Yi v Alliant Perpetual[2024] QSC 20

SUPREME COURT OF QUEENSLAND

Introduction and parties

1. [1]
   The applicant seeks a declaration that she is entitled to the repayment of $1 million forthwith under the terms of an Investment Management Agreement (the “IMA”) and Investment Guarantee.  
2. [2]
   The applicant also seeks an order that the respondent pay to the applicant the amount of $1 million, together with interest.
3. [3]
   The declaratory relief is said by the parties to largely turn on the proper construction of the IMA.  This is said to involve the following three contentions.
4. [4]
   First, the applicant says that on the proper construction of the IMA, the applicant is presently entitled to the return of the Nominal Principal Investment Amount.  As will be seen, the Nominal Principal Investment Amount is a sum of $1 million and is also referred to in the IMA as the Investment Amount. This contention has at its foundation the proposition that for a Guaranteed Investment Option (which is the form of Investment Option which the applicant has elected under the IMA), the Nominal Principal Investment Amount is repayable upon the delivery of a Withdrawal Request after the Minimum Withdrawal Request Timeframe of 18 months provided for in Schedule 4 of the IMA.  This contention also involves the further proposition that, on the proper construction of the IMA, clause 6.3(b) (being a form of liquidity clause), has no operation in respect of this specific obligation to repay the Nominal Principal Investment Amount, being the $1 million (the “First Contention”).
5. [5]
   Secondly, and as an alternative contention, the applicant says that clause 6.3(b) contains an illusory promise that does not create a legal obligation or promise, and is therefore unenforceable.  The applicant says that clause 6.3(b) should be severed from the IMA, and accordingly, the applicant is entitled to the return of the Nominal Principal Investment Amount (the “Second Contention”).
6. [6]
   Thirdly, again as an alternative contention, the applicant says that the language of clause 6.3(b) is so vague or imprecise that it should be severed from the IMA.  As part of this contention, the applicant says that the language of clause 6.3(b) does not reveal a particular contractual intention capable of enforcement.  Again, the applicant says that as a result of this contention, she is entitled to the return of the Nominal Principal Investment Amount (the “Third Contention”).

Background Facts

1. [7]
   The facts surrounding the entering into of the IMA are as follows.
2. [8]
   By July 2017, the applicant wished to obtain a sub-class 132B Visa.  This is a form of Australian visa for a person who is prepared to commence a new business in Australia, and who provides a source of venture capital funding to a member of the Australian Investment Council, which was formerly known as the Australian Private Equity and Venture Capital Association Limited.  
3. [9]
   A corporate entity that assisted people with obtaining such visas referred the applicant to the respondent. The applicant understood that if she made an investment of $1 million with the respondent, then that would satisfy one of the requirements for a sub-class 132B Visa. 

1. [10]
   The applicant entered into the IMA with the respondent for the purpose of satisfying a requirement for the sub-class 132B Visa.  The IMA was dated 8 July 2018.
2. [11]
   The applicant paid the Nominal Principal Investment Amount under the IMA on  7 August 2018.  This Nominal Principal Investment Amount was $1 million.
3. [12]
   By Schedule 4 of the IMA, the $1 million was to be invested in “software technology/Australian venture capital.”  It seems that those funds were ultimately invested by the respondent in:

1. (a)
   Class G redeemable preference units of a managed investment trust known as the Silvertree Ventures Unit Trust; and
2. (b)
   Estrala Early-Stage Venture Capital Limited Partnership, with the evidence not disclosing the exact form of investment (eg loan instrument, shares, units in a unit trust etc).

