Huntley Management Limited v Timbercorp Securities Limited [2010] FCA 576

Huntley Management Limited v Timbercorp Securities Limited [2010] FCA 576

The constitution, leases and three investor agreements were integral to the managed investment schemes and Timbercorp's rights, obligations and liabilities under them, although often expressed to be held or assumed "in its personal capacity", were rights, obligations and liabilities of the former responsible entity in relation to the scheme. Giving ss 601FS and 601FT a broad, purposive construction to facilitate a seamless change of responsible entity, those rights, obligations and liabilities were novated to Huntley when it was recorded by ASIC as the new responsible entity, except to the extent preserved for Timbercorp by ss 601FS(2) and 601FT(2).

Jurisdiction
Australia
Judgment Date
08 June 2010
Procedural Posture
Corporations Proceeding Concerning Managed Investment Schemes and Change of Responsible Entity / Reasons for Judgment on Application; Matter Stood Over for Proposed Orders and Costs Submissions
Outcome
Huntley was held entitled to declarations that Timbercorp's rights, obligations and liabilities under the constitution, leases and three investor agreements became Huntley's, subject to ss 601FS(2) and 601FT(2); final orders were deferred.
Legal Topics
['change of Responsible Entity' 'statutory Novation' 'rights, Obligations and Liabilities of Former Responsible Entity' 'meaning of "in Relation to the Scheme"' 'construction of Agreements Expressed to Be in Personal Capacity' 'scheme Property']
['corporations' 'statutory Interpretation' 'contracts' 'managed Investment Schemes'] ['change of Responsible Entity' 'statutory Novation' 'rights, Obligations and Liabilities of Former Responsible Entity' 'meaning of "in Relation to the Scheme"' 'construction of Agreements Expressed to Be in Personal Capacity' 'scheme Property']

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Procedural Posture

Corporations Proceeding Concerning Managed Investment Schemes and Change of Responsible Entity / Reasons for Judgment on Application; Matter Stood Over for Proposed Orders and Costs Submissions

Legal Issues

  1. 1 ['Whether rights, obligations and liabilities in agreements with investors and third parties expressed to be held by Timbercorp "in its personal capacity" were rights, obligations and liabilities of the former responsible entity in relation to the scheme within ss 601FS(1) and 601FT(1) of the Corporations Act 2001 (Cth).' 'Whether ss 601FS and 601FT of the Corporations Act 2001 (Cth) effect a statutory novation enabling the new responsible entity to step into the shoes of the former responsible entity.' 'Whether Timbercorp retained leasehold and contractual rights after removal as responsible entity because documents characterised those rights as held in its personal capacity.']

Ratio Decidendi

The constitution, leases and three investor agreements were integral to the managed investment schemes and Timbercorp's rights, obligations and liabilities under them, although often expressed to be held or assumed "in its personal capacity", were rights, obligations and liabilities of the former responsible entity in relation to the scheme. Giving ss 601FS and 601FT a broad, purposive construction to facilitate a seamless change of responsible entity, those rights, obligations and liabilities were novated to Huntley when it was recorded by ASIC as the new responsible entity, except to the extent preserved for Timbercorp by ss 601FS(2) and 601FT(2).

Court Disposition

Huntley was held entitled to declarations that Timbercorp's rights, obligations and liabilities under the constitution, leases and three investor agreements became Huntley's, subject to ss 601FS(2) and 601FT(2); final orders were deferred.

Orders

  • ['On or before 15 June 2010, the parties provide to the associate to Rares J agreed proposed orders giving effect to the reasons published today and in default of agreement, their own drafts with the areas of disagreement identified.' 'On or before 15 June 2010, the parties exchange and provide to the associate to...