Supreme Court New South Wales Medium Neutral Citation: In the matter of Irongate Funds Management Limited as responsible entity for Irongate Property Fund I and Irongate Property Fund II [2022] NSWSC 723 Hearing dates: 19 May 2022 Date of orders: 19 May 2022 Decision date: 02 June 2022 Jurisdiction: Equity - Corporations List Before: Black J Decision: Judicial advice given that responsible entity is justified in propounding resolutions to implement the proposed trust scheme and proceeding on the basis that constitutional amendments to implement the trust scheme is within the constitutional powers of alteration conferred and s 601GC of the Corporations Act 2001 (Cth). Catchwords: CORPORATIONS – Managed investments – Application for judicial advice by responsible entity under s 63 of the Trustee Act 1925 (NSW) – Whether responsible entity would be justified in propounding resolutions to implement the proposed trust schemes – Whether proposed amendments are within the constitutional powers of alteration and s 601GC of the Corporations Act. Legislation Cited: - Corporations Act 2001 (Cth) s 411, Ch 5C - Trustee Act 1925 NSW s 63 Cases Cited: - Re APN News & Media Ltd (2007) 62 ACSR 400 - Re Australian Unity Property Ltd (as responsible entity for Australian Unity Diversified Property Fund) [2021] NSWSC 1494 - Re Coles Group Ltd (2007) 25 ACLC 1380 - Re DUET Finance Ltd [2017] NSWSC 415 - Re Hostworks Group Ltd (2008) 26 ACLC 137 - Re Macquarie Capital Alliance Ltd (2008) 67 ACSR 484 - Re Macquarie Private Capital A Ltd (2008) 26 ACLC 366 - Re Magellan Asset Management Ltd (as responsible entity of Magellan Global Fund) (2020) 150 ACSR 23; [2020] NSWSC 1535 - Re Mirvac Ltd (1999) 32 ACSR 107 - Re Mirvac Funds Management Ltd in its capacity as responsible entity of Mirvac Industrial Trust [2014] NSWSC 1569 - Re Pulse Health Ltd [2017] NSWSC 651 - Re SFE Corporation Ltd (2006) 59 ACSR 82 - Re Simavita Holdings Limited [2013] FCA 1274 - Re Spark Infrastructure RE Limited [2021] NSWSC 1385 - Re Sydney Airport Holdings [2013] NSWSC 1665 - Re The Trust Company (RE Services) Ltd as responsible entity of the VitalHarvest Freehold Trust [2021] NSWSC 108 - Re Villa World Limited [2019] NSWSC 1207 Category: Principal judgment Parties: Irongate Funds Management Limited as responsible entity for Irongate Property Fund I (First Plaintiff) Irongate Funds Management Limited as responsible entity for Irongate Property Fund II (Second Plaintiff) Representation: Counsel: I M Jackman SC (Plaintiffs) M Izzo SC (Bidder) Solicitors: King & Wood Mallesons (Plaintiffs) Allens (Bidder) File Number(s): 2022/132913 Judgment 1. By Originating Process filed on 6 May 2022, Irongate Funds Management Ltd ("IAP RE") as responsible entity for Irongate Property Fund I ("IPF I") and Irongate Property Fund II ("IPF II") seeks the opinion, advice and direction of the Court under s 63 of the Trustee Act 1925 (NSW), in respect of a proposed trust scheme by which Charter Hall Wholesale Management Ltd as trustee of the Charter Hall PGGM Industrial Partnership No 2 ("CHPIP") would acquire all the units in IPF I and Charter Hall Holdings Pty Ltd would acquire all the units in IPF II. In particular, IAP RE seeks a direction that it would be justified in convening meetings of IPF I and IPF II unitholders to consider a proposed constitutional amendment to give effect to the trust scheme and circulating an explanatory statement to unitholders in the two funds prior to that meeting. Further orders will be sought at the second Court hearing. 2. By way of background, IAP RE is an unlisted Australian public company limited by shares and is the responsible entity of IPF I and IPF II, which are both registered managed investment schemes under Ch 5C of the Corporations Act 2001 (Cth). Units in IPF I and IPF II are stapled to each other, so that an IAP security comprises one IPF I unit stapled to one IPF II unit, and the stapled group is listed on the Australian Securities Exchange ("ASX") and on the stock exchange operated by JSE Limited ("JSE") in South Africa. The register of holders of IAP securities is maintained in accordance with the Corporations Act and the listing requirements of the JSE, as modified by express waivers or dispensation letters provided by JSE, and incorporates both an Australian sub-register and a South African sub-register. 