Shao v One Funds Management Limited

The case of Shao v One Funds Management Limited was heard in the Supreme Court of Victoria. The plaintiff, Shao, brought an action against One Funds Management Limited and others, seeking an order that a priority be given to certain units issued in a trust over other units issued in the same trust. This dispute arose out of a managed investment scheme where various classes of units were issued by the defendant, One Funds Management Limited. The plaintiff argued that the units held by them should have priority over other units issued by the defendant due to certain representations and agreements made at the time of the investment.

The central legal issues in the case concerned the interpretation of the trust deed and the nature of the priority arrangements between different classes of units issued in the trust. Specifically, the court needed to determine whether the terms of the trust deed and the representations made by the defendant created a priority arrangement that favoured the plaintiff's units over other units. The court also had to consider whether the plaintiff's units were protected by equitable principles, given the nature of the representations and the reliance placed upon them by the plaintiff.

In its decision, the court examined the terms of the trust deed and the representations made by the defendant. The court found that the trust deed did not explicitly provide for a priority arrangement between the different classes of units. However, the court considered the broader context of the representations made by the defendant and the reliance placed upon them by the plaintiff. The court held that the representations made by the defendant created an expectation in the plaintiff that their units would have priority over other units, and this expectation was reasonable and justified. Consequently, the court ordered that the plaintiff's units should have priority over other units issued in the trust. The defendant was also ordered to pay the plaintiff's costs of the proceeding.

The court's final orders included a declaration that the plaintiff's units issued in the trust should have priority over other units issued in the trust, and the defendant was ordered to pay the plaintiff's costs of the proceeding. This decision underscores the importance of clear communication and the reliance placed by investors on the representations made by fund managers in managed investment schemes.