Bruce v LM Investment Management Ltd

SHA WISE FAMILY TRUST PTY LTD Intervener

order made by: COLVIN J DATE OF ORDER: 14 OCTOBER 2021

1. The plaintiff as trustee of the Baker Partners Founders Fund would be justified in commencing and prosecuting proceedings against Munich Re Syndicate Singapore Pty Ltd (Insurer) for indemnity under insurance policy number SF 2019 20103/1, a copy of which is appended to the affidavit of Robert Garton Smith filed in these proceedings and dated 4 June 2021 for loss associated with Warburton Global Macro Offshore Fund.
2. The plaintiff as trustee of the Baker Partners Founders Fund would be justified in refraining from prosecuting the existing arbitral proceedings that it has commenced against Warburton Investment Management Pty Ltd (ACN 606 839 196) and Leon Rodney Warburton.
3. The application is otherwise dismissed.
4. The plaintiff's reasonable costs of the application for judicial advice be paid from the property of Baker Partners Founders Fund.
5. There liberty to the plaintiff to apply within 14 days for any further orders as to costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

COLVIN J: 1 Primary Securities Ltd (PSL) is the responsible entity of a registered managed investment scheme known as Primary Investment Board (Scheme). The constitution for the Scheme establishes an umbrella scheme whereby members may invest in units of a particular class on specified terms and conditions. The units that are relevant for present purposes are the Class S units. Under the terms of the constitution, the holders of the units in each class are entitled to the separate administration of funds subscribed by members for units in the class. There is to be a separate accounting for each class and distributions are to be made accordingly. In effect, and possibly substantively, the constitution provides for separate schemes in respect of each class of units. However, the application was brought on the basis that the relevant scheme comprised all of the arrangements established by the constitution and that the provisions concerning each class of units were a form of 'sub-scheme'. 2 The Scheme was administered by issuing separate disclosure documents for investment in each class of units. In 2019, a product disclosure statement was issued for the Class S units in the Scheme. It stated that funds subscribed for Class S units would be invested into a unit trust fund (of which PSL would be trustee) (Fund). Monies subscribed to the Fund would, in turn, be invested by PSL as trustee in the Warburton Global Macro Fund (Cayman Fund) operated by Warburton Investment Management Pty Ltd (WIM) by investing in 'Seed Shares' in the Fund. The product disclosure statement also said expressly that the only investment to be made for holders of Class S units would be in the Cayman Fund. WIM is an entity that was controlled at material times by Mr Leon Rodney Warburton. The Cayman Fund came to be known as the Warburton Global Macro Offshore Fund. 3 Eighty-four investors subscribed $8,445,394.56 for Class S units in the Scheme. Of those subscribed monies, $3,035,506.35 were contributed by retail investors. Units in the Fund were issued to the subscribers. Sandhurst Trustees Limited as custodian for PSL as the responsible entity of the Scheme holds the units in the Fund issued in respect of the contributions by retail investors. PSL as trustee of the Fund invested the contributed funds in Seed Shares in the Cayman Fund. The Seed Shares purchased with the funds subscribed by retail investors for Class S units in the Scheme are held by the custodian. However, by reason of the nature of the Scheme insofar as it applied to the Class S units, the funds subscribed for the Seed Shares became part of the Cayman Fund which was outside the custodian arrangements. 4 Upon redemption of the Seed Shares by PSL as trustee of the Fund there was a loss suffered of $4,008,000. Allegations have been made by PSL against Mr Warburton and WIM concerning their alleged responsibility for the loss. The basis for those allegations has been deposed to by Mr Robert Garton Smith the managing director of PSL. The allegations concern certain transactions in which Mr Warburton was said to have been involved. Speaking generally, it is alleged by PSL that funds were moved out of the Cayman Fund for little or no consideration. Mr Warburton is not before the Court on the present application and the matters the subject of the allegations do not fall for determination on the present application. What is relevant for present purposes is the fact that PSL has commenced arbitration proceedings against Mr Warburton and WIM seeking to recover the loss and PSL now proposes to pursue a claim in respect of the loss against PSL's insurers. It says that it has a basis for both claims. 