Supreme Court New South Wales Medium Neutral Citation: Westfield Management Ltd v AMP Capital Nominees Ltd & anor [2011] NSWSC 1015 Hearing dates: 23 August 2011 Decision date: 01 September 2011 Jurisdiction: Equity Division - Duty List Before: Ward J Decision: Injunctive relief granted Catchwords: CORPORATIONS - application for final injunction to restrain unitholder in registered management investment scheme from voting for an extraordinary resolution to wind up the scheme pursuant to ss 601NB and 601NE of the Corporations Act 2001 (Cth) - proper construction of joint venture agreement and trust deed provisions - whether statutory right to apply for winding up of scheme under s 601NB overrides a contractual provision to exercise voting rights so as to give effect to intent of a prohibition on sale of property without written consent of all unitholders - HELD - injunction granted to restrain vote in favour of proposed resolution Legislation Cited: Corporations Act 2001 (Cth) Cases Cited: Admiralty Commissioners v Valverda (Owners) [1938] AC 173 Alpha Wealth Financial Services Pty Ltd v Frankland River Olive Co Ltd (2008) 66 ACSR 594 Bidald Consulting Pty Ltd v Miles Special Builders Pty Ltd [2005] NSWSC 1235; (2005) 226 ALR 510 BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266 Brown v R (1986) 160 CLR 171 Byrnes v Kendle [2011] HCA 26 Capelli v Shepard (2010) 77 ACSR 35 Commonwealth of Australia v Verwayen (1990) 170 CLR 394 Cordiant Communications (Australia) Pty Ltd v The Communications Group Holdings Pty Ltd [2005] NSWSC 1005 Hooper v Lane (1859) 6 HL Cas 443; (1859) 10 ER 1368 ING Funds Management Limited v ANZ Nominees Limited [2009] NSWSC 243; (2009) 228 FLR 444 MTM Funds Management Ltd v Cavalane Holdings Pty Ltd (2000) 158 FLR 121 Puddephatt v Leith [1916] 1 Ch 200 Re Stacks Managed Investments Ltd (2005) 219 ALR 532 Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 240 CLR 45 SA Maritime et Commerciale of Geneva v Anglo Iranian Oil Co Ltd [1954] 1 WLR 492 Seven Network (Operations) Ltd and Ors v James Warburton (No 2) [2011] NSWSC 386 Southern Wine Corporation Pty Ltd (in liq) v Frankland River Olive Co Ltd (2005) 31 WAR 162; [2005] WASCA 236 Texts Cited: Austin & Black's Annotations to the Corporations Act Category: Principal judgment Parties: Westfield Management Limited as trustee for the Westart Trust (Plaintiff) AMP Capital Property Nominees Limited as nominee of UniSuper Limited (in its capacity as trustee of the UniSuper superannuation fund) (First Defendant) UniSuper Limited (in its capacity as trustee of the UniSuper superannuation fund) (Second Defendant) Representation: Counsel I Jackman SC with J Potts (Plaintiff) P Cosgrave SC with M Borsky and W Edwards (Defendants) Solicitors Speed and Stracey Lawyers (Plaintiff) Allens Arthur Robinson (Defendants) File Number(s): 11/262574 Judgment 1HER HONOUR: Before me in the duty judge list on 23 August 2011 was an application brought by way of summons filed on 15 August 2011 by Westfield Management Limited. Westfield, in its capacity as trustee for the Westart Trust, is the holder of one third of the units in the KSC Trust (ARSN 093 322 455). 2The KSC Trust is a registered managed investment scheme under Chapter 5C of the Corporations Act 2001 (Cth). The responsible entity and trustee of the KSC Trust is AMP Capital Investors Limited (formerly known as AMP Henderson Global Investments Limited). The remaining two-thirds of the units in the Trust are held by AMP Capital Property Nominees Limited (the first defendant), in its capacity as nominee of UniSuper Limited (the second defendant). I will refer to the respective AMP entities as AMPCI (the responsible entity) and AMPCN (the unitholder as nominee for UniSuper), consistently with the way reference was made to them during the hearing. (Where reference is made to them collectively, it is as the AMP entities.) 3The application before me is for final injunctive relief to restrain UniSuper (and its nominee AMPCN) from voting (at a meeting that has been convened by AMPCI, at the request of AMPCN, to be held on 5 September 2011), by itself or through any agent or nominee, for the proposed extraordinary resolution to wind up the KSC Trust and from voting for any other extraordinary resolution to wind up the Trust pursuant to ss 601NB and 601NE of the Corporations Act. Relevantly, there is no application to restrain the defendants from seeking a winding up of the Trust under s 601ND of the Corporations Act .) 4Westfield contends that, by a joint venture agreement dated 30 October 2000 and binding (in the case of both Westfield and AMPCN, as a result of accession to the terms of the deed by each on the acquisition of units in the Trust) on the respective unitholders and the responsible entity, UniSuper has (in the present circumstances, namely where there is no written consent by Westfield to the sale of the Trust property) contracted away its right unilaterally to vote for the winding up of the KSC Trust pursuant to a resolution under s 601NB of the Corporations Act and thus cannot vote (or instruct its nominee to vote) in favour of the proposed resolution to wind up the KSC Trust at the meeting on 5 September 2011, without Westfield's prior written consent (by which I understand the reference to be to a consent to the sale of the main asset of the Trust). 5The AMP entities contend that Westfield's interpretation of the Joint Venture Agreement is misconceived for at least two reasons: first, because it is said that, properly construed, the Joint Venture Agreement and the Trust Deed do not impose any restraint on members exercising their statutory rights to wind up the scheme; and, secondly, because it is said that the power to wind up the scheme under the Corporations Act should prevail to the extent of any inconsistency between it and the contractual provisions of the Joint Venture Agreement and the Trust Deed. Issues 6The questions for consideration on this application, therefore, are: (i) whether, on the proper construction of the Joint Venture Agreement and Trust Deed a unitholder (in this case AMPCN, as nominee for UniSuper) is precluded from exercising its voting rights to bring about a winding up of the Trust without the written consent of the remaining unitholder(s) (here, Westfield), where to do so would cause a sale of the property of the Trust without the prior written consent of all the unitholders; and (ii) if so, whether there is any principle of law that prevents the Joint Venture Agreement from being given effect in that regard. Summary 7For the reasons set out below, I am of the view that on the proper construction of clauses 10.1 and 16.2 of the Joint Venture Agreement AMPCN is contractually precluded from voting in favour of the proposed winding up resolution (unless Westfield has given its prior written consent to the sale of the shopping centre) in circumstances where the necessary effect of that resolution would be to cause a sale of the shopping centre in the winding up of the Trust without Westfield's written consent and where AMPCN has bound itself to use its voting rights as unitholder so as fully and completely to give effect, inter alia, to the intent of the prohibition in clause 10.1(a) of the Joint Venture Agreement. 8I am of the view that the statutory right on the part of the members of a scheme to make a winding up application pursuant to s 601NB is not lost simply because of the import of the parties' contractual agreement as to how their voting power as unitholders is to be exercised. However, where the parties, by their contract, have agreed to exercise their voting rights in a particular way or so as to give full effect to the intent of their agreement, and voting for a resolution to wind up the company would breach that agreement, I do not consider that s 601NB overrides the parties' agreement in the sense of rendering it unenforceable as a matter of public policy (at least where the agreement does not deprive a unitholder of all means to seek a winding up of the scheme if that be so intended, and hence where it cannot be said that the unitholder is left locked into participation in such a scheme). 9The question is as to whether it is contrary to the policy underlying s 601NB of the Act, to enforce by way of injunction a contractual provision which has the effect of precluding a unitholder (AMPCN) from invoking its statutory right to seek a winding up of a managed investment scheme. 10In the circumstances of the present case, I do not think it is. There is no suggestion that the scheme is insolvent nor is it the case that requiring AMPCN to honour its contractual obligation under clause 16.2 would lock AMPCN (and UniSuper) indefinitely into participation in a scheme at the election of Westfield or dependent on its consent to the sale of the property. Not only are there other avenues by which AMPCN could exit the scheme (for example, by transferring its units in an approved fashion under the Joint Venture Agreement) but it would also be open to AMPCN (without exercising its voting rights and hence without any apparent breach of clause 16.2) to seek a winding up on the just and equitable ground pursuant to s 601ND (say, if there were to remain a deadlock between the unitholders as to the sale of the property and ongoing operation of the scheme). 11Therefore, I propose to grant the injunctive relief sought on the basis that to leave Westfield to a claim for damages for breach of the Joint Venture Agreement (in the event that AMPCN proceeds on the direction of UniSuper to pass the resolution as proposed at the meeting on 5 September 2011) seems likely to be an inadequate remedy for such a breach, due to the difficulty of determining how that damage should be quantified and noting that the underlying dispute is as to the sale of real property. That said, I do not propose to grant the broader form of injunctive relief sought as I do not consider that the circumstances warrant such an injunction. Background 12The KSC Trust was constituted and is governed by the KSC Trust Deed dated 23 March 1994 (as amended by various amending deeds). The initial unitholders in the Trust entered into a unitholders' agreement in respect of the Trust on 29 March 1994, the terms of which are not relevant for present purposes. 13By 30 October 2000, the unitholders in the Trust were AMP Henderson Global Investors Limited (now known as AMPCI) in its capacity as responsible entity for the AMP Diversified Property Trust, PPS Nominees Pty Limited and Schroders Nominees Limited as nominee for UniSuper Limited (the latter as trustee of the Superannuation Scheme for Australian Universities). 14Those parties entered into the KSC Trust - Unitholders' and Joint Venture Agreement dated 30 October 2000 but stated to be effective from 1 July 2000, by way of replacement of the then existing unitholders' agreement which was terminated as from 1 July 2000. PPS was defined in the Joint Venture Agreement as Syndicate; Schroders as SAPN. Relevantly (as will later be seen when construing clause 16.2), AMPCI was a party to the Joint Venture Agreement in two separate capacities: as unitholder (in which capacity it was defined in the agreement as ADP) and as responsible entity for the KSC Trust (in which capacity it was defined as AMPAM). UniSuper was also a party to the Joint Venture Agreement. 