Macquarie Capital Advisers Ltd v BrisConnections Management
 QSC 82
Many readers will be familiar with the controversial attempt by
Australian Style Investments Pty Ltd (ASI) to wind up the
BrisConnections Management Trust and BrisConnections Investment
Trust (together theBCS). However, many may not be aware of the
injunctive proceedings brought by Macquarie Capital Advisers Ltd
and Macquarie Bank Limited (together Macquarie) against
BrisConnections Management Co Ltd (BMC), the responsible entity of
BCS, in the Supreme Court of Queensland earlier this
month.1 This case confirmed the superior rights of
unitholders under the Corporations Act 2001 (Cth) to call meetings,
and propose and vote on resolutions despite the effect such
resolutions may have on the contractual rights of a third
BSC was awarded a concession to finance, build and maintain the
Airport Link toll road in Brisbane. The Airport Link project is
reputed to be the single biggest infrastructure project presently
underway in Australia. Australian Style Investments Pty Ltd (ASI),
a company operated by Nicholas Bolton, acquired just under 20% of
BCS by purchasing stapled units in BSC. The units are partly paid
and subject to two calls of $1 per unit (the first call being due
on 29 April 2009).
The $1 calls are to be used to pay down bridging finance that
has been acquired by BCS from Macquarie and others to finance the
project. It is a term of the financing agreement between the
parties that BMC must not vary the constitutions of BCS or permit
them to be varied without the prior written consent of Macquarie,
in particular in respect of the calls on the unpaid units.
ASI used its holdings to requisition a meeting of members to
consider a number of resolutions including one to wind up BCS, and
another to amend the constitutions of BCS to allow unitholders to
vote to postpone the $1 calls. Mr Bolton's view was that by
delaying the calls and taking control of BCS through ASI, he could
refinance and better realise the discount between the unit price
and the net tangible asset value of BCS.2
Arguments and findings on the Macquarie injunction
Macquarie argued that the statutory power contained in s 601GC
of the Corporations Act to amend the constitutions of the trusts by
special resolution did not apply where the amendments would result
in BMC breaching its contractual obligations to Macquarie.
Macquarie sought an injunction against ASI, to prevent it from
interfering with BMC's contractual arrangements with Macquarie
(the Tortious Interference argument).
Dutney J found that BMC has a statutory obligation to call the
meeting and to permit the special and extraordinary resolutions to
be put and voted on. Accordingly, an injunction did not lie to
restrain BMC from allowing unitholders to vote on those
For the same reason, specific performance of the negative
covenant not to amend the constitution without consent was
In dealing with the Tortious Interference argument, Dutney J
stated that what was required to justify conduct that would
otherwise be tortious interference with another's contractual
right is the protection of a superior right. ASI was held to have
the superior right as afforded by ss 252B and 252L of the
Corporations Act which allows the exercise of control over the
actions of the BMC as responsible entity by resort to the members
in general meeting. Dutney J concluded that this right was superior
to Macquarie's "quasi-proprietary rights", and as a
consequence an injunction did not lie at the suit of Macquarie to
prevent ASI's conduct.
Current status of the matter
In a move which received substantial media coverage, ASI sold
its voting rights for $4.5 million to Theiss-John Holland (one of
the companies involved in the construction of the Airport Link),
which resulted in ASI's voting rights being used to defeat its
own resolutions. This resulted in BMC avoiding any breach of its
contractual arrangements to Macquarie and achieved the same outcome
as injunctive relief.
Interestingly, another substantial unitholder, Brisbane Toll
Road Link Pty Ltd, gave notice to BMC late last week to requisition
a meeting of unitholders of BCS to, amongst other resolutions,
consider postponing the call for the second instalment.
It will be interesting to see how Macquarie approaches this
further attempt to bring about a breach of its financing
arrangements with BCM.
1 Macquarie Capital Advisers Ltd v Brisconnections
Management Co Ltd  QSC 82
2 Brisconnections Management Co Ltd v Australian Style
Investments Pty Ltd  VSC 128 at paras
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