5 Mr Garton Smith has deposed to the fact that PSL's solicitors have conducted inquiries as to the resources available to Mr Warburton (and one of his associated companies alleged to have been involved in the conduct that caused the loss) and that PSL has no evidence that they have assets with which to satisfy an arbitral award. Therefore, PSL proposes to focus upon the insurance claim. An opinion as to the merits of the insurance claim has been obtained from senior counsel and is before the Court as is an exchange of correspondence between lawyers acting for PSL in its capacity as trustee of the Fund and lawyers acting for the insurer. 6 The Fund (of which PSL remains trustee) is now known as Baker Partners Founders Fund. 7 In the above circumstances, redemption of units in the Fund have been suspended. It appears that the suspension is proposed to continue until the outcome of the proposed claim against the insurer is known. 8 By reason that funds cannot be obtained from the Fund, the Scheme insofar as it concerns the Class S units cannot be brought to a conclusion and no funds are yet available to PSL as responsible entity for the Scheme to enable any payment to be made to investors. No issue arises as to the solvency of PSL or the Scheme insofar as it concerns the Class S units. The issue that has arisen concerns the loss. There remain funds within the Fund and the prospect of some payment to the Scheme for distribution to Class S unit holders in accordance with the provisions of the Scheme even if the insurance claim is unsuccessful. What is proposed by PSL is that some of the monies that it holds as trustee of the Fund be used to pursue the claim against the insurer and that the arbitration proceedings not be prosecuted. 9 It is apparent from the affidavit for Mr Garton Smith that the affairs of the Scheme insofar as they concern the holders of the Class S units are confined to the investment in the Seed Shares in the Cayman Fund. He deposes to the following matters of context as to how that investment came to occur: (1) In January 2019, PSL entered into an agreement with WIM, an entity controlled by Mr Warburton. (2) The agreement was entitled 'Financial Services Agreement Warburton Global Macro Fund' (Services Agreement). (3) The Services Agreement provided for PSL to form the Warburton Global Macro Fund and be its trustee and for PSL to appoint WIM as the investment manager of the Fund. It also provided for PSL to set up a class of investment in the Board 'as a retail feeder fund for the Fund'. (4) The Services Agreement recited that PSL entered into its terms 'in its personal capacity'. (5) The Services Agreement provided for outgoing fees to be paid to PSL in its personal capacity by WIM as manager of the Fund including a monthly fee dependent upon the extent of the funds under management which were said to be for services in setting up and administering the Fund. This aspect was not the subject of submissions. I express no view as to whether such an arrangement is appropriate. (6) In March 2019, PSL established and became trustee of the Fund. (7) In March 2019, the Cayman Fund was established (although the affidavit does not describe the circumstances in which that occurred). (8) On 21 March 2019, PSL as trustee of the Fund and WIM entered into an agreement entitled Investment Management Agreement which, broadly speaking, appointed WIM as manager of the Fund. (9) In May 2019, the Cayman Fund entered into a management agreement with WIM and was registered to carry on mutual fund business in and from the Cayman Islands. (10) In July 2019, the Cayman Fund invited investment in shares in the Cayman Fund. (11) Acting on the advice of WIM as manager, PSL as trustee of the Fund subscribed for Seed Shares in the Cayman Fund and upon payment of subscriptions such shares were issued. (12) In August 2019, Mr Warburton communicated to PSL that he proposed to close the Cayman Fund and to redeem client funds to the Trust (the affidavit does not condescend to any detail as to the reason why such redemption was to occur). (13) Thereafter, PSL sought redemption of the Seed Shares in the Cayman Fund. 10 In the above circumstances, PSL seeks orders to the following effect: (1) Class S of the Board be wound up pursuant to s 601NF(2) of the Corporations Act 2001 (Cth) as if it were a separate and discrete managed investment scheme; (2) PSL be appointed to conduct the winding up; (3) PSL be entitled to be remunerated out of the assets in the winding up; (4) the unit trust described in these reasons as the Fund be wound up pursuant to s 92 of the Trustees Act 1962 (WA); (5) PSL be appointed as the entity responsible for ensuring that the Fund is wound up in accordance with the trust deed of the Fund; (6) PSL be entitled to remuneration in respect of the winding up in accordance with the terms of the trust deed of the Fund; (7) PSL would be justified in commencing and prosecuting proceedings against the insurer in respect of the loss; (8) PSL would be justified in refraining from prosecuting the arbitral proceedings; (9) PSL's costs of commencing and prosecuting proceedings against the insurer be paid from the property of the Fund; and (10) there be provision for payment of PSL's costs of the application. 