under the scheme.

Orders