1. [13]
   Schedule 4 of the IMA provides that the $1 million was invested under the Guaranteed Investment Option.  This is one of three types of investment options available under the IMA.  The second type of Investment Option available under the IMA is a Capital Growth Investment Option, with the third type being a Hybrid Investment Option.
2. [14]
   On 5 April 2022, the applicant, by her solicitor, gave a written notice pursuant to clause 6.1 of the IMA for the withdrawal of her $1 million, which amount was described in the notice as the Nominal Principal Investment Amount.  The request for the withdrawal of this $1 million was declined by the respondent.  The respondent asserted, in part, that the term of the investment was to 8 August 2022 and also that the return of any moneys was subject to available liquidity pursuant to clause 6.3(b) of the IMA.
3. [15]
   At the time of the hearing of this application, the $1 million has not been repaid,  either in whole or in part.
4. [16]
   Both parties to the proceeding made clear that if I find that clause 6.3(b) is operative in respect of the applicant’s entitlement to withdraw funds, then I am not separately being asked to determine any factual dispute as to whether clause 6.3(b) had, and continues to have, the effect of postponing the obligation to make payment of the whole or part of the amount the subject of the Withdrawal Request.  
5. [17]
   More particularly, this Court is not being asked in this proceeding to determine if, and up to when, the respondent had sufficient liquidity to return whatever was the relevant amount provided for under the Guarantee Investment Option.

Terms of the IMA

1. [18]
   The contentions posed by the parties in this proceeding involve the proper construction of the IMA.  In that respect, it is necessary to set out certain parts of its  provisions in detail.  The relevant provisions of the IMA are as follows:^[1]

“Dated: July-08-2018 

BETWEEN: Alliant Perpetual          (‘Investment Manager’)

 AND:    YI, Xianhuang    (‘Client’)

…

2. A.The Investment Manager provides professional investment management services in relation to venture capital and early stage venture capital opportunities.
3. B.The Client wishes to invest venture capital and/or early stage venture capital opportunities.
4. C.The Client wishes to engage the Investment Manager to provide the Professional Services.
5. D.The Investment Manager has agreed to provide the Professional Services to the Client, subject to the terms of this Agreement.

2. 1.DEFINITIONS AND INTERPRETATION
3. 1.1Definitions

…

Adjusted Investment Amount means, in relation to an Investment Option at the Completion Date, the net present value of the Investment Amount, less any Management Fees and Management Expenses.

…

Capital Growth Investment Option means the capital growth investment option described in Schedule 3.

Completion is defined in clause 6.3 of this agreement.

Completion Date is the date the Completion occurs on by operation of this agreement.

…

Guaranteed Investment Option means the guaranteed investment option described in Schedule 3.

…

Hybrid Investment Option means the hybrid investment option described in Schedule 3.

… 

Investment Amount means the Client’s nominal principal investment amount identified in Schedule 4.

Investment Option means, as the case requires, the Guaranteed Investment Option, the Capital Growth Investment Option or Hybrid Investment Option.

…

Management Expenses means the expenses incurred by the Investment Manager in the provision of the Professional Services as detailed in Schedule 3 and to be reimbursed by the Client.

…

Minimum Investment Timeframe means the minimum timeframe in which the Investment Manager will deal with the Investment Amount as specified in Schedule 4.

Minimum Withdrawal Request Timeframe means the minimum timeframe in which the Investment Manager will deal with a request to withdraw the Investment Amount as specified in Schedule 4.

…

Withdrawal Request means a request made by the Client in accordance with clause 6.1 of this Agreement.

2. 1.2Interpretation

In this Agreement, unless the contrary intention appears:

1. (a)
   The language of this agreement is English, and any alternative or contrary interpretations to a part or parts of this agreement that arise from a partial or whole translation of this agreement are invalid to the extent that they contradict or differ to the ordinary or particular English meaning given to the subject matter in the context of this agreement;
2. (b)
   clause headings are for convenient reference only and have no effect in limiting or extending the language of the provisions to which they refer;

…

2. 2.TERM OF AGREEMENT

This Agreement commences on the Commencement Date and, continues until:

1. (a)
   the Client is entitled to make a proper request for the withdrawal and return of their Investment or Adjusted Investment Amount; and
2. (b)
   the Investment Manager has returned the Investment or Adjusted Investment Amount to the Client.

2. 3.COMMENCEMENT OF INVESTMENT
3. 3.1Investment Option and Investment Amount

The client must provide to the Investment Manager:

1. (a)
   notification of the Investment Option; and
2. (b)
   the Investment Amount,

to enable to the Investment Manager to provide the Professional Services.