11 The following matters of general principle may be noted: (1) Part 5C.9 of the Corporations Act confers power to make orders for the winding up of the Scheme. (2) The terms of the provisions in Part 5C.9 indicate that generally it is to be the responsible entity which winds up the scheme: Bruce v LM Investment Management Ltd [2013] QSC 192 at [45]. However, this general provision must allow for the terms of s 601NF which confer an express power for the Court to appoint a person other than the responsible entity to take responsibility for ensuring that a registered scheme is wound up in accordance with its constitution and to make directions as to how that is to occur. It must also be noted that the power to appoint such a person arises 'if the Court thinks it is necessary to do so': Re Stacks Managed Investments Ltd [2005] NSWSC 753 at [49]-[50]. Such orders are made in various circumstances, such as in the case of the insolvency of the responsible entity or the scheme or where it is impracticable for the responsible entity to undertake the winding up. Such appointments are not unusual: Silvia administrators appointed, in the matter of FEA Plantations Ltd (subject to deed of company arrangement) (receivers appointed) [2013] FCA 1331 at [32]. (3) Otherwise, the Court may direct the responsible entity to wind up a scheme if the Court thinks it is 'just and equitable to do so' or execution process against the responsible entity has been returned unsatisfied: s 601ND(1). (4) In considering whether to make an order directing the responsible entity of a managed investment scheme to wind up the scheme, the case law on the winding up of corporations on the just and equitable ground is applicable: Capelli v Shepard [2010] VSCA 2; (2010) 29 VR 242 at [102]-[104]. (5) A trustee proposing to commence or defend an action does so at his or her own risk as to costs if those steps are taken without the sanction of the Court: Macedonian Orthodox Community Church St Petka Incorporated v His Eminence Petar The Diocesan Bishop of The Macedonian Orthodox Diocese of Australia and New Zealand [2008] HCA 42; (2008) 237 CLR 66 at [47], approving Lindley LJ in In re Beddoe; Dowmes v Cottam [1893] 1 Ch 547 at 557. 12 I am satisfied that adequate steps have been taken to notify holders of Class S units of the present application, the material relied upon to support the application and the nature of the orders sought. Affidavit material deposing to those steps has been provided. In the result, only Mr Andrew Wise, a director of Sha Wise Investments Pty Ltd sought to be heard on the application. No objection was raised by PSL to Mr Wise intervening to be heard on the question whether the orders sought on the application should be made by the Court. However, objection was taken to the extent that Mr Wise sought to invite the Court to address certain questions that he raised that went beyond the matters raised by the nature of the application. 13 There were three aspects to the matters raised by Mr Wise insofar as they were relevant to the orders sought by PSL. First, whether it was appropriate that PSL be allowed to have the conduct of the proposed windings up in circumstances where it had been responsible for the conduct of the affairs of the Trust at the time of the loss. Mr Wise made reference to his efforts to raise complaints about the conduct of PSL. In effect, this reduced to a claim of conflict of interest on the part of PSL. Second, concerns about the remuneration that should be charged by PSL. In the result, he did not press those concerns as to future remuneration in circumstances where senior counsel accepted that any order for winding up would be on terms that would require any remuneration, costs and expenses to be subject to approval by the Court. Third, a desire to ensure that claims could be advanced against PSL. 14 PSL also placed before the court email communications in which some of the holders of Class S units had raised concerns as to the events that had resulted in the loss of part of their funds and about the lack of updates as to the steps that were being taken to seek to recover the loss.