3. In October 2021, November 2021 and December 2021, the 360 Capital Group ("360 Capital") submitted three proposals to acquire the Irongate entities, which the IAP Re board considered did not appropriately reflect the value of the real estate and asset management platform established and built by the Irongate entities. On 30 March 2022, IAP RE entered into a Scheme Implementation Agreement ("SIA") with Charter Hall Wholesale Management Ltd as trustee of two funds, by which the Irongate entities were to be acquired by CHPIP by a trust scheme. The proposed trust scheme involving CHPIP represents a 10.5% premium to the third and highest price offered by 360 Capital under its earlier proposal. 4. I gave the direction sought by IAP RE at the conclusion of the hearing on 19 May 2022. These are my reasons for doing so. Affidavit and other evidence 1. IAP RE relied on the affidavit dated 6 May 2022 of its solicitor, Mr Alexander Morris, which provided corporate information relating to IAP RE, IPF I and IPF II and noted that IAP RE was then preparing an explanatory statement containing information relating to the trust schemes which are the subject of the proceedings, which was subsequently tendered at the hearing. 2. By his affidavit dated 18 May 2022, Mr Zachary McHerron, who is a fund manager with the Irongate entities, provided further corporate information in respect of IAP RE. Mr McHerron outlined the matters leading to the trust scheme, to which I referred above, referred to the consideration payable to securityholders under the trust scheme and also to several conditions precedent to the trust scheme. He also outlined the resolutions which would be put to unitholders at the trust scheme meetings, including a resolution under s 611 item 7 of the Corporations Act, an amendment resolution relating to the trust constitution and a destapling resolution, with each resolution to be put in respect of both schemes. Mr McHerron also referred to the manner in which securityholders holding securities on the South African register would participate in the proposed scheme. 3. Mr McHerron also referred to a memorandum of understanding entered into between CHPIP Guarantor (as defined) and 360 Capital, which granted that entity a call option to require 360 Capital to transfer its 19.9% ownership interest in IAP securities to that entity or its nominee and contained certain exclusivity arrangements. That memorandum of understanding also includes a call and put option by which 360 Capital could acquire certain properties and assets owned by IAP Group, and that acquisition will now proceed in respect of three properties within that arrangement. I address that matter further below. 4. Mr McHerron also refers to the independent expert's report prepared by Deloitte Corporate Finance Pty Ltd, which concludes that the trust schemes are fair and reasonable and in the best interest of IAP securityholders, and provides a negative assurance opinion as to whether the disposal of properties to 360 Capital confers any net benefit on 360 Capital, so as to constitute a collateral benefit for the purposes of Takeovers Panel Guidance Note 21: Collateral Benefits. Mr McHerron also addresses the structure of the scheme booklet and the manner of despatch of scheme materials and verification of the scheme booklet, and he refers to IAP RE's intent to establish an information telephone "hotline" to respond to queries from IAP securityholders. 5. The proposed scheme booklet, which was amended in minor respects immediately prior to and during the hearing, was exhibited to Mr McHerron's affidavit and Mr Jackman took me through that booklet in the course of the hearing. 6. By her affidavit dated 12 May 2022, Ms Sally Herman, who is an independent non-executive director of IAP RE, consented to act as chair of the proposed concurrent meetings of IPF I and IFP II unitholders to consider the trust schemes, and also referred to the negotiation of a break fee in respect of the proposed transaction, in which she was involved. By his affidavit dated 13 May 2022, Mr Stephen Koseff, also an independent non-executive director of IAP RE, consented to act as chair of the concurrent scheme meetings if Ms Herman did not do so. 7. By his affidavit dated 18 May 2022, Mr Tapan Parekh, who is a partner at Deloitte Touche Tohmatsu and an authorised representative of Deloitte Corporate Finance, addressed his independent expert's report as to whether the trust schemes were fair and reasonable and in the best interests of holders of units of IPF I and IFP II, and whether the property disposals to 360 Capital constituted a collateral benefit. He confirmed that he had prepared his report having regard to ASIC regulatory guidance, that he held the opinions expressed in that report and that he had made all inquiries that he believed were desirable and appropriate for the purpose of preparing that report. 