City Pacific Limited, in the matter of; City Pacific Limited ACN 079 453 955 v Bacon (No 2) [2009] FCA 772

City Pacific Limited, in the matter of; City Pacific Limited ACN 079 453 955 v Bacon (No 2) [2009] FCA 772

Section 601FM does not require two separate votes for removal and replacement of a responsible entity; a single resolution effecting both decisions is valid provided it addresses both matters and is supported by an extraordinary resolution. Even if two separate votes are required, the failure to conduct them is a procedural irregularity cured by s 1322(2) since no substantial injustice occurred. If s 1322(2) does not operate, s 1322(4) enables the Court to validate the resolution and no evidence shows a different result would have been reached or that injustice would occur.

Parties
First Plaintiff: City Pacific Limited ACN 079 453 955 as the responsible entity for the City Pacific First Mortgage Fund ARSN 088 139 477; Second Plaintiff: City Pacific Limited ACN 079 453 955 as the responsible entity for the City Pacific Income Fund; First Defendant: Rodger Bacon (as agent for the "requisitioning members"); Second Defendant: Trilogy Funds Management Limited ACN 080 383 679; Third Defendant: Balmain NB Corporation Limited ACN 107 505 760; Fourth Defendant: Those parties joined in these proceedings pursuant to paragraph 3 of the order of Dowsett J made on 23 June 2009; Fifth Defendant: Balmain Trilogy Investment Management Pty Ltd ACN 136 832 945; Sixth Defendant: Tom W Powers
Jurisdiction
Australia
Judgment Date
20 July 2009
Procedural Posture
Corporations Law Proceeding / Final Judgment (reasons for Judgment)
Outcome
Proceedings dismissed
Legal Topics
Responsible Entity Removal and Replacement, Procedural Irregularity, Validity of Resolutions, Interpretation of S 601 FM, Application of S 1322
Corporations Law Responsible Entity Removal and Replacement Procedural Irregularity Validity of Resolutions Interpretation of S 601 FM Application of S 1322

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Parties

City Pacific Limited ACN 079 453 955 as the responsible entity for the City Pacific First Mortgage Fund ARSN 088 139 477

First Plaintiff

City Pacific Limited ACN 079 453 955 as the responsible entity for the City Pacific Income Fund

Second Plaintiff

Rodger Bacon (as agent for the "requisitioning members")

First Defendant

Trilogy Funds Management Limited ACN 080 383 679

Second Defendant

Balmain NB Corporation Limited ACN 107 505 760

Third Defendant

Those parties joined in these proceedings pursuant to paragraph 3 of the order of Dowsett J made on 23 June 2009

Fourth Defendant

Balmain Trilogy Investment Management Pty Ltd ACN 136 832 945

Fifth Defendant

Tom W Powers

Sixth Defendant

Procedural Posture

Corporations Law Proceeding / Final Judgment (reasons for Judgment)

Legal Issues

  1. 1 Whether s 601FM of the Corporations Act requires two separate resolutions for removal and replacement of a responsible entity
  2. 2 Whether the purported removal and replacement was invalid, ineffective or void under s 601FJ and Division 2
  3. 3 Whether failure to conduct two separate votes was a procedural irregularity under s 1322

Ratio Decidendi

Section 601FM does not require two separate votes for removal and replacement of a responsible entity; a single resolution effecting both decisions is valid provided it addresses both matters and is supported by an extraordinary resolution. Even if two separate votes are required, the failure to conduct them is a procedural irregularity cured by s 1322(2) since no substantial injustice occurred. If s 1322(2) does not operate, s 1322(4) enables the Court to validate the resolution and no evidence shows a different result would have been reached or that injustice would occur.

Court Disposition

Proceedings dismissed