Issues for consideration 15 The following issues arise: (1) Can an order can be made winding up part of the scheme and if so is it is appropriate to make such an order? (2) Should an order be made for the unit trust comprising the Fund to be wound up? (3) Should PSL be appointed to undertake any such winding up? (4) If winding up orders are made, what orders should be made as to remuneration, costs and expenses? (5) Should advice be given that PSL is justified in not pursuing the arbitration and in pursuing the insurance claim?

Issue (1): The winding up of Class S of the Scheme 16 As has been noted, the constitution of the Scheme contemplates the separate administration of Class S of the Scheme. As contemplated by the Scheme, the only assets available to holders of Class S units are the units in the Fund held by the custodian. Unless and until there can be a redemption of those units there are no funds to be administered in respect of Class S. 17 The constitution provides that a Class shall terminate upon that Class being wound up by the responsible entity: cl 26.3. A meeting of the investors of a Class may resolve to terminate the relevant Class 'whereupon the Responsible Entity shall wind up the Class': cl 26.4 and cl 26.5. 18 Clause 26.6 sets out the procedure to be followed upon termination of a class. There are separate provisions that apply where there is to be the termination of the whole Scheme: cl 26.7. 19 It is submitted for PSL that the object and purpose of the Class S 'sub-scheme' of the Scheme 'cannot now be accomplished or achieved'. I am not satisfied that is the case. The investment that the constitution required the Responsible Entity to undertake has been undertaken. It has resulted in an investment in the units in the Fund. Those units, at present, are unable to be redeemed. However, there are monies that are held by the Fund. They are not available at this time because of the course that PSL proposes to undertake in its capacity as trustee of the Fund. 20 Further, any winding up of the Class that was ordered to take place at this time would not be in accordance with the constitution. Also, there would be a need to defer its finalisation until matters concerning the Fund have been finalised and there has been a distribution from the Fund to unit holders. It is not evident that any purpose would be served by the making of an order requiring the winding up of the Scheme. I am not satisfied that the point has been reached where it is appropriate to make any such order. 21 Therefore, it is not necessary to resolve whether s 601ND permits the making of an order of the kind proposed that would direct the responsible entity to wind up part only of a scheme. 22 The consequence is that there is no need to consider the formulation of any order as to how the remuneration and costs of undertaking any winding up would be formulated, including the form of the proposed supervision by the Court. Rather, the provisions of the Scheme will continue to apply to its administration.

