Saker, in the matter of Great Southern Managers Australia Ltd (Receivers and Managers Appointed) (in liquidation) (No 3)

In the matter of Great Southern Managers Australia Ltd (Receivers and Managers Appointed) (in liquidation) (No 3), the central dispute involved the entitlement of Great Southern Managers Australia Ltd (GSMA) to management fees and the potential set-off for mismanagement against those fees. The case was heard in the Federal Court of Australia. The plaintiffs, who were investors in the managed investment schemes, contended that GSMA was not entitled to retain management fees due to mismanagement and sought that any such fees be set-off against claims for damages. Conversely, GSMA argued that the management fees were owed to them and should not be subject to set-off for mismanagement.

The court was tasked with deciding whether GSMA was entitled to the management fees in question and whether there was a valid set-off for mismanagement. The central legal issue revolved around the interpretation of the Corporations Act 2001 (Cth) and the specific provisions concerning seamless takeovers and the ongoing rights and obligations of responsible entities in managed investment schemes. The court examined the seamless takeover provisions, particularly sections 601FS and 601FT, to determine whether the fees in question were still owed to GSMA or if they should pass to the new responsible entity.

The court concluded that the fees in question had already accrued and were therefore not subject to the seamless takeover provisions. It rejected the argument that these fees constituted ongoing rights or obligations that would transfer to the new responsible entity. Additionally, the court declined to address the question of whether there could be a set-off for mismanagement, as the plaintiffs had not provided sufficient evidence or argument to support their claim. The court held that it was inappropriate to decide the issue without proper pleadings, evidence, and argument from the plaintiffs. The court also noted that the matter could be resolved by the parties themselves, based on their respective positions and arguments. Finally, the court ordered that the plaintiffs' costs be paid as part of the liquidation.