15Westfield first obtained units in the KSC Trust in 2003, acquiring the whole of the 25% holding then held by PPS Nominees. In 2008, it acquired a proportionate share of the 25% unitholding of AMPCI (the balance of that holding being acquired by AMPCN). Following those acquisitions, the present position is that Westfield owns one-third of the units in the Trust and AMPCN (as nominee for UniSuper) the balance. AMPCI (the responsible entity) and Schroders no longer own units in the trust. Westfield and AMPCN acceded to the terms of the Joint Venture Agreement by deeds dated 30 January 2008. 16The principal asset of the KSC Trust is a shopping centre known as the Karrinyup Regional Shopping Centre, which is situated in Perth. It was valued as at 31 December 2009 at $545 million. Although the Joint Venture Agreement makes provision for other real property to be acquired as an asset of the Trust, by reference to the definition of "Property" in clause 30.1 of the Joint Venture Agreement any such other real property was to be land intended to be held and used as part of the Karrinyup shopping centre land from time to time, thus incidental to the use of the shopping centre. (This supports the submission by Westfield that the purpose of the scheme, as objectively seen from the terms of the Joint Venture Agreement, was the acquisition and operation of the shopping centre.) 17On 10 August 2011, a Notice of Meeting was issued by AMPCI convening a meeting of the members of the KSC Trust to be held at 2pm on 5 September 2011 to consider a proposed extraordinary resolution to wind up the KSC Trust pursuant to ss 601NB and 601NE of the Corporations Act 2001 (Cth). (An earlier meeting, scheduled by notice dated 6 June 2011 to consider a similar resolution, did not proceed - the request for that meeting having in the meantime been withdrawn by AMPCN after objection was taken thereto by Westfield.) AMPCI issued the August Notice of Meeting pursuant to a request made by letter dated 9 August 2011 from AMPCN, as nominee for UniSuper. 18The proposed extraordinary resolution is in the following terms: That, pursuant to sections 601NB and 601NE of the Corporations Act 2001 (Cth), the Scheme be wound-up in accordance with the Corporations Act and the Trust Deed governing the Scheme. 19Section 601NB of the Corporations Act provides for the winding up of a scheme at the direction of members in the following terms: If members of a registered scheme want the scheme to be wound up, they may take action under Division 1 of Part 2G.4 for the calling of a members' meeting to consider and vote on an extraordinary resolution directing the responsible entity to wind up the scheme. 20There is no dispute that an extraordinary resolution, having regard to the definition under s 9 of the Corporations Act , means a resolution, relevantly, that has been passed by at least 50% of the total votes that may be cast by members entitled to vote on the resolution (including members who are not present in person or by proxy). Therefore, as AMPCN holds two-thirds of the shares, it will be in a position to carry the resolution at the meeting and it must be assumed (having regard to its position in the current litigation) that it intends to do so. 21If a resolution under s 601NB is duly passed, in effect directing the responsible entity to wind up the scheme, then s 601NE provides that the responsible entity must ensure that the scheme is wound up "in accordance with its constitution and any orders under subsection 601NF(2)". Senior Counsel for Westfield (Mr Jackman SC) submits that part of the constitution of the Trust (for the purposes of s 601NE), in accordance with which any winding up of the KSC Trust would be required to be effected, is the Joint Venture Agreement. It is not accepted by Senior Counsel for the AMP interests (Mr Cosgrave SC), that the Joint Venture Agreement (though governing the relations between the parties in connection with the Trust) forms part of the constitution of the Trust. I will address this issue in due course. Relevant Provisions of the Joint Venture Agreement 22The Joint Venture Agreement was entered into as a deed expressly to record the arrangements between the unitholders in relation to the Trust (clause 1.4). Subject to the provisions of the deed, it enures for the benefit of and is binding upon the successors and permitted assigns of the parties to the deed (clause 1.6). There are provisions which broadly require that on a transfer or encumbrance of the units the transferor or encumbrancer procure the incoming entity to assume the obligations under the Joint Venture Agreement. 23Clause 30.1 of the Joint Venture Agreement sets out the definitions which apply unless a contrary intention appears in the deed. Relevantly, the term "Unitholders" is defined to mean: ADP (while it holds Units), Syndicate (while it holds Units), UniSuper (while SAPN or it holds Units) and any other person who holds Units in the Trust from time to time ... 24The definition of Unitholders went on to provide: ...and "Unitholder" means each or any one of the Unitholders as the context may require 25Clause 30.4 of the Joint Venture Agreement, on which Westfield places weight, provides that to the extent of any inconsistency between the deed and the KSC Trust Deed, the provisions of the Joint Venture Agreement are to prevail. 26For the purposes of the present application, the provisions identified by Westfield as central are clauses 10, 13 and 16 of the Joint Venture Agreement. 27Clause 10 (headed "Sale of Property and acquisition of additional investments") provides: Sale of Premises 10.1 (a) [AMPCI], in its capacity as responsible entity of the KSC Trust, shall not sell the Property or any substantial part thereof, without the written consent of the Unitholders . (my emphasis) (b) On completion of the sale of the Property, or if part of the Property has already been sold, the completion of the sale of the remainder of the Property, [now AMPCI], in its capacity as responsible entity of the KSC Trust, shall thereupon determine the Trust unless otherwise directed by the Unitholders. Acquisition of additional investments 10.2 [AMPCI], in its capacity as responsible entity of the KSC Trust, shall not without the written consent of the Unitholders acquire any investments other than the Property or for the short-term investment of liquid funds. 28Clause 13.1 (under a clause headed "Termination") provides: 13.1 Unless the Unitholders otherwise unanimously agree, in writing , this deed terminates on the earlier of: (a) the later of the date on which the Trust is terminated or the assets of the Trust are realised ; (b) the date that a new deed is entered into with the consent of the parties in lieu of this deed; and (c) the date that any Unitholder's Group becomes the sole holder of all Units issued in the Trust. (my emphasis) 29Clause 16.2 (under the sub-heading 'Exercise of Voting Rights") provides: 16.2 Each and all of the Unitholders mutually agree that they will so exercise their respective voting rights as unitholders under the Trust Deed so as to most fully and completely give effect to the intent and effect of the provisions of this deed. (my emphasis) 30Reference is also made to clause 19.1, which provides: 19.1 Each party agrees, at its own expense, on the request of another party, to do everything reasonably necessary to give effect to this deed and the transactions contemplated by it, including the execution of documents. 31The Joint Venture Agreement contains provisions for the transfer by unitholders of all or any of the units held in the Trust to "approved" transferees (clause 5) and for pre-emptive rights in relation to other transfers of units (clause 6). No transfer of any units or interest therein is to be effective unless and until the transferee has agreed to assume all of the obligations of the transferor under the Joint Venture Agreement in accordance with clause 6.6. 32There are also provisions, to which I was taken in the course of submissions, in relation to the establishment of the Unitholders' Committee, which is obliged to review, consider and make determinations on substantive issues with respect to the management of the Trust as set out in clause 7.4 of the Joint Venture Agreement, and in relation to matters such as repairs and alterations to the property (clause 8) and the future redevelopment or refurbishment of the property (clause 9). Issues for Determination (i) Construction of Joint Venture Agreement 33It is not disputed that, in the construction of the Joint Venture Agreement, regard must be had to the objectively ascertained intention of the parties in entering into that arrangement. Mr Jackman referred to what was said by Heydon and Crennan JJ in Byrnes v Kendle [2011] HCA 26 at [98]: A contract means what a reasonable person having all the background knowledge of the "surrounding circumstances" available to the parties would have understood them to be using the language in the contract to mean. 34It is submitted by Mr Jackman, by reference to the provisions of the Joint Venture Agreement referred to above, that the objective intention of the parties when entering into (or, perhaps more precisely in the case of Westfield and AMPCN, acceding to) the arrangements embodied in the Joint Venture Agreement, was to make provision for the regulation of a closely held unit trust business structure, designed for the ownership and operation of a major retail shopping centre. Mr Jackman emphasises that each party expressly agreed (pursuant to clause 16.2) to exercise its voting rights "so as to most fully and completely give effect to the intent" of that arrangement and that the Joint Venture Agreement was to be the paramount document governing the exercise by the unitholders and members of their rights and obligations as unitholders and members was to be the Joint Venture Agreement. I accept that the provisions of the Joint Venture Agreement warrant such a conclusion. 35The argument by Westfield that the proper construction of the Joint Venture Agreement precludes the unilateral winding up of the Trust (if that would cause a sale of the property to be effected without its consent), is put broadly on two bases - first, that clause 16.2 operates to preclude a unitholder from voting for a winding up resolution if it would indirectly have the effect of causing a sale of the property without unanimous consent of the unitholders (which turns on the construction of clause 16.2 and its operation in conjunction with clause 10.1); and, second, that any sale of the property as part of the winding up of the Trust could only occur if there were to be unanimous consent to the sale (since under s 601NE the scheme must be wound up "in accordance with its constitution" and it is submitted that the Joint Venture Agreement is part of the constitution of the trust). It was also, as I understand it, Westfield's position that clause 10 of itself prohibits a winding up in these circumstances as it extends to a sale effected indirectly by way of a winding up. * Does clause 10 prohibit the making of a resolution to wind up the property if that will be the inevitable consequence of such a resolution? 