Issue (2): Winding up of the Fund 23 The trust deed for the Fund states that its object was to invest with the Warburton Global Macro Offshore Fund, a Cayman Islands exempt company. That object was carried out and the investment made in the Seed Shares. 24 As to the duration of the term of the unit trust established by the trust deed, the deed provides that it will terminate on the final distribution following the sale of all Investments. There is a further provision to the effect that early termination may occur by special resolution of the unit holders or 'if the services of the Investment Manager are terminated': cl 24.3. The term Investment Manager is defined to mean WIM. On the evidence the services of WIM were terminated on 1 December 2019. A successor was appointed but its services were terminated on 24 December 2019. 25 On its face, cl 24.3 confers a power to effect early termination. It does not operate to bring the term of the unit trust to an end upon the happening of the event. It is to be noted that cl 24.3(a) in providing for early termination upon a special resolution of members says that upon such a resolution being passed 'the Trustee shall wind up the Trust'. 26 As to the consequences of early termination, cl 24.7 of the trust deed provides: Upon the early termination of the Trust …, the Trustee shall immediately sell, call in, convert and realise all Assets for the time being of the Fund and from the proceeds pay all proper costs and disbursements, commissions, brokerage fees, legal fees and other outgoings. The Trustee may, but need not, have regard to any contingency or outstanding matter and may, if it sees fit to do so, settle or discharge any such contingency for the Unit Holder or retain part or all of the Assets by way of indemnity in respect thereof but such retention shall not affect the release mentioned in Clause 24.11 [which deals with a release from liability for the trustee]. 27 Therefore, early termination of the trust established by the trust deed for the Fund would require the trustee to act with immediacy to realise the value of any claim that it has against any other party that comprises an Asset, including the insurer. It would require the trustee to follow that course instead of continuing with the administration of the affairs of the trust comprising the Fund. 28 PSL has not made any submission to the effect that the power to effect early termination which arises upon the termination of the Investment Manager should be exercised by PSL in the circumstances which pertain (or that it has been exercised). PSL does not contemplate an immediate conversion and realisation of all the Assets of the Fund including the right which it maintains exists to indemnity under the contract of insurance with the insurer. Rather, it proposes a course in which proceedings are to be conducted against the insurer, presumably as part of the proposed process of winding up the affairs of the Fund. However, as is explained below, the trust deed contemplates that the management of the Fund may involve the conduct of litigation. Further, the trust deed has provisions by which the holders of units in the Fund may redeem those interests. It is apparent from the evidence that redemption is sought. As has been noted, solvency is not an issue. Therefore, as matters presently stand winding up is not needed in order to effect an orderly distribution to unit holders. Indeed, it may be contrary to the interests of the holders of units in the Trust for the provisions of the trust deed in relation to early termination to be given effect. 29 As has been indicated, the trust deed contemplates that the trustee of the Fund may have to incur expenses or liabilities in prosecuting or defending any action or suit and that the Trustee may indemnify itself out of the Fund 'from and against any expense or liability … except to the extent that any such expense or liability is attributable to any breach by the Trustee of its fiduciary duties': cl 22.19. This is an important provision. No judicial advice is sought on the present application by PSL as trustee of the Trust as to whether it is entitled to such an indemnity in all the circumstances. Further, the indemnity is not expressed to extend to remuneration of the trustee in the conduct of any such action or suit. 30 The trustee of the Fund has all the powers of a natural person: cl 15.2. It has express power to make any insurance claims (cl 15.3(k)), to institute and prosecute legal or arbitration proceedings (cl 15.3(l)) and to indemnify as provided by cl 22.9, to which reference has been made (cl 15.3(r)). 31 As to remuneration of the trustee, cl 22.1 provides: The Trustee will only be entitled to the payment or reimbursement of costs, fees, disbursements, expenses and out-of-pockets incurred under this Clause 22 (Remuneration of Trustee) in relation to the performance of the Trustee's duties under this Trust Deed where it has properly performed those duties. 32 Clause 22 then provides for an establishment fee in a fixed amount (cl 22.4), a monthly fee, generally calculated by reference to the amount of funds under management (cl 22.5), a monthly administration fee capped at a specified amount (cl 22.6), a financial statements fee in a specified amount (cl 22.6(a)), a portal fee in a fixed amount per annum (cl 22.6(b)) and a trustee's public indemnity insurance fee as specified (cl 22.7). There are also provisions for the payment of fees to the Investment Manager. Finally, there is an extensive provision which entitles the trustee to payment of 'costs, fees, disbursements and out-of-pockets' properly incurred in the administration or management of the trust or the winding up of the trust: cl 22.14. Further, there is an express provision, specifying services and expenses for which there is no right to any further remuneration or right of reimbursement on the part of the trustee: cl 22.16. 33 In short, the trust deed has comprehensive provisions as to the nature and the extent of remuneration of the trustee in circumstances where the administration of the Fund is ongoing and those provisions extend to dealing with the eventuality of the Fund being involved in litigation. 34 It is not suggested that, in the interests of the holders of units in the trust, a winding up will produce greater benefits or efficiencies than would flow if the trust deed continued to be administered according to its terms. Plainly on the evidence there are sufficient funds for that to occur. The issue is whether it is appropriate for the trustee to commence and prosecute proceedings against the insurer as part of that administration. The question whether PSL is justified in commencing proceedings against the insurer is a separate matter. 35 Therefore, I am not satisfied on the evidence that there is any reason why there needs to be an order at this point in time to effect the winding up of the Fund. Rather, in circumstances where the trustee has formed the view, on legal advice, that proceedings should be commenced against the insurer, what is needed is for PSL to act promptly in prosecuting any proposed claim against the insurer. It is appropriate for the first step to be taken in that regard to be an application for judicial advice. If, as the trustee maintains, it is justified in following that course, then the administration of the Fund should continue according to its terms and those proceedings should be followed to their resolution. 36 Accordingly, I am not satisfied as matters presently stand that there is any reason for the winding up of the Fund pursuant to the power conferred by the Trustees Act.

