In the matter of Centro Retail Limited and Centro MCS Manager Limited in its capacity as Responsible Entity of Centro Retail Trust [2011] NSWSC 1175

In the matter of Centro Retail Limited and Centro MCS Manager Limited in its capacity as Responsible Entity of Centro Retail Trust [2011] NSWSC 1175

The proposed modification allowing a single issue of Centro Retail Trust units at the Aggregation Issue Price did not affect members' rights within s 601GC(1)(b), because members had no relevant right to insist that the scheme continue to be administered under the existing issue-price provisions or that their proportionate economic participation remain undiluted. The responsible entity had actually and reasonably formed the view that members' rights would not be adversely affected. As trustee, it also considered benefit to beneficiaries on relevant material, including expert opinions that the aggregation transaction would increase value and that benefits clearly outweighed disadvantages,...

Jurisdiction
Australia
Judgment Date
05 October 2011
Procedural Posture
Application Under S 63 of the Trustee Act 1925 for Judicial Advice; Equity Division Corporations List / Interlocutory Applications
Outcome
Judicial advice granted that the applicant would be justified in modifying the constitution of the Centro Retail Trust under s 601GC(1)(b) of the Corporations Act 2001 (Cth).
Legal Topics
['modification of Constitution of Registered Scheme Under S 601 Gc(1) of the Corporations Act 2001 (cth)' "meaning of Members' Rights" 'responsible Entity Duties as Trustee' 'issue Price for Units' 'judicial Advice Under S 63 of the Trustee Act 1925']
['corporations' 'managed Investment Schemes' 'trusts and Equity'] ['modification of Constitution of Registered Scheme Under S 601 Gc(1) of the Corporations Act 2001 (cth)' "meaning of Members' Rights" 'responsible Entity Duties as Trustee' 'issue Price for Units' 'judicial Advice Under S 63 of the Trustee Act 1925']

Case Brief

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Procedural Posture

Application Under S 63 of the Trustee Act 1925 for Judicial Advice; Equity Division Corporations List / Interlocutory Applications

Legal Issues

  1. 1 ['Whether the responsible entity of the Centro Retail Trust would be justified in modifying the constitution under s 601GC(1)(b) without a special resolution of members.' "Whether the proposed modification allowing a single issue of units at the Aggregation Issue Price would affect or adversely affect members' rights." "Whether members' rights include a right to have the scheme administered according to the existing constitution and not otherwise." 'Whether the responsible entity, as trustee, had to consider whether exercise of the modification power would benefit beneficiaries, including the possibility of dilution.' 'Whether earlier announcements proposing use of s 601GC(1)(a) impeded later reliance on s 601GC(1)(b).']

Ratio Decidendi

The proposed modification allowing a single issue of Centro Retail Trust units at the Aggregation Issue Price did not affect members' rights within s 601GC(1)(b), because members had no relevant right to insist that the scheme continue to be administered under the existing issue-price provisions or that their proportionate economic participation remain undiluted. The responsible entity had actually and reasonably formed the view that members' rights would not be adversely affected. As trustee, it also considered benefit to beneficiaries on relevant material, including expert opinions that the aggregation transaction would increase value and that benefits clearly outweighed disadvantages,...

Court Disposition

Judicial advice granted that the applicant would be justified in modifying the constitution of the Centro Retail Trust under s 601GC(1)(b) of the Corporations Act 2001 (Cth).

Orders

  • ['Judicial advice that the applicant, as responsible entity of the Centro Retail Trust, would be justified in modifying the constitution of the Centro Retail Trust under s 601GC(1)(b) of the Corporations Act 2001 (Cth) in accordance with the proposed amending deed at tab 5 of exhibit MDB1 to the second affidavit of...