36As Mr Jackman notes, the winding up of the KSC Trust must inevitably involve the sale of the property. As a practical matter, the property cannot be divided and transmitted to unitholders in specie and, in any event, clause 17.5(b) of the Trust Deed provides that upon termination of the Fund the responsible entity (defined in the deed as the Manager) shall as soon as practicable realise the whole of the Fund, convert the same into money, and then effect a distribution of the proceeds as provided for in that clause. Clause 17.6 of the Trust Deed provides that the realisation of the Fund and the division of the proceeds amongst the unitholders is to be completed "as soon as is reasonably practicable after the commencement of the termination of the Fund" (though the responsible entity is entitled to postpone the sale of any asset where it is of the view that to do so would be in the best interests of unitholders). 37Mr Jackman submits that this makes it clear that termination in the sense that this term is used in the Trust Deed, does not occur once a resolution to wind up the scheme has been passed or upon the trustee giving notice to unitholders of the termination of the scheme under clause 17.5(a), but, rather, is a process that is not finalised until after the final distribution has been made following the realisation of the Fund. Reference is made in this regard to clause 10.1(b) of the Joint Venture Agreement (which provides, relevantly, that the responsible entity shall determine the Trust on completion of the sale of the property) and clause 13.1(a) (which provides that the deed terminates on the later of the date that the Trust is terminated or the assets of the Trust are realised); the terms of those provisions being extracted earlier in these reasons. 38It is submitted that the inevitable consequence of a winding up resolution being passed under s 601NB will be the sale of the assets of the KSC Trust, including the Karrinyup property, and that this is precisely what clause 10.1 of the Joint Venture Agreement prohibits without Westfield's prior written consent. Mr Jackman submits that it is not surprising that the parties should have contracted to restrict their ability unilaterally to procure a winding up if that would lead to a sale of the property without the consent of all the unitholders, given the nature of the underlying relationships and the objective purpose of the Joint Venture Agreement. 39Westfield submits that clause 10.1, properly construed, prohibits (without the written consent of all unitholders) not only a sale that is effected directly but also one that is effected indirectly (including through a winding up). However, its principal submission, as I understand it, and the one that has found favour with me, is that a unitholder which exercises its voting power in such a way as must inevitably lead to a sale of the property without the consent of all the untiholders (albeit it by means of a winding up) is not acting as it is obliged to do under clause 16.2 so as most fully and completely to give effect to the intent of clause 10.1. 40Mr Cosgrave contends that the argument by Westfield rises no higher than an implication sought to be drawn from clause 10.1 of the Joint Venture Agreement to the effect that, because the sale of the property requires unitholders' consent under that clause, any other act which might lead to such a sale would also require the consent of unitholders and submits that any restraint on members exercising their statutory rights to wind up the scheme purportedly imposed under the contractual agreements would need to be expressed in the very clearest terms. 41Mr Cosgrave submits that, in effect, what Westfield is seeking to do is to imply into the Joint Venture Agreement (contrary to the 'entire agreement' provision in clause 1.5) a term which is not provided therein (namely that a member of a registered managed investment scheme can exercise its rights under s 601NB to call a meeting and vote on a resolution to wind up the scheme only if all unitholders agree thereto) and that the implication of such a term would not satisfy the test in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at [283]; endorsed in, among other cases, Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 240 CLR 45 at [75] - [76], [87]. (In reply, Mr Jackman emphatically disclaimed any reliance on an implied term to that effect, basing Westfield's argument in relation to clause 10.1 solely on construction of the Joint Venture Agreement.) 42Mr Cosgrave notes (and I accept) that there is nothing in the Joint Venture Agreement which expressly requires any of the unitholders to refrain from voting in favour of a winding up resolution. He submits that, since the provisions of the Corporations Law applying to the Trust (both as at the date of the Joint Venture Agreement and as at the date of the subsequent accession thereto by the present parties) were in all material respects identical to the current provisions of the Corporations Act at the time that the Joint Venture Agreement became binding on the parties, the entitlement of each unitholder to consider and vote for an extraordinary resolution under s 601NB was within the contemplation of the parties. It is contended that if the common intention of the parties to the Joint Venture Agreement had been that no winding up would be permitted without the approval of both (or all) unitholders, then there would have been such a term included expressly in the Joint Venture Agreement. The fact that no such provision was included in the Joint Venture Agreement is said to be strong evidence that no such limitation on a unitholder's rights under s 601NB was intended. (I think there is force in that submission but that it does not address the import of clause 16.2 in this context.) 43Mr Cosgrave notes that there are other provisions of the Trust Deed which expressly contemplate a winding up of the scheme without obtaining unitholder approval, referring to clause 17.1 (which permits AMPCI to wind up the Trust at any time by giving three months' notice); clause 17.2 (which contemplates the Trust being wound up automatically upon the position of the responsible entity or trustee being vacant for more than six months); and clause 17.4 (which authorises AMPCI to determine that the Trust is to be wound up if it is of the opinion that, as a result of statutory or regulatory requirements, the Trust assets or any part thereof are to be invested or deposited otherwise than freely in accordance with the discretions given to the responsible entity or the amount of income available for distribution to unitholders would be materially diminished). 44It is noted that in none of these cases does the Joint Venture Agreement expressly prohibit the unitholders, or AMPCI as the responsible entity, from taking steps to wind up the Trust. 45Mr Cosgrave submits that it would be an odd result if winding up under s 601NB required the agreement of both unitholders, while winding up under clause 17.1 required no such consent or agreement. It is submitted that if Westfield's argument were to be accepted and applied consistently, then this would require an impermissible reading down of the powers purportedly conferred under clauses 17.1, 17.2 and 17.4 of the Trust Deed (or lead to the conclusion that those clauses had no effect) (infringing the canon of interpretation that, where possible, all parts of a contract or agreement should be given effect to and no part treated as inoperative). Reliance is placed on SA Maritime et Commerciale of Geneva v Anglo Iranian Oil Co Ltd [1954] 1 WLR 492 at [495] in this regard. 46As to the construction of clause 10.1 (reading it, for the moment, in isolation), I note that it is addressed to the conduct of the responsible entity alone - precluding the sale by it of the property or any substantial part of it without the written consent of the unitholders (that term appearing in the clause with a capital "U"). It does not in terms prohibit any conduct by the unitholders themselves. Further, it speaks only of a 'sale' of the property, not a disposal by other means (still less a sale of the property as a consequence of the winding up of the Trust by direction of a majority of the unitholders in the exercise of a statutory power so to do). 47I do not read clause 10.1 as being itself addressed to the situation of a winding up of the Trust (notwithstanding that a sale will result therefrom) and I accept that had the parties wished to include a prohibition on winding up the Trust without the unanimous consent of the Unitholders (assuming for present purposes that such a provision would have been enforceable and not contrary to public policy) they could readily have done so. (I also accept that a fetter on the right to wind up the scheme should ordinarily be expressed in the clearest of ways.) 48The AMP entities contend that clause 10.1 applies only where the Trust or scheme is operating and ongoing in the ordinary course and that clause 10.1(a) does not, and was not intended to, impose any restriction upon the parties' rights to call or vote for a winding up of the scheme. It is submitted that this is consistent with the provision in clause 10.1(b) that, upon completion of a sale of the property, the responsible entity shall thereupon determine the Trust (unless otherwise directed by the unitholders), reflecting the situation in which the sale of the property precedes the winding up of the scheme and that the sale can be for part, not the whole of the property. It is submitted that clause 10.1(a) concerns not a winding up of the Trust or scheme pursuant to s 601NB but, rather, a sale prior to any winding up where the Trust or scheme is still operating in the usual course. The AMP entities contend that clauses 10.1(a) and (b) must be read together, and consistently, as both relating to this earlier period before winding up. 49Mr Cosgrave refers to other terms of the Joint Venture Agreement (namely, clauses 7.4 (a), (b) and (c), and items 4, 5 and 10 of Schedule 3; clause 8.2 concerning repairs and alterations to the property; and clause 9 concerning redevelopment and refurbishment of the property) as reinforcing the position that clause 10.1(a) is concerned only with a sale during the ongoing operation of the Trust. It is submitted for the AMP entities that these clauses reflect that, insofar as prescribed issues arise regarding the ongoing operation of the scheme, the property or the Trust's other assets, the unitholders exercise control over those matters. 