Issues (3) and (4): The conduct of any winding up and costs of winding up 37 As I am not satisfied that there should be any orders for winding up, Issues (3) and (4) do not arise. Therefore, it is not necessary to consider whether it is appropriate to appoint PSL to have the conduct of any such winding up. Rather, its obligation to administer the Scheme and the Trust according to their terms will remain.

Issue (5): Judicial advice as to the arbitration and the proposed proceedings 38 The principles to be applied upon an application by a trustee for judicial advice were recently summarised by Black J in Re Courtenay House Capital Trading Group Pty Ltd (in liq) [2021] NSWSC 256 at [4]. The application is in the nature of an application for private advice by the trustee and requires the Court to consider what should be done in the best interests of the trust (that is to say, the beneficiaries or charitable or other purpose interested in its due and proper administration). The nature of the jurisdiction was considered by the High Court in Macedonian Orthodox Community Church. As to statutory provisions concerning the power of the court to give judicial advice to trustees, three maters may be noted: First, as a jurisdictional provision it should not be construed as being subject to any implied limitation. Second, when a court exercises jurisdiction of the kind conferred by such a provision it is giving private advice and is not determining the rights of parties. Third, the circumstances in which the advice may be given are indicated by the language in the particular provision. See Preston, in the matter of Sandalwood Properties Ltd [2018] FCA 547 at [40]. 39 Under the Trustees Act in Western Australia, any trustee may apply for directions concerning any property subject to a trust, or respecting the management or administration of that property, or respecting the exercise of any power or discretion vested in the trustee: see, the review by Edelman J of the history of the relevant provision in Western Australia in Plan B Trustees Ltd v Attorney-General (WA) [2012] WASC 392. 40 Taking account of the considerations identified by Edelman J in Plan B it seems to me that the following matters are of significance in the present case: (1) PSL has engaged experienced counsel and solicitors in respect of the claim against the insurer; (2) the proposed claim against the insurer is the subject of a considered formal opinion by senior counsel as to its merits; (3) the contents of the correspondence from the insurer by way of response to the claim (and the matters the subject of formal opinion) give rise to matters on which there is, in effect, a joinder of issue rather than any matter that exposes a fundamental weakness in the claim; (4) there is no suggestion in the matters raised by way of response by the insurer that the insurance claim might be answered in some way by a claim against PSL as trustee; (5) the claim, if successful, would result in an award of damages of more than $4 million; (6) on the evidence, the legal costs to be incurred in pursuing the claim to and including trial are expected to be of the order of $330,000; (7) the advice to PSL from its solicitors is that it may expect to recover 50%-66% of its legal costs if successful; (8) the cash assets of the Fund are in excess of $1.8 million; (9) PSL is not charging administration fees at the present time and there is no suggestion that the fees that might be charged by PSL would make the litigation against the insurer an imprudent step; (10) if the claim against the insurer is successful, the loss that was suffered would be recovered and those funds less the costs exposure could be returned to the Scheme and then to the investors; (11) it may be inferred that the cost liability that may arise if the proceedings were unsuccessful is not out of proportion to the subject matter of the proposed claim against the insurer; and (12) there is no suggestion that the insurer would not have the funds to meet any judgment. 41 Therefore, I am satisfied that PSL would be justified in bringing the proposed claim against the insurer. 42 PSL also seeks advice to the effect that it would be justified in not proceeding with the arbitration against Mr Warburton and WIM. On the evidence before the Court as to their means, that course is also justified. 43 Finally, PSL seeks an order that the plaintiff's reasonable remuneration, costs and expenses of commencing and prosecuting the proposed proceedings against the insurer be paid from the property of the Fund. It relies upon the terms of cl 22.19 (quoted above) and the authorities concerned with the trustee's general right to be reimbursed or indemnified out of the trust property, including Chief Commissioner of Stamp Duties for New South Wales v Buckle (1998) 192 CLR 226 at [47]-[49] and Gatsios Holdings Pty Ltd v Nick Kritharas Holdings Pty Ltd (in liq) [2002] NSWCA 29 at [4], [8]-[10], [15]-[18] (Spigelman CJ), [40]-[42] (Mason P), [45]-[47] (Meagher JA). 44 I am not persuaded as to the need or basis for such an order. As the submission stated the entitlements of trustees are well established. There was no indication of any particular uncertainty or doubt to which the making of the proposed order was addressed. Further, in the circumstances of the present case there are detailed provisions in the trust deed both as to the remuneration of PSL as trustee and as to a qualification to the extent of the indemnity available in respect of the reasonable costs and expenses of conducting the proposed litigation against the insurer. It has not been shown why or on what basis the operation of those provisions might be affected or altered by the making of an order in the terms proposed (which is not sought to be expressed by way of judicial advice as to an appropriate course to be followed in relation to remuneration, costs and expenses).