2. 4.RIGHTS AND OBLIGATIONS OF INVESTMENT MANAGER
3. 4.1Provision of Services The Investment Manager:

…

1. (b)
   must invest the Investment Amount in accordance with the Investment Option notified to the Investment Manager by the Client; and

…

2. 5.2Fees accrue

Management Fees and Management Expenses:

1. (a)
   accrue on receipt of the Investment Amount by the Investment Manager until the Investment Amount has been returned to the Client; and
2. (b)
   are payable on Completion of the Investment Option; and
3. (c)
   will be deducted by the Investment Manager from the Investment Amount on Completion.

2. 6.WITHDRAWAL AND COMPLETION
3. 6.1Withdrawal Request

A Withdrawal Request:

1. (a)
   can be made by the Client in writing to the Investment Manager after the expiry of the Minimum Investment Timeframe; or
2. (b)
   can be made by the Client in writing to the Investment Manager after the expiry of the Minimum Withdrawal Request Timeframe.

2. 6.2Calculation of the Minimum Investment Timeframe

The Completion Date is the later of:

1. (a)
   expiry of the Minimum Investment Timeframe plus one calendar day; or 
2. (b)
   where the Investment Option has been made in tranches by the Investment Manager:

1. (i)
   the minimum Investment Timeframe commences on the date the last tranche of the Investment Option is made; and
2. (ii)
   concludes one calendar day after the expiry of that period.

2. 6.3Completion

Completion of the Investment Option will occur:

1. (a)
   after receipt of a Withdrawal Request by the Investment Manager; and
2. (b)
   the Investment Manager has sufficient liquidity to return the Adjusted Investment Amount; and
3. (c)
   the Investment Management has paid the Adjusted Investment Amount to the Client, as directed by the Client.

2. 7.ACKNOWLEDGMENTS AND WARRANTIES
3. 7.1Client Acknowledgements

The Client acknowledges and confirms:

1. (a)
   (investment risk borne by Client) that the Investment Amount is invested at the sole risk of the Client;
2. (b)
   (loss of Investment Amount) there is a risk that some or all of the Investment Amount may be lost as a result of the nominated Investment Option; and
3. (d)
   (Minimum Investment Timeframe) the Investment Amount will:

1. (i)
   be invested for at least the Minimum Investment Timeframe; and
2. (ii)
   will not be accessible by the Client during the Minimum Timeframe and until a Withdrawal Request is made.

1. (e)
   (no guarantee) the Investment Manager does not provide any guarantee in relation to:

1. (i)
   the performance of the Investment option selected by the Client, or at all, or 
2. (ii)
   the likelihood or any return on the Investment Amount through payment of a distribution, capital growth or otherwise.

1. (f)
   (Completion) Completion may be delayed due to circumstances outside the control of the Investment Manager including, but not limited to, delays due to withdrawal from the selected Investment Option or investment structure or a delay in the exit, sale or other divestment of the underlying assets of the Investment Option.

…

2. 9.TERMINATION
3. 9.1Termination for breach

This Agreement terminates on the earlier of any of the following events:

1. (a)
   the Client does not pay the Investment Amount to the Investment Manager;
2. (b)
   the Client fails to comply with a reasonable request for information or action from the Investment Manager; or
3. (c)
   there is a breach of a material term of this Agreement by the Client;
4. (d)
   Completion of the Investment Option occurs pursuant to a Withdrawal Request. 

…

1. [19]
   Schedule 3 Investment Options

Schedule 4  Investment Particulars

…”

1. [19]
   For the purposes of avoiding confusion, I have sought to use capitalised words in these reasons as they appear in the IMA.  Those words are usually defined terms in the IMA, but there are some limited exceptions.

