Wallace Funds Management Pty Ltd v Wallace Absolute Return Ltd [2009] NSWSC 190

Wallace Funds Management Pty Ltd v Wallace Absolute Return Ltd [2009] NSWSC 190

The Notice issued by WAB under Clause 11.3(c) was valid because WFM committed multiple breaches of the Management Agreement by procuring prohibited related party transactions and did not rectify those breaches by a merely formal transfer of the assets without obtaining the required security, as required by the Management Agreement and fiduciary obligations.

Jurisdiction
Australia
Judgment Date
24 March 2009
Procedural Posture
Principal Judgment / Trial
Outcome
Summons dismissed.
Legal Topics
['management Agreement' 'asx Listing Rules' 'related Party Transactions' 'fiduciary Obligation' 'rectification of Breach']
['contracts' 'equity' 'corporate Law'] ['management Agreement' 'asx Listing Rules' 'related Party Transactions' 'fiduciary Obligation' 'rectification of Breach']

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Procedural Posture

Principal Judgment / Trial

Legal Issues

  1. 1 ['Did the independent directors know from about August 2005 that Mr Wallace controlled LCA and LIP and that the acquisitions were related party transactions?' 'Did WAB irrevocably elect against its right to rely upon those transactions as breaches of the Management Agreement?' 'Were there more than two breaches so as to entitle WAB to rely on Clause 11.3(c)?' 'Did WAB elect against its remedy by entering into the contract with Hal?' 'Did the transfer to Hal in itself rectify the breaches?']

Ratio Decidendi

The Notice issued by WAB under Clause 11.3(c) was valid because WFM committed multiple breaches of the Management Agreement by procuring prohibited related party transactions and did not rectify those breaches by a merely formal transfer of the assets without obtaining the required security, as required by the Management Agreement and fiduciary obligations.

Court Disposition

Summons dismissed.

Orders

  • ["The Plaintiff's Summons is dismissed." 'I will hear the parties as to costs.']