50Reference was also made to the prohibition in clause 10.2 upon the responsible entity as trustee acquiring assets other than the property without the consent of (a majority of) unitholders as being consistent with the power of the unitholders in clause 10.1 to decide upon or choose the asset or assets constituting the scheme property while the Trust continues its operation in the ordinary course (in contradistinction to the position in the context of a winding up). It is submitted that if unitholders consider and vote upon an extraordinary resolution to wind up the scheme, then the Trust or scheme is not continuing to operate in the ordinary course but is to cease operation. 51Insofar as the AMP entities say that clause 10 applies only to the ongoing operation of the fund, Mr Jackman points out that clause 13(a) has the effect that there is an ongoing operation of the Joint Venture Agreement until the assets of the fund have been realised. Mr Jackman contends that clause 10 read as a whole contemplates that the winding up of the fund will occur after the sale (with written consent) and not that the sale will be effected as part of a winding up (since clause 10.1(b) provides that on completion of the sale the responsible entity will determine the trust). It is submitted that the present proposal reverses that in order to side-step the operation of clause 10.1(a). Reliance is also placed on clause 13.1(a) as reinforcing the argument that there cannot be a winding up generating a sale (because the agreement is to terminate on the later of the two events). 52It is submitted by Mr Jackman that where highly sophisticated parties have provided that there will not be a sale without consent, then that should be construed as meaning what it says and should cover circumstances where the sale occurs by way of a winding up. 53Pausing there, the suggestion that there could be no winding up of the scheme at all without the consent of all unitholders (because that might lead to a sale without the written consent of all of the unitholders) is one that has troubled me. Mr Jackman's response to that in oral submissions was to note that there is a statutory avenue under s 601ND under which interested parties can apply to have a court order a winding up and to refer to the other exit mechanisms available to a unitholder under the Joint Venture Agreement apart from winding up (such as clause 5 dealing with permitted transfers and clause 6 dealing with pre-emption rights). 54If clause 10.1(a), properly construed, operated to preclude a winding up of the scheme without the consent of all unitholders to the sale (because that would indirectly give rise to a sale without unanimous consent) whatever avenue were to be adopted to obtain a winding up order, so as to lock unitholders into the scheme, then I would have considered such a clause to be contrary to the legislative intent of ss 601NB and 601ND. (That said, I do not construe clause 10.1(a) as operating in its terms necessarily to preclude a sale occurring in the context of a winding up whether or not the clause applies during or after the ongoing operation of the scheme.) 55What Mr Jackman submits does not seem to me to go that far. He submits that the responsible entity could seek to have the Court exercise its discretionary power under s 601NF(2) to overcome a difficulty in the winding up of the scheme in the absence of consent to a sale of the property by all unitholders but that, otherwise, the unitholders cannot bring about a winding up by use of their voting rights without unanimous consent (my emphasis). 56As noted earlier, I think that there is force in the submission by Mr Cosgrave that had the parties intended to prohibit a unitholder from moving to wind up the scheme without the prior written consent of all the unitholders (assuming that such a prohibition would have been enforceable) then they could have done so. I do not read clause 10.1(a) as applying in the situation where the sale occurs as a consequence of a resolution for the winding up of the company (whether or not that occurs during the then ongoing operation of the Trust). 57Therefore, subject to consideration of the submission that Westfield's construction of clause 10.1(a) should be preferred as it would overcome an inconsistency with s 601NB (which I consider, and dismiss, later in these reasons), I would not construe clause 10.1(a) in isolation as extending in its terms to prohibit a sale by the responsible entity of the property in accordance with an obligation arising on a winding up of the scheme following a resolution by the members directing that the scheme be wound up. (That does not, however, determine the issue in favour of the AMP entities since it is necessary to consider the import of clause 16.2 in this context, which I do shortly.) * Meaning of "written consent of the Unitholders" 58Mr Cosgrave further submits in relation to clause 10.1 that there is nothing in the Joint Venture Agreement that indicates that the consent of unitholders in the context of clause 10.1 means their unanimous consent (i.e. the consent of all the unitholders) and that what clause 10.1 requires is the written consent of the majority of unitholders. I am unable to accept that submission. 59Apart from the fact that it leaves uncertain the question of what consent would be sufficient for the purposes of the clause (if something less than the consent of all unitholders were required), it seems to me to be inconsistent with the definition of "Unitholders" in the Joint Venture Agreement, as set out above. 60The term used in clause 10 (not just in 10.1(a) but also in 10.1(b) and 10.2) is "the Unitholders". That term is defined collectively to include the specifically named parties (while they, or in the case of UniSuper, it or the entity for which it was nominee, held units in the Trust) " and any other person who holds Units in the Trust from time to time" (my emphasis), not some or all of those unitholders as the case may be. Therefore, unless the context indicates that there should be a contrary interpretation, it seems to me to be clear that what is required by clause 10.1(a) is the written consent of all of the unitholders. 61Mr Cosgrave drew my attention to the fact that various provisions in the Joint Venture Agreement specifically stipulate that the consent or approval of all or each of the unitholders is necessary, noting that the word "all" does not appear in clause 10 (to suggest, as I understand it, that it could be inferred that in the absence of an indication of unanimity this was not required). 62So, for example, and without intending to be exhaustive, clause 9.2(a) refers to the requirement for the responsible entity to seek the consent of "each" unitholder in relation to recommendations for redevelopment and that "all" unitholders must advise of their consent or otherwise within a specified period; clauses 9.2(b) and (c) refers to the situation where "all" unitholders agree in relation to the redevelopment proposal (in contrast to sub-clause (d) which applies if unitholders holding not less than a stated percentage of units agree); clause 16.2 refers to "each and all" of the unitholders. Other clauses make it clear that what is being referred to is the position of each individual unitholder in a particular context (such as clause 12.5(e), which provides for the constitution by "each" unitholder of the responsible entity as its attorney for certain purposes, and clause 27, under which each unitholder indemnifies each other for certain purposes). 63There are other clauses which make clear that unanimous consent or approval is not necessary (by specifying the level of unitholder approval required) such as clause 8.2 (which deals with substantial repairs or alterations to the property and refers to "Unitholders holding not less than seventy-five percent (75%) of the Units in issue" determining that such repairs are to be carried out); clause 9.2(d) (which deals with redevelopments and refurbishments of the property and includes similar reference to unitholders holding not less than 75% of the units). 64Mr Cosgrave referred to clause 7.4(a) of the Joint Venture Agreement (providing that proposals and recommendations which relate to the acquisition or disposal of assets of the property were to be determined by the Unitholders' Committee) and noted that item 10 in schedule 2 of the Joint Venture Agreement provides that a valid resolution the Unitholders' Committee requires only a majority vote in excess of 50% of the total votes that may be cast. It was also noted that other matters to be determined by the Unitholders' Committee (see item 11 of Schedule 2) required a vote of not less than 75% of the total votes (including the substantial repairs and redevelopment/refurbishment works under clauses 8.2 and clause 9). (In that regard, Mr Jackman submitted that it would be an odd result if a 75% majority were required for discretionary repairs but an ordinary majority would suffice for the sale of the principal asset of the Trust, which the deed provides cannot be sold without unitholder consent. Mr Cosgrave submitted that there was no such incongruity since the former would require expenditure by unitholders and the latter would not.) 65Mr Cosgrave submits that it is telling that there is no reference in the Schedule to consent for the purposes of clause 10.1 (or otherwise for any sale or disposal of the property) requiring any special case beyond a simple majority. By contrast, he points to clause 13.1 as an example of the situation where the unanimous agreement of the unitholders is expressly required (namely, for termination of the Joint Venture Agreement). 66While on occasions in their agreement the parties have expressed that the consent or approval of each or all of the unitholders is required for particular matters under the Joint Venture Agreement (which I accept that this would strictly not be necessary if the term "the Unitholders" already meant all of them), they have also, where making provision for the consent or approval of only a percentage of the unitholders, expressly stipulated what level of consent was necessary (and have not made similar provision in clause 10). 67Further, as Mr Jackman noted, if the term "the Unitholders" in clause 10 does not mean all of them, then the application of that reasoning to clause 11 would have a surprising consequence. (Clause 11.1(b) of the Joint Venture Agreement, provides that (subject to clause 12), "the Unitholders" will share the cost of any valuations in accordance with their respective unitholding in the Trust" might then apply only to the majority of unitholders agreeing to such a valuation.) 68It is submitted by Mr Cosgrave that clause 13.1(a) (which expressly requires unanimous consent) reinforces the construction of clause 10.1 for which the AMP entities contend: namely, that (consistently with the Corporations Act ), only a majority unitholder vote is required to pass an extraordinary resolution which may have the effect of a sale in the context of winding up (just as it is submitted that a majority unitholding could provide the requisite consent under clause 10.1 to authorise a sale of the property or any substantial part thereof at any other time during the ongoing operation of the Trust). 