These proceedings involved a claim by the responsible entity of a management investment scheme, acting by the court appointed receiver to the fund, against its former directors. The responsible entity claimed that the directors had contravened their duties to exercise care and to act in the best interests of the scheme’s members under ss 601FD(1)(b) and (c) of the Corporations Act 2001 (Cth). The alleged contraventions concerned a decision by the directors to distribute the proceeds of a settlement of litigation 65% to the responsible entity and 35% to an unregistered scheme of which the responsible entity was trustee.
Jackson J dismissed the claim. In doing so, his Honour made a number of notable observations about the scope of directors’ duties under ss 601FD(1)(b) and (c) of the Corporations Act.
The judgment can be viewed here.