Key Points:
Responsible Entities may find their scheme constitutions
do not confer powers for in specie distributions.
In the recent decision of the High Court, Wellington
Capital Ltd v ASIC & Anor [2014] HCA 43, it was held that a
Responsible Entity could not make an in specie distribution to
members because the constitution of the managed investment scheme
did not specifically confer this power.
Commercial implications
The case is a reminder to Responsible Entities (RE) on the
importance of constitutional drafting.
Constitutional provisions are interpreted against the context of
the Scheme Constitution as a whole, and general constitutional
provisions granting broad powers may be insufficient to grant an RE
power to conduct in specie distributions (transfer of scheme
property rather than by sale of property and distribution of
proceeds) to members.