69I have considerable difficulty with the submission that clause 10.1 should be construed as permitting the sale of the principal asset of the Trust by a simple majority. That is not stated in the clause (and a strict application of the definition of "Unitholders" would have the contrary result). It would have the effect that any protection a minority shareholder might (in my view reasonably) consider was conferred by clause 10.1 against the unilateral sale of the property which is the principal asset of the Trust would be illusory since the majority shareholder could decide at any time without consent to sell the property. That does not seem to me to be the objective intention conveyed by the words in clause 10.1. 70I construe the expression "written consent of the Unitholders" in clause 10.1(a) as meaning the written consent of all of the unitholders and not some unspecified proportion of them. * Operation of s 601NE 71In support of Westfield's construction of clause 10.1(a) of the Joint Venture Agreement, Mr Jackman submits that, if the contrary view were to be correct (and it does not preclude a sale indirectly through a winding up), then it would cause a difficulty for AMPCN in compliance with s 601NB (which requires that the responsible entity, upon the passing of an extraordinary resolution for winding up, wind up the scheme in accordance with its "constitution"). Mr Jackman submits that the constitution of the KSC Trust, for the purposes of s 601NB includes the Joint Venture Agreement and that the winding up of the Trust cannot be effected in accordance with the constitution without the consent to the sale of the property by all of the unitholders, by reference to clause 10 of the Joint Venture Agreement. 72For this submission, reliance is placed on the statutory requirements applicable in respect of a constitution of a registered managed investment scheme as provided by ss 601GA(1) and 601GB. Those sections provide: Section 601GA(1) (1) The constitution of a registered scheme must make adequate provision for: (a) the consideration that is to be paid to acquire an interest in the scheme; and (b) the powers of the responsible entity in relation to making investments of, or otherwise dealing with, scheme property; and (c) the method by which complaints made by members in relation to the scheme are to be dealt with; and (d) winding up the scheme. Section 601GB The constitution of a registered scheme must be contained in a document that is legally enforceable as between the members and the responsible entity. 73Mr Jackman submits that although s 601GB, referring to the form of the constitution, uses the words "a document", that cannot be taken to require the constitution to be in a single document (as opposed simply to requiring that the constitution be in written form), referring to the comments of Barrett J in ING Funds Management Limited v ANZ Nominees Limited (2009) 228 FLR 444; [2009] NSWSC 243 at [65]-[66]: The leading requirement as to the form of the constitution is s 601GB (see para [51] above). The constitution must be "contained in a document" that is "legally enforceable between the members and the responsible entity". It must follow from this that the method of effecting a modification chosen by the responsible entity when acting under s 601GC(1)(b) will be one that ensures that, after the modification, the constitution continues to be contained - and contained wholly - in a document of the s 601GB kind. The constitution in each of the cases before me is a deed executed and delivered by the responsible entity, its sole party. It is therefore a deed poll. That form was no doubt chosen as a means of satisfying the twofold requirement arising from s 601GB. The deed poll is acknowledged to be binding on the responsible entity in such a way that each member of the managed investment scheme for the time being may sue on the deed's covenants. Clause 25.4 of the constitution of the Enhanced Trust is in these terms: This constitution binds the Responsible Entity and each present and future Member and any person claiming through any of them in accordance with its terms (as amended from time to time) as if each of them had been a party to this constitution 74Mr Jackman further notes that ASIC's Regulatory Guide 134 ("Managed Investments: Constitutions"), at [134.4] contemplates that there can be amendments to a constitution, which it is submitted is consistent with the notion that the constitution need not be in a single document. It is submitted that a contrary construction would lead to absurd results where, as here, the original trust deed has been the subject of separate supplemental deeds. 75I accept that where a trust deed has been amended by successive written amending deeds (as is the case here) those deeds, read with the original deed, would together constitute the 'document' forming the constitution of a scheme. That is consistent with the requirement that modifications of the constitution are to be lodged with ASIC (s 601EC). However, that conclusion does not lead me to conclude that the Joint Venture Agreement forms part of the constitution of the Scheme. 76Mr Jackman places weight on what is required to be contained in the constitution of a registered scheme, including the investment powers of the respective entity (s 601GA(1)). Reference is made to clause 2 of the Joint Venture Agreement as an example of this. Mr Jackman notes that under the statute if the responsible entity is to have the power to borrow then there must be specific provision in the constitution of the Trust (s 601GA(3)) and that in this scheme the borrowing powers are identified in clause 2 of the Joint Venture Agreement (clause 18.4 of the Trust Deed making no reference to the content of the borrowing powers as required under the statute). That, it seems to me, goes to the question of the adequacy of the constitution (if that properly be seen as limited to the Trust Deed and amending deeds) not to the identification of the constitution per se. 77Mr Jackman contends that in the present case the Joint Venture Agreement is part of the scheme's constitution, together with the Trust Deed, since it is the paramount source of privately created rights governing the operation of the scheme, enforceable both between the members inter se and between each member and the responsible entity, as distinct from cases where there are bilateral contracts between the responsible entity and individual members - referring to Alpha Wealth Financial Services Pty Ltd v Frankland River Olive Co Ltd (2008) 66 ACSR 594 at [146]-[152]. There, Buss JA in the Court of Appeal in Western Australia referred to the earlier decision in Southern Wine Corporation Pty Ltd (in liq) v Frankland River Olive Co Ltd (2005) 31 WAR 162; [2005] WASCA 236 where it had been asserted that the scheme constitution and certain licence and management agreements had conferred an equitable charge over the proceeds of sale of a grape harvest securing payment of unpaid management fees. His Honour noted at [147] that in Southern Wine Corp , McLure JA (with whom Wheeler JA agreed) had observed (at [7]) that the Management Agreement formed part of the constitution. 78Buss JA noted that in the Southern Wine Corp case McLure JA had expressly proceeded on the basis that the facts pleaded in the statement of claim were true and hence that her Honour's observation at [7] to the effect that the 1999 licence and management agreements formed part of the 1998 constitution of the scheme (and her Honour's reference in that context to clause 1.4 of the constitution) may well have been no more than a recitation of an allegation made in the statement of claim, that observation appearing under the heading "Background" in her Honour's judgment. 79Buss JA further noted that the proper construction of clause 1.4 of the 1998 constitution was not apparently in issue in the appeal and not discussed elsewhere in her Honour's reasons and drew attention to the later statement by her Honour (at [23] that " the legal structure of the scheme is sourced in the constitution and the Management Agreement, both of which are contracts", as suggesting that the earlier observation at [7] was not a material part of her Honour's reasoning. His Honour indicated that had the observation formed part of the ratio decidendi of the case (which he did not consider to be the case) he would not have followed it (thus indicating a view that the licence and management agreements were not part of the constitution). 80Mr Jackman nevertheless notes that neither Alpha Wealth nor Southern Wine Corp was a case involving a joint venture agreement between all of the members and the responsible entity that, in its terms, "sits above" the Trust Deed. 81I note that in Ford's Principles of Corporations Law , at [22.505] the view is expressed that: The constitution of a registered scheme must be contained in a document that is legally enforceable as between the members and the responsible entity: 601GB. A trust instrument would fit this description, but a series of investment contracts between the responsible entity and each investor would not, because while each investment contract would be enforceable by and against the responsible entity they would be enforceable by and against the responsible entity they would not separately or together amount to "the constitution of the registered scheme". 82I also note that ASIC in its Regulatory Guide notes at RG 134.26A that: Incorporation by reference A provision that allows provisions in another document to override the terms of the constitution prevents the provisions of the constitution that deal with the matters in s 601GA and 601GB from being adequate because they are not certain and complete. That type of provision may require a reader to consider material which is extrinsic to the constitution itself and avoid the requirements for amendments to the constitution. The Law would not permit us to register a scheme if its constitution has this type of provision. 83There is no suggestion that the Joint Venture Agreement has been lodged with ASIC as part of the constitution of this scheme (as would be required under s 601EA(4)(a) if it did form part of the constitution). Further, if the agreement formed part of the constitution of the scheme then one would think there would be no need for an incoming unitholder contractually to agree to assume the obligations provided thereunder or to accede to its terms. 