8. By her affidavit dated 16 May 2022, Ms Maria Dzopalic, who is a senior relationship manager employed by Computershare Investor Services Pty Ltd, outlined the manner in which the IAP security register was maintained, including the Australian and South African sub-registers, and the manner in which the trust meeting was proposed to proceed as an online meeting. 9. By his affidavit dated 18 May 2022, Mr Daniel Natale, who is a solicitor acting for IAP RE in relation to the transaction, referred to correspondence with the Australian Securities and Investments Commission ("ASIC"), the ASX and the JSE in respect of the transaction and to approval of the proposed scheme booklet by the directors of IAP RE. In correspondence with IAP RE's solicitors, ASIC had appropriately explored the question whether the arrangements between the CHPIP entity and 360 Capital gave a collateral benefit to 360 Capital in respect of the trust scheme, and IAP RE's solicitors had provided a detailed response in relation to that matter. I return to that question below. Mr Natale also referred to the manner in which JSE would provide a formal approval letter in relation to the scheme booklet, which it would provide only after a signed independent expert report had been submitted, which would in turn occur only after the first Court hearing in accordance with usual Australian scheme practices. There is no reason to think that JSE will not provide such approval, given the previous correspondence between IAP RE and its representatives and JSE in respect of the scheme. 10. By an affidavit dated 18 May 2022, Mr Mark Bryant, who is the group general counsel and company secretary of Charter Hall Group, provided information as to CHPIP, outlined the terms of the SIA so far as they concerned CHPIP, and referred to the verification of information concerning CHPIP in the scheme booklet and to the exclusivity provisions and break fee in the transaction. Mr Bryant also addressed the memorandum of understanding between 360 Capital and the CHPIP entity to which I referred above. 11. By a second affidavit dated 19 May 2022, Mr Natale annexed a legal opinion provided by the South African legal counsel to IAP RE dealing with the effect of implementation of the proposed scheme so far as it concerned unitholders holding units on the South African sub-register. In particular, that legal opinion addressed the position in respect of necessary approvals from the JSE, and expressed the view that, where IPF I and IPF II were Australian domiciled trusts which were governed by the laws of New South Wales, South African law did not apply to the IPF I and IPF II trust constitutions or the validity of any amendments to those trust constitutions, and IAP RE was not required to comply, inter alia, with certain requirements of South African legislation in respect of collective investment schemes, takeovers and prospectuses in respect of the proposal. IAP RE also tendered a Statement of Facts (Ex P1). Applicable principles 1. Turning now to the applicable legal principles, Mr Jackman, who appears for IAP RE, submits that it is commonplace for a responsible entity of a registered managed investment scheme to seek judicial advice pursuant to s 63 of the Trustee Act in connection with a trust scheme. He submits and I accept that, in giving such advice, the Court will proceed by analogy with its approach in respect of a company scheme under s 411(1) of the Corporations Act: Re Mirvac Ltd (1999) 32 ACSR 107 at [47]; Re Macquarie Capital Alliance Ltd (2008) 67 ACSR 484 at [19]; Re Sydney Airport Holdings [2013] NSWSC 1665 at [2], [6], [19]; Re DUET Finance Ltd [2017] NSWSC 415 at [16]; Re Magellan Asset Management Ltd (as responsible entity of Magellan Global Fund) (2020) 150 ACSR 23; [2020] NSWSC 1535 at [17]; Re Spark Infrastructure RE Limited [2021] NSWSC 1385 at [26]. Mr Jackman refers to my summary of the manner in which that jurisdiction will be exercised in Re DUET Finance Limited above at [16]: "[I]t is now common practice in a trust scheme for the responsible entity to seek judicial advice in a two-stage process by analogy with schemes of arrangement under Part 5.1 of the Corporations Act: Re Mirvac Ltd [1999] NSWSC 457; (1999) 32 ACSR 107; Re Macquarie Capital Alliance Ltd [2008] WSWSC 745; [2008] NSWSC 745; (2008) 67 ACSR 484; Re Macquarie Communications Infrastructure Group [2009] NSWSC 487; Re DUET Management Company 1 Ltd; [2013] NSWSC 817; (2013) 95 ACSR 34. A responsible entity may seek judicial advice at the first hearing that it is justified in propounding resolutions to implement the trust scheme and proceeding on the basis that the amendments to be made to the constitution of the registered managed investment scheme to implement the trust scheme would be within the powers of alteration conferred by that document and s 601GC of the Corporations Act: Re Mirvac Ltd above at [47]; Re Macquarie Capital Alliance Ltd above at [19]. That judicial advice, and the right of any unitholder in the managed investment scheme to appear at the second court hearing and object, is disclosed in the explanatory statement sent to unitholders for a meeting of unitholders to consider the resolutions to implement the trust scheme; and further judicial advice is sought at the second hearing that the responsible entity is justified in implementing the trust scheme: Re Mirvac Ltd above at [48]." 1. Mr Jackman also points out that, in considering whether to give judicial advice at the first Court hearing, the Court applies the principles that have developed with respect to schemes under s 411 of the Corporations Act by analogy, and again refers to Re DUET Finance Limited above at [14]: "It is, of course, well-established that the Court will generally approve the convening of a meeting of shareholders to consider a proposed scheme if it seems fit for consideration by a meeting of members and a commercial proposition that, if passed by the requisite majorities, is likely to be approved by the Court on an uncontested application: Re ACM Gold Ltd; Re Mt Leyshon Gold Mines Ltd [1992] FCA 89; (1992) 34 FCR 530 at 535; Re The Trust Company Ltd [2013] NSWSC 1680 at [5]. … [T]he Court's approach at the first hearing is that it "will not ordinarily summon a meeting unless the scheme is of such a nature and cast in such terms that, if it receives the statutory majority at the … meeting the court would be likely to approve it on the hearing of a petition which is unopposed": FT Eastment & Sons Pty Ltd v Metal Roof Decking Supplies Pty Ltd (1997) 3 ACLR 69 at 72; Australian Securities Commission v Marlborough Gold Mines Ltd [1993] HCA 15; (1993) 177 CLR 485 at 504. … [A]t the first hearing, the Court exercises a "supervisory jurisdiction" to review the scheme and raise any queries with the plaintiff, and the Court will intervene at the first hearing if it has any concerns, since the market will have regard to the orders made by the Court at the first hearing: Re Archean Gold NL (1997) 23 ACSR 143 at 146; Cleary v Australian Cooperative Foods Ltd [1999] NSWSC 991; (1999) 32 ACSR 701 at [46]. The Court does not substitute its commercial judgment for that of the members to whom the scheme is directed, but considers whether the scheme is one that sensible businesspeople might conclude is of benefit to members: Re Prime Infrastructure Holdings Ltd [2010] NSWSC 1104; (2010) 80 ACSR 193 at [13]; Re AXA Asia Pacific Holdings Ltd [2011] VSC 4 at [13]; Re Aspen Group Ltd [2015] NSWSC 1718 at [11]." 