Principles in relation to construction

1. [20]
   The parties accept that the IMA is a commercial contract.  The principles applicable to construing commercial contracts are not in dispute as between the parties.
2. [21]
   Relevantly, the correct approach to such a construction task has been succinctly summarised by Kelly J (with whom Morrison JA and Ryan J agreed) in QNI Resources Pty Ltd v North Queensland Pipeline No 1 Pty Ltd [2022] QCA 169 at [53]:

“The principles of construction relevant to the interpretation of a commercial contract were not in dispute.  Unless a contrary intention is indicated in a contract, a Court is entitled to approach the task of giving a commercial contract a business-like interpretation on the assumption “that the parties intended to produce a commercial result.”  There is no contrary intention indicated in the GTA.  Further, a commercial contract is to be interpreted so as to avoid “making commercial nonsense or working commercial inconvenience.”  The commercial purpose of the contract is the purpose of reasonable persons in the position of the parties at the time of a contract.  Hence, in determining meaning, the Court has to ask “what a reasonable businessperson would have understood” the contract to mean.  This question directs the Court to consider “the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract.”  The whole of the contract has to be considered as the meaning of one part may be revealed by other parts.  Literal interpretations which lack commercial efficacy or common sense are, where possible, to be avoided.”  (Footnotes omitted)

First Contention

1. (i)
   The applicant’s submissions

1. [22]
   The applicant has made submissions on this contention to the following effect.
2. [23]
   Clause 2 of the IMA deals with the commencement of the agreement and its continuing operation.  The applicant observes that the clause differentiates between a request for the withdrawal and return of the Investment on the one part, and a request for the withdrawal and return of the Adjusted Investment Amount on the other part.  The bifurcation between the two concepts of Investment and Adjusted Investment Amount is said by the applicant to be deliberate and important.  I note there that whilst the word “Investment” is capitalised in clause 2 as if it were a defined term in the IMA, it is not.
3. [24]
   Clause 6 is then said to regulate how a client makes a Withdrawal Request, and when Completion of an Investment Option is to occur.  In particular, the applicant says that clause 6.1 allows a Withdrawal Request to be made in writing to the Investment Manager at any time after the expiration of the Minimum Withdrawal Timeframe (defined in Schedule 4 to be 18 months), or at any time after the expiration of the Minimum Investment Timeframe (defined in Schedule 4 to be 4 years).

1. [25]
   The applicant says that the Withdrawal Request, which can be made after the expiration of the Minimum Withdrawal Timeframe, but before the expiration of the Minimum Investment Timeframe (ie after 18 months but before 4 years), can only be for the Investment, being one of the bifurcated concepts referred to in clause 2.  On the applicant’s case, if a Withdrawal Request can be made pursuant to clauses 2 and 6.1 in the period of 18 months to 4 years, then there must be a right to be paid the amount requested immediately or within a reasonable time of the request.
2. [26]
   The applicant says that the definition of Adjustment Investment Amount in clause 1.1 necessarily results in the sum representing that particular amount being unascertainable until the Completion Date.  The Completion Date is separately defined in clauses 1.1 and 6.2 to mean the Minimum Investment Timeframe plus one day, namely 4 years and one day.  The respondent says that in contradistinction the Nominal Principal Investment Amount is a sum certain at all times.  The applicant equates the Nominal Principal Investment Amount to the meaning of the word “Investment” as used in clause 2.  Accordingly,  the applicant says that the withdrawal request between 18 months and 4 years can only be in respect of the  clause 2 concept, which represents a sum certain, capable of being paid back within the submitted immediate or reasonable timeframe.

1. [27]
   The applicant says that once a proper and operative Withdrawal Request is made for the return of the Nominal Principal Investment Amount, the IMA does not otherwise condition the obligation on the respondent to repay the Nominal Principal Investment Amount within the submitted immediate or reasonable timeframe.  
2. [28]
   The applicant refers to this purported obligation to repay as unconditional.
3. [29]
   The applicant submits that to the extent clause 6.3(b) has a valid operation, that operation is in respect of a Withdrawal Request made after the expiration of the Minimum Investment Timeframe for the return of an Adjusted Investment Amount. This later form of payment obligation is said to be a conditional obligation.  
4. [30]
   The applicant says that clause 6.3(b) has no work to do when there is a Withdrawal Request for the Nominal Principal Investment Amount after the expiry of the Minimum Withdrawal Timeframe but before the expiration of the Minimum Investment Timeframe.
5. [31]
   In the alternative, the applicant further submits that even if a Withdrawal Request for the return of the Nominal Principal Investment Amount made in the period from  18 months to 4 years only creates an obligation to return that amount after the 4 year mark, clause 6.3(b) still has no work to do in respect of that obligation.  