84I accept that, as noted in Australian Corporation Law Principles and Practice at [7.12.0070], though in many cases the scheme constitution will take the form of a trust deed this is not essential and that "a constitution could, for instance, comprise a contract or combination of contracts, subject only to the obligation of the responsible entity to hold scheme property on trust for scheme members" (reference there being made to s 601FC(2) of the Corporations Act ). Here, however, the Joint Venture Agreement in its terms does not purport to form part of the scheme's constitution (but merely to record arrangements between the Unitholders, as defined, in relation to the Trust). Given that the Joint Venture Agreement seems to have been prepared by experienced commercial lawyers, I would have expected that the document would make clear if it was to form part of the constitution of the Trust. It does not. 85I do not consider that the Joint Venture Agreement forms part of the constitution of the Trust in this case. Therefore, the support sought to be drawn for Westfield's position by reference to the status of the Joint Venture Agreement does not arise. 86Had I been otherwise convinced, then the argument put forward by Mr Jackman was that the requirement in s 601NE for the responsible entity to wind up the scheme "in accordance with the constitution" would require that the KSC Trust be wound up not only in accordance with the Trust Deed but also in accordance with the Joint Venture Agreement, including clause 10, and that clause 10 would not permit a sale, even in a winding up, without the written consent of all unitholders. Thus, it was submitted that any winding up pursuant to the resolution would be unworkable (as Westfield will not consent to the sale) and that the only way to resolve that difficulty would be for the responsible entity to make an application as to how to effect the sale in the absence of unanimous unitholder consent. 87In written submissions the argument was put by Mr Jackman that it was unlikely to have been intended by the parties that the efficacy of a winding up would be left to rest on the favourable exercise of the Court's discretion to make orders effectively overriding the Joint Venture Agreement (insofar as that operated as part of the constitution of the scheme), pointing to s 601GA(l)(d) which requires the constitution adequately to deal with the winding up of the scheme. Mr Jackman submits that the perceived difficulty of the efficacy of a winding up being left to the discretion of the Court suggests that it was intended that clause 10 would operate at an antecedent point, in conjunction with clause 16.2, to preclude any unitholder from voting in favour of a winding up resolution pursuant to s 601NB, without the prior written consent of other unitholders to a sale of the shopping centre. 88Mr Cosgrave accepts that once a winding up resolution is passed the responsible entity is under a statutory obligation to ensure that the Trust or scheme is wound up in accordance with both its constitution (though he does not accept that constitution for this purpose includes the Joint Venture Agreement) and any orders under sub-s 601NF(2) of the Act. What is not accepted is that there is any discretionary power conferred by that sub-section in the sense of a discretion as to whether or not to order a winding up. It is submitted that the terms of sub-s 601NF(2) make it apparent that any directions of the Court under that subsection are administrative only (i.e., how, and not whether, a scheme is to be wound up). The reference in s 601NE to the scheme being wound up "in accordance with its constitution and any orders under subsection 601NF(2)" is similarly submitted by Mr Cosgrave to qualify only the mechanics of implementing a winding up, not the circumstances in which a winding up may be implemented. 89Austin & Black , at [5C.601NA] note that In Re Stacks Managed Investments Ltd (2005) 219 ALR 532, White J considered that this section authorises the making of directions of a kind which would be made in an administration suit for the purpose of settling the entitlements of members, but does not authorise the court to confer additional powers upon a responsible entity to which third parties would be made subject or otherwise interfere with third party rights. 90As I understand it, what was being submitted in this regard by Mr Jackman was that if the resolution for a winding up were to be passed then it would be open to Westfield to seek an order that the sale of the property as part of the winding up of the trust be subject to directions to preserve the requirement for its consent (assuming that such a requirement applied to a sale on the winding up of the scheme). In light of what was said in Re Stacks case, there must be some doubt as to the scope of any directions that might be made in this regard. However, in view of my finding as to what constitutes the "constitution" of the scheme, this issue may not arise in a practical sense and I do not need to consider that further. * Operation of clause 16.2 91The principal argument put forward by Westfield as to the prohibition on AMPCN voting for the proposed resolution does not rest on the construction of clause 10.1(a) alone. Rather, what is submitted (and for the reasons set out below I consider it has great force) is that the effect of clause 16.2 is to preclude AMPCN from voting (or UniSuper directing it to vote) in favour of a resolution to wind up the scheme if, by so doing, this would cause there to be a sale of the property without Westfield's consent (on the basis that to do so would be contrary to the intent of clause 10.1(1)(a).) 92I have set out the terms of clause 16.2 above. It is not suggested that this does not bind AMPCN. However, it is suggested that it does not prohibit AMPCN from voting on the proposed resolution for two reasons. 93First, it is submitted by Mr Cosgrave that clause 16.2 applies only to the ongoing operation of the Trust when it is concerned with the management of the property. Mr Cosgrave submits that it is appropriate in that context that the unitholders exercise their rights and powers as unitholders under the Trust Deed , including their voting rights, fully and completely to give effect to the intent and provisions of the Joint Venture Agreement (referring in particular to the matters addressed in clauses 7, 8, 9 and 10 of the Joint Venture Agreement). 94As to the first argument, until such time as the resolution is considered (and carried), there is no suggestion that the Trust or the scheme is not ongoing. Therefore, I see no reason why clause 16.2 should not be operative as at that stage. 95Secondly, it is submitted by Mr Cosgrave that the terms of clause 16.2 of the Joint Venture Agreement themselves make clear (insofar as they refer to voting rights "as unitholders under the Trust Deed ") that there is no restriction on voting rights that unitholders have rights under the Act (and in this context, relevantly, under s 601NB) as opposed to rights under the Trust Deed itself, those statutory rights being exercisable by each unitholder as it sees fit. 96Mr Jackman contends, to the contrary, that in the phrase "exercise their respective voting rights as unitholders under the Trust Deed", the words "under the Trust Deed" must be construed as qualifying the words "as unitholders" (i.e., as identifying the capacity in which unitholders are voting) rather than as qualifying the words "voting rights" (i.e., as meaning that the clause only applies to impose a duty of this kind where what are being exercised are voting rights for which provision is made under the Trust Deed). He makes this submission on the basis that there are no particular voting rights conferred under the Trust Deed; the only relevant voting rights being said to be those conferred by the statute (under s 253 of the Corporations Act ). 97Mr Cosgrave took issue with the suggestion that there are no voting rights conferred under the Trust Deed. He referred me to clause 20.1 (though in terms that refers to the manner of exercise of voting rights conferred by the investments of the Fund, not the conferral of rights under the Trust Deed itself) and (though this was not pressed) to clause 31.6 (which refers to a resolution binding unitholders or a class of unitholders in the circumstances of that clause whether or not they voted therefor but does not itself confer any voting rights as such). Reference was also made to the definition of special resolution, which does not seem to me to assist the argument. None of those provisions appears to confer voting power or voting rights under the Trust Deed itself. The only conferral of voting rights, as such, is derived from the statute, as Mr Jackman submits. 98Mr Jackman also refers in support of his construction of clause 16.2 to clause 12.4 of the Joint Venture Agreement, which also refers to "voting right as a unitholder under the trust deed". It is said that if the construction for which the AMP entities contend were to be correct then a unitholder in default would have no statutory voting rights, which it is said cannot have been intended. 99I raised in submissions the question whether there was a relevant distinction in this regard between the use of the term "unitholder" in the Joint Venture Agreement with a capital "U" (that being the most common manifestation of the term) and where it appears wholly in lower case (as in clause 16.2). It was not suggested that there was. Nevertheless, it is fair to say that, generally speaking, the use of the word unitholder in the Joint Venture Agreement is in the capitalised form. Where there are exceptions thereto (leaving aside clauses 12.4 and 16.2 for the moment), the reference seems to be to a generic unitholder (i.e. not one of the parties to the Agreement or one that may at the relevant time hold units so as to be within the definition of Unitholder, as capitalised). 100I refer to clause 4.1, which uses the words "such unitholder" in the context of a provision dealing with the requirement for the assumption (by a mortgagee, chargee or encumbrancee of units or any interest therein) of the obligations of "such unitholder" (i.e. the mortgagor charger or party so encumbering its units) and clause 5.1, in which in the context of the required terms of any approved transfer there is a proviso that if, in relation to "any unitholder under the Trust Deed" falling within certain described categories, the factual basis for that categorisation ceases, then there is an obligation to notify the other parties and re-transfer the units and "the failure of a unitholder to re-transfer" in those circumstances shall be deemed to be an un-remedied default). These clauses seem to me to use the word in a generic sense. 101Turning then to the use of the word in clauses12.4 and 16.2, the lower case "unitholder" appears in the context of a phrase referring to the exercise of its or their voting right(s) ("as a unitholder under the Trust Deed" (in 12.4) or "as unitholders under the Trust Deed" (in 16.2)). This suggests to me that use of the term in the expression in clause 16.2 was (in a manner not dissimilar to the use in the clauses referred to above) intended to refer to the capacity of the entity exercising the voting rights and not the source of those rights. That would fit with the linguistic construction of the phrase, insofar as the words "under the Trust Deed" would ordinarily be read as qualifying the immediately preceding words. 