1. Mr Jackman refers to several matters on which he relies to submit that the proposed trust schemes are fit for consideration by meetings of IAP securityholders and reflect a commercial proposition that, if passed by the requisite majorities, is likely to be approved by the Court, and that there are no discretionary reasons why the Court would refuse to grant the judicial advice sought by IAP RE. He points out that the trust schemes have received the unanimous support of IAP RE's board in the absence of a superior proposal and subject to the independent expert continuing to conclude that the proposal is fair and reasonable to, and therefore in the best interests of, IAP securityholders; the independent expert has concluded that the schemes are fair and reasonable to, and therefore in the best interests of, IAP securityholders and his report has been verified by affidavit; and the information contained in the scheme booklet has been the subject of verification (McHerron 18.5.22 [41]–[52]; Bryant 18.5.22 [16]-[28]; Natale 18.5.22) and has been made available for ASIC's review. I accept that submission, subject to the specific issues that I address below. Mr Jackman also submits, and I accept, that the making of the proposed amendments to the IPF I and IPF II constitutions in connection with the trust schemes, as set out in annexure D of the scheme booklet, following approval by IAP securityholders, would be within IAP RE's powers as trustee and responsible entity of the trust, including the powers of alteration conferred by the trust's constitution and s 601GC of the Corporations Act. Specific issues 1. Mr Jackman rightly notes that the case law identifies several issues that warrant particular attention prior to the Court exercising the discretion conferred by s 411(1) of the Corporations Act and, by analogy, s 63 of the Trustee Act. I now turn to those issues. 2. First, Mr Jackman recognises that the Court considers the steps taken to ensure that a bidder will comply with its primary obligation to pay the scheme consideration to scheme members: Re SFE Corporation Ltd (2006) 59 ACSR 82 at [4]; Re APN News & Media Ltd (2007) 62 ACSR 400 at [23]; Re Simavita Holdings Limited [2013] FCA 1274 at [43]–[44]; Re Spark Infrastructure RE Limited above at [29]. This issue is addressed here by the terms of the proposed amendments to the IPF I and IPF II constitutions, where cl 28.2(f) of the proposed amended IPF I constitution provides that it is only subject to CHPIP and CHPIP Guarantor having complied with their obligations under a deed poll (referred to below) that the "Scheme Units" will be transferred and cl 28.2(f) of the proposed amended IPF II constitution is to comparable effect. Mr Jackman submits and I accept that the deed poll executed by CHPIP and CHPIP Guarantor ("Deed Poll") further protects scheme participants. That Deed Poll is executed in favour of each registered holder of IAP securities as at the record date and, by cl 4, obliges CHPIP and CHPIP Guarantor to observe and perform all obligations contemplated of them under the trust schemes including the relevant obligations relating to the payment of the scheme consideration in accordance with the terms of the trust schemes. Mr Jackman submits and I accept that materially identical arrangements have been held to be sufficient in previous cases: Re APN News & Media Ltd above at [23]; Re Mirvac Funds Management Ltd in its capacity as responsible entity of Mirvac Industrial Trust [2014] NSWSC 1569 at [7]. This matter provides no reason not to give the advice that is sought. 3. Second, Mr Jackman notes that cl 9 of the SIA is an exclusivity provision, which includes "no-shop", "no-talk" and "no due diligence" restrictions together with a "notice of approaches" obligation and a "matching right" obligation. He submits, and I accept, that exclusivity restrictions in this form are commonplace in s 411 schemes and trust schemes, and that the exclusivity period is capable of precise ascertainment and extends to no longer than six months from the date of the SIA or such other date as is agreed by CHPIP and IAP RE. I accept that this is a reasonable period and consistent with the periods accepted in other cases. Mr Jackman points out that the no-talk and no due diligence restrictions are subject to a "fiduciary carve out" under cl 9.5 of the SIA and that prior authority does not require a fiduciary carve-out with respect to "no-shop" provisions: Re Coles Group Ltd (2007) 25 ACLC 1380 at [62]–[63]; Re Hostworks Group Ltd (2008) 26 ACLC 137 at [34]–[37]; Re Macquarie Private Capital A Ltd (2008) 26 ACLC 366 at [18]-[19]. This matter also provides no reason not to give the advice that is sought. 