Abacus Funds Management Ltd [2006] NSWSC 80

Reported Decision : 56 ACSR 693 (2006) 24 ACLC 319

New South Wales Supreme Court

CITATION : Abacus Funds Management Ltd [2006] NSWSC 80

HEARING DATE(S) : 20/02/06

JUDGMENT DATE : 20 February 2006

JURISDICTION : Equity Division Corporations List

JUDGMENT OF : Barrett J

EX TEMPORE JUDGMENT DATE : 02/20/2006

DECISION : Judicial advice given

CATCHWORDS : CORPORATIONS - managed investment schemes - stapled securities - provision for compulsory sale of securities of holders in countries with difficult regulatory regimes - whether Gambotto principles apply - TRUSTS AND TRUSTEES - judicial advice - where no affected beneficiary wishes to be heard

LEGISLATION CITED : Trustee Act 1925, s.63(1)

Cachia v Westpac Financial Services Limited (2000) 170 ALR 65 CASES CITED : Gambotto v WPC Limited (1994) 182 CLR 432 Re Abacus Funds Management Ltd [2005] NSWSC 1309 Re Australand HoldingsLtd (2005) 54 ACSR 687

PARTIES : Abacus Funds Management Limited - Plaintiff

FILE NUMBER(S) : SC 6186/05

COUNSEL : Mr B.A.J. Coles QC - Plaintiff

SOLICITORS : Abbott Tout - Plaintiff

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

BARRETT J

MONDAY 20 FEBRUARY 2006

6186/05 ABACUS FUNDS MANAGEMENT LIMITED

JUDGMENT

1 On 12 December 2005, Campbell J gave judicial advice under s.63(1) of the Trustee Act 1925 to the plaintiff, in its capacity as responsible entity of two managed investment schemes, each of which takes the form of a unit trust: see Re Abacus Funds Management Ltd [2005] NSWSC 1309. 2 The orders made by his Honour were to the effect that the plaintiff, as trustee or responsible entity in each case, was justified in progressing a certain proposal to the point where meetings of members of the managed investment schemes and meetings of members of associated companies had considered and voted upon certain proposed resolutions. The purpose of the resolutions was to cause two sets of stapled securities, one involving the Abacus Trust and the other involving the Abacus Diversified Income Fund, to be further stapled so that each relevant person came to hold units of two trusts and shares in two companies in such a way that the four discrete securities were linked and could only be traded and transferred together. 3 Relevant background is provided by paragraphs [2] to [7] of his Honour's judgment: "[2] Each of those management investment schemes involve property being held on the terms of a unit trust. Each of the units in those unit trusts is stapled to a share in a corporation. The units in one of the unit trusts are stapled to shares in one corporation, the units in the other unit trust are stapled to shares in a different corporation. The stapled security formed by one of the units, and the share to which it is stapled, is listed on the Australian Stock Exchange, with the stapled securities known as Abacus Property Group. The other stapled security, known as the Abacus Diversified Income Fund, is not listed.