102I have set out earlier the definition of "Unitholder" in the Joint Venture Agreement. Had the expression "as unitholders under the Trust Deed" in clause 16.2 simply meant someone who holds units in the Trust, then it might well be thought that this was tautologous, there being no need to add that qualification having regard to the definition of Unitholder (since the only entities falling within that description necessarily hold units in the Trust). However, in the absence of specific voting powers under the Trust Deed it is difficult to see what meaning can be given to the relevant words in clause 16.2 if the clause is not intended to apply to the exercise of voting rights by Unitholders in their capacity as unitholders of the Trust, irrespective of whence those voting rights might derive (including, therefore, their statutory voting rights provided those rights are conferred on them as a member of the scheme). I am conscious of the need to ascribe some meaning to a term of the agreement in this regard. 103The construction for which Mr Jackman contends is one that could be seen as having had some practical operation (at least at the time that the responsible entity also held units in the Trust) because it would then extend to the exercise by the responsible entity of voting rights held in its capacity as a unitholder but not in its capacity as responsible entity (AMPCI at that stage having entered into the deed in both capacities). 104I consider that in order to give a meaningful operation to the words in question (and the clause itself) it is necessary to construe clause 16.2 as constituting (and I so construe it as) an agreement by each of the Unitholders (as defined) that it will exercise whatever voting rights it has in its capacity as a holder of units in the KSC Trust (including its statutory voting rights) in the manner required by that clause (i.e. so as most fully and completely to give effect to the intent and effect of the provisions of the Joint Venture Agreement). 105The consequence of that finding is that there is a contractual obligation on AMPCN, when exercising voting rights in relation to the proposed resolution, (and UniSuper, when directing the exercise by AMPCN of such voting rights on its behalf) to do so in a manner that will give full and complete effect to the intent of clause 10.1(a). 106I consider that if AMPCN were to vote (as UniSuper's nominee) in favour of the winding up resolution, knowing that it will require a sale of the property and that Westfield has not given its written consent thereto, then it (and UniSuper) will be in breach of that contractual obligation. AMPCN (and UniSuper) must be taken to intend the natural consequences of its (and their) actions. The AMP entities, and UniSuper, are well aware of Westfield's position in relation to a sale of the property (if by no other means than the present litigation). Unless the resolution for winding up were to address the requirement for Westfield's consent to a sale in the context of the termination of the Trust, it must be inferred that AMPCN and UniSuper are willing to allow the responsible entity to proceed in accordance with a direction that will have the effect of causing a sale in breach of the intent of clause 10.1(a). I consider that they would then be liable in damages to Westfield for any loss suffered as a result. 107Does that mean, however, that the injunctive relief as sought should be granted? (ii) Effectiveness of Joint Venture Agreement if it restricts UniSuper's right to seek a winding up under s 601NB. 108The AMP entities contend, further or in the alternative to their submissions as to the construction of clause 10.1 of the Joint Venture Agreement, that the statutory right to seek a winding up order under s 601NB overrides any inconsistent obligation or limitation on the power imposed under the Joint Venture Agreement (and, in the alternative, that if such an inconsistent obligation or limitation can be effective to override a unitholder's right to seek a winding up then it must be expressed in the clearest of words and that clause 10 is not so expressed). Reference is made to clause 18 of the Joint Venture Agreement, which provides that the rights, powers and remedies provided in the deed are cumulative with and not exclusive of the rights, powers or remedies provided by law independently of the deed. Accordingly, it is submitted that the rights, powers and remedies of a unitholder under the Joint Venture Agreement are not exclusive of the right or power granted by s 601NB of the Act and hence that provision applies without exclusion. The AMP entities' position is thus that they do not concede that the Joint Venture Agreement is part of the scheme's constitution but that, even if that were to be so, the statutory provisions would prevail. 109It is submitted by Mr Cosgrave that Westfield's position is incompatible with the clear legislative intention that the winding up or continuing existence of the Trust is to be effected by the responsible entity as determined by those members holding at least 50% of the units in the Trust. 110It is noted by Mr Cosgrave that s 601FC(l)(m) of the Corporations Act provides that in exercising its powers and carrying out its duties, the responsible entity of a registered scheme must carry out or comply with any other duty, not inconsistent with the Act , that is conferred on the responsible entity by the scheme's constitution. Thus, it is said, the responsible entity may properly carry out or comply with other duties conferred upon it by the scheme's constitution provided those duties are not inconsistent with the Corporations Act . 111It is submitted by Mr Cosgrave that the Westfield contention creates a duty which is inconsistent with the Act to the extent that it creates a fetter, or imposes a condition which does not appear in the Act (namely, that the responsible entity cannot conduct the winding up of the scheme under s 601NE without the approval of both unitholders because such unanimous approval is said to be necessary in order lawfully to consider and vote upon the extraordinary resolution for winding up contemplated by s 601NB). 112Both parties rely upon the scope and policy of the Act in support of their respective positions. 113Paragraph 8.11 of the Explanatory Memorandum for the introduction of Chapter 5C of the Act regarding managed investment schemes stated that " ... the responsible entity will be under a duty to carry out any other duty conferred on it by the scheme's constitution so long as that duty is not inconsistent with the law (proposed paragraph 601FC(l)(m))". 114The Explanatory Memorandum also noted at paragraph 9.2 that: A scheme's constitution will be able to include any other matters that are not inconsistent with the statutory requirements. 115Mr Cosgrave notes that the primacy of the Corporations Act over contractual provisions (and over provisions of a scheme constitution) was explicitly recognised (albeit in relation to specific provisions and not as a general matter) by Austin J in MTM Funds Management Ltd v Cavalane Holdings Pty Ltd (2000) 158 FLR 151, where his Honour said at [45]: Specific provisions of a constitution may be overridden -for example, a provision in the constitution of an unlisted registered scheme providing for removal of responsible entity by ordinary or special resolution would be ineffective because s 601FM(1) requires the resolution to be an extraordinary resolution - but unless the relevant constitutional provision is in conflict with and therefore not in accordance with a provision of Div 2 of Pt 5C.2, it should be allowed to operate. 116Mr Jackman notes that there is nothing objectionable about unitholders (or company members) entering into voting agreements (citing Austin & Black's Annotations to the Corporations Act and Puddephatt v Leith [1916] 1 Ch 200, where the court granted a prohibitive injunction restraining the mortgagee from voting contrary to the mortgagor's directions which he had contractually agreed to follow as well as a mandatory injunction requiring the mortgagee in future to vote in accordance with those directions for so long as the mortgagor had an equity of redemption). Mr Jackman submits that whether one can contract out of, or limit by contract, a statutory right, hinges on the scope and policy of the particular statute (citing Admiralty Commissioners v Valverda (Owners) [1938] AC 173 at [185]). The critical question is said to be whether the benefit conferred is personal or private on the one hand, or whether it rests upon public policy or expediency on the other hand (citing Brown v R (1986) 160 CLR 171 at [208]; and Commonwealth of Australia v Verwayen (1990) 170 CLR 394 at [456] per Dawson J). 117In Brown , Dawson J said (at p 208): ...it is necessary to recognize the authority which is to be found in the cases supporting the right of waiver by a person of a statutory requirement which exists for its benefit. Examples are to be found in the waiver of such matters as a period of limitation or a requirement that notice be given of some matter. The benefit must, however, be a personal or private one and must not rest upon public policy or expediency: Great Eastern Railway Co v Goldsmid; Wilson v McIntosh; Toronto Corporation v Russell; Equitable Life Assurance Society of the United States v Reed; Davies v Davies. 118In Verwayen , his Honour reiterated this (at p 456): It is commonly said that a person may waive a statutory right in the sense of not relying upon it. In order to waive a statutory right in this way, it must be a personal or private right and must not rest upon public policy or expediency: see Brown v The Queen. 119Mr Jackman submits that in this case, the joint venture partners have contracted out of the right unilaterally to obtain a winding up of the KSC Trust by extraordinary resolution without the written consent of the other unitholders to the sale of the property; and that there is nothing inherently objectionable in so doing. He submits that the rights conferred by s 601NE on the unitholders are personal or private in the requisite sense and do not rest upon some notion of public policy that would lead to a conclusion that they cannot be excluded or restricted by contract. 