4. Third, Mr Jackman notes that cl 10 of the SIA provides for the payment of a break fee of $12.8 million by IAP RE in certain circumstances, which do not include the failure by the IAP securityholders to pass the proposal resolutions. That clause records, inter alia, that: "IAP RE believes, having taken advice from its legal advisers and financial advisers, that the Schemes will provide significant benefits to IAP [s]ecurityholders, and IAP RE acknowledges that, it is appropriate for IAP RE to agree to the payments referred to in this clause 10 in order to secure for IAP [s]ecurityholders the opportunity to vote on the [s]chemes." That clause also records that CHPIP has requested that provision be made for the break fee, without which CHPIP would not have entered into the SIA; both the CHPIP Board and IAP RE board believe that it is appropriate for both parties to agree to the payment referred to in this clause to secure CHPIP's participation in the schemes; and both parties have received legal advice on the SIA and the operation of that clause. A director of IAP RE, who was involved in the negotiation of the SIA, gives evidence that the statements in cl 10.1 of the SIA regarding IAP RE and the board of IAP RE are accurate and the break fee of $12.8 million is approximately 1% of the value of IAP securities on issue implied by the scheme consideration of $1.90 per IAP security (Herman 12.5.22 [18]-[19]). I accept that this matter provides no reason not to give the advice that is sought. 1. Fourth, Mr Jackman refers to a memorandum of understanding ("MOU") involving 360 Capital Group (being the stapled entity comprising 360 Capital Group Limited and 360 Capital Investment Trust) and 360 Capital REIT (being the stapled fund comprising 360 Capital Passive REIT and 360 Capital Active REIT), which together are a substantial holder of IAP securities. Mr Jackman notes that CHPIP Guarantor and 360 Capital have entered into the MOU which grants CHPIP Guarantor a call option to require 360 Capital to transfer its 19.9% ownership interest in IAP securities to the CHPIP Guarantor or its nominee; and contains certain exclusivity arrangements, including certain undertakings restricting 360 Capital's ability to vote, participate in any discussions in respect of a Competing Transaction (as defined in the MOU), or to sell or agree to sell any of its existing IAP securities to a third party without the prior written consent of the other party. The MOU also provides 360 Capital with a call option, and CHPIP Guarantor with a put option, in respect of five properties and assets owned and controlled by IAP Group, although the scheme booklet indicates that CHPIP has confirmed that the parties to the MOU are no longer proceeding with a transaction in relation to two of those properties, and 360 Capital and CHPIP have agreed that the put and call options will not be exercisable prior to delisting of IAP on the JSE and also agreed other matters. 2. The independent expert has expressed a view, in the form of a negative assurance opinion, that nothing has come to their attention that would cause them to believe that the arrangements contained in the MOU would constitute the receipt by 360 Capital of a collateral benefit (as that term is used in the Takeovers Panel Guidance Note 21: Collateral Benefits). Mr Jackman submits that IAP RE considers that there is no collateral benefit for this purpose. He also submits that, where there is no net benefit to 360 Capital and where the consideration that 360 Capital would receive for its IAP securities, should the call option under the MOU be exercised, is equal to the scheme consideration, then the restrictions imposed by the MOU on 360 Capital's ability to vote on the trust schemes in the absence of a superior proposal do not create a separate class: Re Pulse Health Ltd [2017] NSWSC 651 at [13]-[14]. Importantly, IAG RE has undertaken that it will tag the votes exercised by 360 Capital, so that the Court is in a position to identify whether the trusts scheme would have been approved by other unitholders, disregarding those votes. 