1. (ii)
   the respondent’s submissions

1. [32]
   The respondent rejects the construction and operation contended for by the applicant above.  
2. [33]
   The respondent’s submissions may be summarised as follows.
3. [34]
   The respondent says that clause 6.1 of the IMA only provides for a right to make a Withdrawal Request.  It says that there is no obligation on the respondent to repay any amount to the applicant unless and until the condition precedents for Completion found in clause 6.3 are met.
4. [35]
   The respondent submits that the applicant ignores the express terms of clause 6.3 of the IMA and the two pre-conditions to the triggering of the respondent’s express obligation to pay out to the applicant.
5. [36]
   The respondent submits that the construction advanced by the applicant is strained and uncommercial.  In this respect, it says that if the applicant’s construction were accepted it would result in the applicant being permitted to withdraw the whole of the Investment Amount after 18 months, which would thereby deprive the respondent of an entitlement to recover the Management Fees and Management Expenses, which do not become due and payable until Completion of the relevant Investment Option, which here is 4 years and 1 day at the earliest.  In that regard, the definition in clause 1.1 of Adjusted Investment Amount and the definition of Completion Date in clauses 1.1 and 6.2 are referred to by the respondent.

1. [37]
   Further, it says that the applicant’s construction would result in the sufficient liquidity requirement contained in clause 6.3(b) being circumvented in the case of an early Withdrawal Request before Completion.  The respondent says that it would be uncommercial to construe the sufficient liquidity clause as operating only for the later time period, and not for the earlier time period in which a Withdrawal Request may be made.  
2. [38]
   The respondent says that it is evident that the parties contemplated that the investments made by the respondent under the IMA would not be readily realisable, and it would go against the text, context and purpose of the IMA for the sufficient liquidity requirement to be inoperative when the applicant served a Withdrawal Request under clause 6.1(a).  The respondent’s reference to what can be invested in is based on the identified industry information or specific country information in Schedule 4 and the content of clause 7.1(f).
3. [39]
   The respondent says further that the construction contended for by the applicant is inconsistent with the express terms of the IMA, including clause 7.1(d) of the IMA.
4. [40]
   The respondent contends that on the proper construction of the IMA, the obligation to meet a Withdrawal Request only arises on Completion.  Pursuant to clause 6.3, the respondent contends that Completion requires both the valid receipt of a Withdrawal Request and the meeting of the sufficient liquidity requirement in clause 6.3(b).
5. [41]
   When pressed as to why the bifurcated concepts of Investment and Adjusted Investment Amount were present in clause 2, the respondent could not identify an explanation. What the respondent did submit was that the word “Investment” in clause 2 was not a reference to the Investment Amount.  The respondent says that clause 2 does not specify the return of the Investment Amount. In part, this was said to be by reference to the language of clause 6.3(b) which refers only to the Adjusted Investment Amount.  The respondent says that what the applicant was entitled to on Completion was only the Adjusted Investment Amount, as opposed to a return of the Investment Amount or the Nominal Principal Investment Amount.