120By way of example, Mr Jackman suggests that there would be nothing objectionable in a situation where, by contract, all unitholders of a particular managed investment scheme could agree to sell their units and not voluntarily to wind up the scheme pending sale (even though this would effectively oust the statutory rights of members under s 601NB and S 601NE). Further, it is submitted that there is nothing express or implicit in the Act or s 601NB that would prohibit a unitholder contracting to fetter or exclude its otherwise unrestricted rights to seek a winding up of the Trust under s 601NB 121Mr Cosgrave also takes issue with the notion that there is no relevantly applicable notion of public policy. It is submitted that if Westfield's arguments were to be accepted, the same logic would have to apply to all managed investment schemes and that schemes with hundreds or thousands of members (including unsophisticated retail investors) would be permitted contractually to exclude or limit the rights of members to vote for the scheme to be wound up. It is said that this highlights the public policy consideration telling in favour of s 601NB being applied according to its terms (notwithstanding any purported contractual ouster). 122To the extent that what is submitted is that it is open to the parties to a registered managed investment scheme contractually to fetter their statutory right to seek a winding up of the scheme in all circumstances (so as, for example, by agreement to bind themselves not to take any steps to achieve the winding up of the scheme at all (whether under a resolution exercising the power under s 601NB or the right to make an application for the winding up of the scheme on the just and equitable ground under s 601ND(1)) otherwise than with the consent of all unitholders, then I would have a difficulty in accepting that this was no more than a waiver of a personal right and that such an agreement did not offend the public policy which I would perceive to be underlying the winding up provisions in the Corporations Act (namely to facilitate the winding up by members of a scheme in circumstances that could include insolvency or a deadlock between members or the like). 123In Re Stacks , White J noted that the nature of the winding up process differs depending on what it is that is being wound up and that the winding up of a registered managed investment scheme is a different matter from the winding up of a company. 124It is difficult to see that there would not, for example, be a public policy interest in some circumstances in the winding up of a scheme of this kind (such as in cases of insolvency) akin to the public policy identified in Bidald Consulting Pty Ltd v Miles Special Builders Pty Ltd [2005] NSWSC 1235; (2005) 226 ALR 510 in relation to insolvent companies. Insofar as the authorities in relation to the winding up of corporations on the just and equitable ground inform the application of s 601ND(1)(a) (as was noted in Capelli v Shepard (2010) 77 ACSR 35), this must similarly be so. I hasten to add that there is no suggestion that the present scheme is insolvent, but use this as an example to indicate that there appear to be public policy considerations that would tend against the enforcement of unqualified fetters on the ability of the members in all circumstances seeking the winding up of such a scheme. However, there may be circumstances (as alluded to in the examples given by Mr Jackman) where there would be nothing offensive to public policy in a contractual agreement not to wind up the scheme for a certain period or until the happening of a certain event (and this seems to be permitted in a scheme's constitution). 125As noted earlier, I was troubled by the suggestion that members of a scheme could contractually preclude themselves from moving to wind up the scheme without unanimous consent in all circumstances (so as to lock them into the continuing participation in a scheme against their will) even though I note that there are other means by which they could exit from their investment in the present scheme. Nevertheless, to recognise that it may be permissible to fetter one's voting rights as a member of a scheme (or, for that matter, to defer the exercise of those rights until the happening of a particular event) is not the same as rendering the ability to proceed to a winding up of the scheme in all circumstances as dependent on the consent of all unitholders to the sale of a particular asset (particularly where there are other means by which a winding up could be sought). 126Furthermore, a contractual provision as such does not in my view override the statutory right in the sense that the member does not lose that right (the member may simply have bound itself in some circumstances not to exercise it). In Cordiant Communications (Australia) Pty Ltd v The Communications Group Holdings Pty Ltd [2005] NSWSC 1005, Palmer J expressed the view (albeit in the different context of a shareholder voting at a meeting in breach of an agreement to grant an irrevocable power of attorney to permit another entity to cast its vote) that the power of exercising a statutory right was not lost by a wrong done in connection with that right (there, the wrong being the commission of a breach of a contractual provision not to exercise it), citing Lord Bramwell in Hooper v Lane (1859) 6 HL Cas 443; (1850) 10 ER 1368). His Honour did, however, restrain an apprehended further breach of the contractual provision noting that agreements as to how the votes of a shareholder would be exercised in a certain eventuality were not uncommon and that there was no obstacle in principle in enforcing them by the remedies of specific performance and injunction (at [162]). His Honour did not consider that the case before him was one where the party with the benefit of the contractual covenant should be left to a remedy in damages if there were to be a further breach of the contract. 127Here, the position is that there is no general restraint on a member applying to wind up the scheme (given my construction of clause 10.1(a) as not, in its terms, precluding an indirect sale on a winding up in accordance with a s 601NB resolution pursuant to s 601 NE). What there is, however, is a contractual requirement for unitholders to exercise voting rights (at, say, a meeting called to consider a resolution pursuant to s 601NB) in such a manner as to give full and complete effect to the intent of clause 10.1(a). There is no restriction on the unitholder moving to wind up the scheme in a manner that does not involve the exercise of voting rights. 128Accordingly, I do not consider it to be contrary to public policy to enjoin AMPCN (and UniSuper) from an apprehended breach of clause 16.2 in this context. I consider it likely that damages would be an inadequate remedy (since the quantification of damages would depend on an assessment of what would have been the position had the voting rights not been exercised and in those circumstances, there might be a question as to what other courses would have been open and/or taken by the AMP entities to wind up the scheme or exit from their investment in the scheme). 129I do not consider that this will have the 'floodgates' effect feared by Mr Cosgrave. This is a position where there are only two (commercially sophisticated) members of the registered scheme. I am not satisfied that, as a matter of public policy, an agreement by a member of such a scheme broadly to fetter its voting rights in this way (which may affect only one of the ways in which it would be open to that member to seek to have the scheme wound up) is one that should not be enforced by way of injunction (rather than to be left to be dealt with by an order for damages). 130Recently, in a different context (in Seven Network (Operations) Ltd and Ors v James Warburton (No 2) [2011] NSWSC 386), Pembroke J has emphasised the legitimate interest of contracting parties in having the terms of their contract enforced. His Honour noted at [3] that: One of the abiding principles of a civilised system of law such as ours is that contracts are meant to be observed. Lawyers sometimes use the Latin phrase pacta sunt servanda to describe the principle. We make decisions on the assumption that contractual obligations will generally be performed and solemn commitments will not be ignored. The general policy of the law is that people should honour their contracts: Baltic Shipping Co v Dillon (1991) 22 NSWLR 1 at 9 (Gleeson CJ). If there were not adherence to such a principle, the conduct of private and commercial affairs would become an uncertain jumble. 131I share that view. Here, the difficulty in quantifying damages for a breach of clause 16.2 in the present case would seem to be in assessing what position Westfield would have been in had AMPCN (and/or UniSuper) complied with the restrictions placed upon the exercise of voting rights in the circumstances at hand (compared with the position in which it will be if the resolution is passed in breach of clause 16.2). That would require an assumption to be made as to what would then have transpired - which might be that the scheme would have continued (and the property not sold) or that UniSuper, through AMPCN, would seek to effect a winding up of the scheme by other means (not requiring the use of voting rights) or would seek to exit from its investment in the fund in a different way. Conclusion 132For the reasons set out above, I am of the view that, properly construed, clause 16.2 of the Joint Venture Agreement applies in the present circumstances such that if a unitholder (in this case AMPCN at the direction of UniSuper) chooses to exercise its statutory right to seek a winding up of the Trust or the scheme pursuant to s 601NB of the Corporations Act , in circumstances where a winding up will cause a sale of the property to be effected by the responsible entity without the prior written consent of all the shareholders, that will amount to a breach of the obligation under clause 16.2 to exercise its voting rights so as more fully and completely to give effect to the provisions of the Joint Venture Agreement (here, the relevant provision being clause 10.1). I do not consider that this obligation is overridden by s 601 of the Corporations Act . The statutory right remains. It is simply a situation where (as a practical consequence of clause 16.2) an exercise of that right would amount to a breach of contract. I am not persuaded that in the circumstances of the present case (though that might not be the same in all cases involving members of a registered managed investment scheme such as this), there is a public policy reason not to enforce the relevant covenant in the Joint Venture Agreement. I consider, however, that the injunctive relief should be limited to the form of the restraint sought in paragraph 1(a) of the summons as it seems to me that the second paragraph is too broad (having regard to the fact that the circumstances in which a future resolution of this kind might be put to a meeting of the unitholders are not presently known and may not arise). Orders 133Therefore, I order as follows: The first and second defendants be restrained from voting for the extraordinary resolution notified pursuant to the notice dated 10 August 2011 to wind up the KSC Trust pursuant to s 601NB and 601NE of the Corporations Act 2001 (Cth) without the prior written consent of the plaintiff to the sale of the Property, as defined, of the Trust. 134I will hear any submissions as to costs. ********** 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: 01 September 2011