3. In Re The Trust Company (RE Services) Ltd as responsible entity of the VitalHarvest Freehold Trust [2021] NSWSC 108, in addressing an arrangement which may have constituted a collateral benefit in a different context, I referred (at [35]-[36]) to Counsels' submissions and noted that: "Mr Williams notes that the relevant test, in the company scheme context, to determine whether some members are in a different class from others is whether the membership interests of those members are affected by the scheme in such a way that it is impossible for them to consult together with the other members with a view to their common interests. He refers to the consideration of that test in earlier case law and by the Court of Appeal in Re Boart Longyear Ltd (2017) 121 ACSR 328; [2017] NSWSC 567 at [68]-[69]. He also refers to a possible difference of emphasis in the approach taken by Beach J in Re Healthscope Ltd [2019] FCA 542 at [106]-[121]. It may be that any such difference is more apparent than real, but I am bound by and would apply the approach taken in Re Boart Longyear Ltd above. Mr Williams submits, and I accept, that the case law indicates that a collateral benefit creating a different commercial interest between members, rather than different rights under or in connection with a scheme, generally does not require separate classes, although it may be relevant to the exercise of the Court's discretion whether to approve the scheme at the second Court hearing. … I will assume, without deciding, that the requirement for separate classes of members for voting purposes should be applied in the context of a trust scheme as well as in company schemes, although I recognise there may be a question as to that matter where a scheme's constitution does not contemplate voting by class. I accept that there is no difference in the treatment of Primewest and other unitholders in VTH under the [t]rust [s]cheme, which affects the rights of all unitholders in the same way, and any impact of the Facilitation Deed is upon Primewest's commercial interests. It seems to me that any collateral benefit provided to Primewest, and any commercial interest arising under the Facilitation Agreement can be addressed by tagging of votes, as proposed by VTH RE, and as a matter relevant to whether to give the advice sought at the second Court hearing, consistent with the approach taken in Re Boart Longyear Ltd above at [68]-[69]. It seems to me that same analysis applies so far as entities in the Macquarie Group hold units in VTH." 1. It seems to me that, here, there is again a question whether a requirement for separate classes of members for voting purposes should be applied in the context of a trust scheme, particularly where a scheme's constitution does not contemplate voting by class; and there is no difference in the treatment of 360 Capital and other IAP securityholders under the trust schemes, which affects the rights of all IAP securityholders in the same way, and any impact of these arrangements is upon 360 Capital's commercial interests. It seems to me that here any collateral benefit provided to 360 Capital, and any commercial interest arising under these arrangements can be addressed by tagging of votes, as accepted by IAP RE, and as a matter relevant to whether to give the advice sought at the second Court hearing, consistent with the approach taken in Re Boart Longyear Ltd above at [68]-[69]. 2. Fifth, Mr Jackman addresses the question of performance rights, to which reference is made in section 8.2 of the scheme booklet. He notes that IAP makes offers of performance rights to eligible employees to align remuneration with employee accountability and securityholder interests by providing an opportunity for those employees to receive equity interests in IAP, and the scheme booklet discloses the manner in which they will be treated under the trusts schemes, which will potentially result in total cash payments to IAP's senior management and certain other employees of approximately A$1,511,662.80. Mr Jackman also notes that Mr Katz, who is the chief executive officer of IAP and a director of IAP RE, holds 415,540 Performance Rights (as defined) and is the only director of IAP RE who holds such rights. The benefit to Mr Katz from the treatment of his performance rights as described above is disclosed in the scheme booklet, in the manner accepted in Re Villa World Limited [2019] NSWSC 1207 and subsequent cases. This matter also provides no reason not to give the advice that is sought. 