Macquarie Goodman Funds Management Ltd [2004] NSWSC 1197

Reported Decision : 52 ACSR 194

New South Wales Supreme Court

CITATION : Macquarie Goodman Funds Management Ltd [2004] NSWSC 1197 HEARING DATE(S) : 02/12/04 JUDGMENT DATE : 2 December 2004

JURISDICTION: Equity Division Corporations List JUDGMENT OF : Barrett J DECISION : Judicial advice given

CATCHWORDS : CORPORATIONS - registered managed investment scheme - alteration of constitution by special resolution - alteration "cannot take effect until" lodgment with ASIC - whether resolution may be subject to condition to be satisfied after lodgment LEGISLATION CITED : Corporations Act 2001 (Cth), s.601GC Re Adelaide Unley & Mitcham Tramway Co Ltd [1907] SALR 35 Re Australian Estates and Mortgage Co Ltd [1910] 1 Ch 414 Re Hills Motorway Ltd (2002) 43 ACSR 101 CASES CITED : Re Homemaker Retail Management Ltd (2002) 40 ACSR 116 re Mirvac Limited (1999) 32 ACSR 107 Re Mirvac Ltd (1999) 32 ACSR 118 Re Westfield Holdings Ltd (2004) 49 ACSR 734 Re Westfield Holdings Limited (2004) 49 ACSR 741 PARTIES : Macquarie Goodman Funds Management Limited as responsible entity of Macquarie Goodman Industrial Trust - Plaintiff FILE NUMBER(S) : SC 6481/04 COUNSEL : Mr I.M. Jackman SC - Plaintiff SOLICITORS : Allens Arthur Robinson - Plaintiff

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST

BARRETT J

THURSDAY 2 DECEMBER 2004

6481/04 - MACQUARIE GOODMAN FUNDS MANAGEMENT LIMITED AS RESPONSIBLE ENTITY OF MACQUARIE GOODMAN INDUSTRIAL TRUST

JUDGMENT

1 The plaintiff is the responsible entity of a registered managed investment scheme known as the Macquarie Goodman Industrial Trust ("MGI"). In that capacity, it seeks the opinion advice and direction of the court under s.63 of the Trustee Act 1925 on matters relevant to a proposal under which units of MGI will become components of stapled securities together with shares in Macquarie Goodman Management Limited ("MGM"). A scheme of arrangement under Part 5.1 of the Corporations Act 2001 (Cth) between MGM and its members is proposed as part of the overall stapling plan. The Court has been asked to make, and will shortly make, orders in connection with the convening of a meeting for the purpose of considering such a scheme of arrangement. 2 In accordance with what has become common practice in matters of this kind (see Re Mirvac Ltd (1999) 32 ACSR 118, Re Homemaker Retail Management Ltd (2002) 40 ACSR 116, Re Hills Motorway Ltd (2002) 43 ACSR 101, Re Westfield Holdings Ltd (2004) 49 ACSR 734), the plaintiff, as the responsible entity of MGI, seeks judicial advice to the effect that it will be justified in pursuing the overall stapling plan up to and including the point at which holders of units of MGI are given an opportunity to vote on the proposal at a meeting of unit holders convened for the purpose. The resolution to be considered at the meeting of unit holders is a resolution to adopt a new constitution of MGI. The provisions of the new constitution are designed to interact with the terms of the proposed scheme of arrangement between MGM and its members and certain contractual arrangements in such a way as to effect the stapling of the securities. 3 One of the matters that has been debated in connection with the application for judicial advice centres upon the means by which the constitution of a managed investment scheme may be altered. MGI adopted a constitution in 2000 at the time of its transition to a registered managed investment scheme. That appears to have been done by a supplemental deed poll of 27 April 2000, no doubt in accordance with transitional provisions of the legislation and the scheme of the pre-existing unit trust deed. 4 Once the relevant provisions attained the status of the constitution of a registered managed investment scheme, the matter of its amendment and replacement came to be governed by s.601GC of the Corporations Law as it then was; now, of course, the corresponding provision of the Corporations Act. 5 Section 601GC(1) says that the constitution of a registered scheme may be modified, or repealed and replaced with a new constitution, in one of two ways. The one presently relevant is "by special resolution of the members of the scheme": s.601GC(1)(a). Section 601GC(2) requires the responsible entity to lodge with ASIC a copy of the modification or the new constitution and says that the modification, or repeal and replacement, "cannot take effect until the copy has been lodged". 6 The existing constitution to which I have referred also contains a provision about its alteration. Clause 22.1 says: "Subject to the Law, Goodman Hardie may amend this Constitution by deed."