David Tweed’s Direct Share Purchasing Corporation (DSPC) received another set-back this week, in an action which it took against Australian Unity seeking to force it to register a transfer of units in one of its mortgage trusts.
DSPC took action against Australian Unity despite the fact that the unit holder had already disputed the transfer.
After the unit holder independently settled its dispute with DSPC, Justice Dodds-Streeton of the Federal Court considered the basis on which the action against Australian Unity should be dismissed.
Justice Dodds-Streeton awarded Australian Unity costs against DSPC, saying:
“There are strong indications, if not certainty, of Australian Unity’s probable success had the matter proceeded to trial … A further important consideration in this context is whether the parties acted reasonably. Australian Unity, as a responsible entity, acted reasonably in requiring further investigation before registering the transfer in [the] circumstances.”
Mr David Bryant, Chief Executive Officer of Australian Unity Investments, said that the judgment confirmed the ability of managers such as Australian Unity to protect the interests of investors who have accepted unsolicited offers for their units, sometimes at a fraction of their true worth, where the manager cannot not satisfy itself that the transactions were valid.
“There is always some satisfaction in being vindicated in legal matters, but this judgment is particularly satisfying.
“Our mortgage funds also continue to meet their aim of providing investors with regular income and capital stability, and we believe that investors who don’t need immediate access to capital are unlikely to benefit from selling their units at heavily discounted prices.
“We would always advise investors who receive unsolicited offers to call their financial adviser or our investor services team for more information before they take any action,” Mr Bryant said.