3. Sixth, Mr Jackman notes that cl 28.3 of the supplemental deeds poll in respect of IPF I and IPF II contain a "deemed warranty", by which each participant in the trust schemes warrants that all their units to be transferred under the trust schemes will, as at the date of transfer, be fully paid and free from all encumbrances, that they have full power and capacity to transfer their units together with any rights and entitlements attaching to those units, and that they have agreed to the variation, cancellation or modification of the rights attached to their IAP securities (if any) in accordance with the proposal without the need for any further act by them. He submits, and I accept, that clauses in these terms are permissible and now commonplace: Re APN News & Media Ltd above; Re Magellan Asset Management Ltd (as responsible entity of Magellan Global Fund) (2020) 150 ACSR 23; [2020] NSWSC 1535 at [22]. The existence of the deemed warranties are appropriately disclosed in section 8.7 of the scheme booklet as contemplated by Re APN News & Media Limited above. 4. Seventh, Mr Jackman addresses aspects of the dual-listed nature of the Irongate entities in supplementary submissions and I have referred to the expert evidence led as to South African law above. Mr Jackman points out that, although IAP securities are listed on both the ASX and the JSE, the constitutions of each of IPF I and IPF II provide that the rights, liabilities and obligations of IAP RE as the responsible entity of those Australian registered managed investment schemes and the securityholders of IPF I and IPF II are governed by the law of New South Wales and IAP RE has its registered address in Sydney, New South Wales (cl 27.1 of the constitutions of IPF I and IPF II, McHerron 18.5.22, Ex ZSM-1, tabs 1-2; Morris 6.5.22, annexure A, p. 5). He points out that the SIA and the Deeds Poll to amend the constitutions of IPF I and IPF II are also governed by the laws of New South Wales and the trust schemes are to be implemented in accordance with and governed by New South Wales law and refers to the evidence as to South African law, including that: "on the basis that IPF I and IPF II are each Australian domiciled trusts which are governed by the laws of New South Wales, South African law does not apply to the IPF I and IPF II trust constitutions or the validity of any amendments to the IPF I and IPF II trust constitutions." 1. The scheme booklet also discloses JSE's determination in respect of the scheme and I have referred to Mr Natale's evidence as to that matter above. 2. Mr Jackman also submits, and I accept, that, on this basis: "Unlike a company scheme under s 411 of the Corporations Act 2001 (Cth) (where consideration may need to turn to whether orders under s 411 may be recognised in another jurisdiction for the transaction the subject of those orders to have effect), the orders sought in this proceeding are, at their core, judicial advice relating to an Australian responsible entity of two Australian managed investment schemes calling meetings of two trusts whose constitutions are governed by NSW law. Judicial advice, however, is personal to the trustee, with s 63(2) of the Trustee Act 1925 (NSW) precluding any trustee, who acts in accordance with the advice, from being held liable for breach of trust so long as the proviso to that section is satisfied: Macedonian Orthodox Community Church St Petka Incorporated v His Eminence Petar The Diocesan Bishop of The Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66 at [64], [65]. Where the law governing the rights and obligations of IAP RE and IAP [s]ecurityholders is the law of New South Wales, that law will govern the question of breach. Though consent of the JSE is required for delisting, the [s]cheme [b]ooklet disclosure set out above indicates that JSE will give that consent on the basis set out above. … this is a proper matter to proceed by way of a trust scheme in this Court." 1. I am satisfied that this matter, now comprehensively addressed in this way, gives no reason not to give the advice sought. 2. Finally, Mr Jackman submits, and I accept, that the form of the orders sought are consistent with existing practice and in a similar form to orders made in, for example, Re Magellan Asset Management Ltd (as responsible entity of Magellan Global Fund above and Re Australian Unity Property Ltd (as responsible entity for Australian Unity Diversified Property Fund) [2021] NSWSC 1494. Orders 1. For these reasons, I made the orders sought by IAP RE as the responsible entity of the trusts at the conclusion of the first Court hearing on 19 May 2022. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 07 June 2022