The High Court in Westfield Management Ltd v AMP Capital Property Nominees Ltd  HCA 54 has confirmed that managed investment scheme members will not be deprived of their statutory rights, conferred in the public interest, by enforcing contractual arrangements operating to defeat such rights.
AMP Capital held a majority of units in the KSC Trust, a managed investment scheme whose major asset was a shopping centre. Westfield held the remaining units in the Trust.
A contractual arrangement between the unit holders and the responsible entity of the scheme precluded the responsible entity from selling the shopping centre without the unit holders’ written consent.
AMP Capital sought to call a meeting to consider a resolution to wind up the scheme under section 601NB of the Corporations Act 2001, the consequence being that the shopping centre would be sold should the resolution be carried.
Westfield did not consent to the sale of the shopping centre. Westfield argued that the unit holder agreement prevented AMP Capital from voting in favour of the resolution to wind up the scheme because the resolution’s result, the sale of shopping centre, was contractually precluded by the unit holders’ agreement.
The Court rejected Westfield’s submissions in its construction of the terms of the contract. However, the Court stated further that in any event it would not enforce contractual arrangements to defeat scheme members’ statutory rights conferred in the public interest.