Suggested conflict of interest on the part of PSL 45 It was submitted by Mr Wise, in effect, that there were reasons to be concerned that PSL may have a conflict of interest by reason of its own conduct in dealing with Mr Warburton. Further, as was submitted for PSL, on the evidence it has acted openly to bring matters to the attention of the regulator and to the investors. Matters of that kind are only relevant on the present application to the extent that they bear upon the question whether it is appropriate for PSL to be have the conduct of any winding up. For reasons I have given, I do not propose to make any winding up order. 46 The orders that I propose be made would be confined to the judicial advice sought by PSL. The provision of that advice would have no consequence for any claim that might be contemplated by any party against PSL or any ongoing issue that may arise as to the manner in which PSL should be remunerated having regard to the detailed provisions in the trust deed. I express no view as to the operation of those provisions which are separate matters.

Form of proposed orders as to remuneration 47 It follows that the issues raised at the hearing of the application as to the form of orders by which the Court may supervise the remuneration, fees and expenses of any winding up do not arise. The Fund must be administered in accordance with the trust deed. I adjourned the hearing for the purpose of considering any such consequential orders as to remuneration should the need arise. As those issues do not arise, there are no further matters to be addressed on the application and there is no need to relist the application for that purpose.

Reporting to the investors 48 Mr Wise also raised concerns as to whether there had been adequate reporting to the investors. Senior counsel for PSL pointed to the information in the affidavit material as demonstrating that information had been provided to investors and the extent to which there was information about the costs that had been expended by PSL as trustee of the Fund to date. It was accepted that it was appropriate for there to be ongoing regular provision of information to investors. That indication was appropriate in all the circumstances. It is not for the Court on the present application to assume any ongoing role as to the supervision of the administration of the Scheme insofar as it concerns reporting to investors in Class S units in the Scheme.

Conclusion and costs 49 For the reasons that I have given, I propose to grant the application to the extent that it seeks judicial advice but otherwise dismiss the application. 50 PSL sought an order for the costs of the application. I am satisfied that there should be an order for the costs of the application for judicial advice to be paid out of the assets of the Fund. Otherwise, I will grant liberty to PSL to apply for any further order as to costs of the application having regard to these reasons. I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Colvin.