1. (iii)
   Resolution of the first contention

1. [42]
   This contention has a number of distinct parts. 
2. [43]
   Dealing with the first part of the contention, I find that on the proper construction of the IMA, the making of a Withdrawal Request after the Minimum Withdrawal Timeframe (being 18 months), and prior to the expiry of the Minimum Investment Timeframe (being 4 years), does not give rise to a right to repayment of the Nominal Principal Investment Amount immediately or within a reasonable period.  My conclusion on this part of the contention is on the following bases.
3. [44]
   First, clause 2 of the IMA does not contain an express obligation to repay either the Investment or the Adjusted Investment Amount.  Clause 2 is concerned with identifying the term of the IMA.  
4. [45]
   As part of the identification of the term of the IMA, clause 2 contemplates that the IMA continues until the client is entitled to make a proper request for the withdrawal and the return of their Investment or Adjusted Investment Amount, and the Investment Manager has returned the Investment or Adjusted Investment Amount to the Client.  Clauses 2(a) and 2(b) are identifying factual events, namely the making of a proper request and then the return of the identified things.  Implicit to the notion of the return of certain monies is an obligation to repay, however that obligation is not expressly stated in this clause.  Such an obligation will need to be found either in another express term or by way of an implied term.
5. [46]
   Secondly, it is accurate to observe that clause 2 does expressly refer to two different concepts, namely the Investment on the one part, and the Adjusted Investment Amount on the other part.  Indeed, it does so twice.
6. [47]
   Thirdly, clause 6.1 operates to identify when a Withdrawal Request can be made.  It identifies that a Withdrawal Request can be made after two separate dates.  The first date is the expiry of the Minimum Withdrawal Request Timeframe.  Pursuant to Schedule 4 of the IMA, that is after 18 months.  The second date is the expiry of the Minimum Investment Timeframe.  Pursuant to Schedule 4 of the IMA, that is after 4 years.  
7. [48]
   Clause 6.1 read with clause 2 also contemplates that a Withdrawal Request can be made for the return of the Investment or Adjusted Investment Amount.  
8. [49]
   Fourthly, I do not accept the applicant’s submission that only the Investment may be the subject of a Withdrawal Request that can be made after 18 months but before  4 years.  There is nothing in the IMA which requires the Withdrawal Request to specify an exact monetary figure.  All that a Client needs to do is request the return of the Investment or Adjusted Investment Amount, as may be appropriate in light of the particular Investment Option which has been chosen. Whether the Adjusted Investment Amount is ascertainable at a particular time is irrelevant to a request being valid.
9. [50]
   Fifthly, clause 6.1 also does not contain an express obligation to repay the subject matter of any request.  More generally, no express obligation to make a repayment of anything prior to the expiry of the Minimum Investment Timeframe has been identified  in the IMA by the parties.  Further, there are provisions in the IMA which are inconsistent with an implied obligation to repay anything during the period prior to the expiry of the 4 year Minimum Investment Timeframe.  
10. [51]
    The most obvious such provision is clause 7.1(d).  Clause 7.1(d) provides, inter alia, to the effect that the Client acknowledges and confirms that the Investment Amount:

1. (a)
   will be invested for at least the Minimum Investment Timeframe; and
2. (b)
   will not be accessible by the Client during the “Minimum Timeframe” and until a Withdrawal Request is made.

1. [52]
   Clause 7.1(d)(ii) uses the capitalised words “the Minimum Timeframe” as if they are a defined term in the IMA.  They are not.  The use of the words “Minimum Timeframe” in clause 7.1(d)(ii) is best regarded as a reference to the defined term Minimum Investment Timeframe, and not the defined term Minimum Withdrawal Request Timeframe.  This is so in my view:

1. (a)
   because of the consistent use of the phrase, “Minimum Investment Timeframe” in the first two parts of clause 7(d); and
2. (b)
   because such a construction of 7.1(d)(ii) sits consistently with the content of clause 7.1(d)(i).

If the Investment Amount will be invested for at least the Minimum Investment Timeframe, it is consistent and logical that the Investment Amount will not be accessible by the Client during the same timeframe.

1. [53]
   Interpreted this way, clause 7.1(d) would preclude the implication of an obligation to return the Investment prior to the expiry of the Minimum Investment Timeframe, which is 4 years.  The content of clause 7.1(d) by itself disposes of the first part of the applicant’s contention.  In any event, this conclusion is further supported by other parts of the IMA.
2. [54]
   The operation of clause 7.1(d) sits consistently with the content of Schedule 3 of the IMA, and in particular the relevant content which concerns the Guaranteed Investment Option.  In the Guaranteed Investment Option table within Schedule 3 and in the second column under the word “Description”, the IMA provides that the respondent will invest the Investment Amount in the Investment Opportunity for at least the Minimum Investment Timeframe nominated in Schedule 4.  On the same page under the words, “Adjusted Investment Amount”, the IMA provides that upon the completion^[2] of the investment activity, the respondent will return the Investment Amount.  Critically, this part of the Schedule provides an express obligation to return the Investment Amount. 
3. [55]
   This express obligation to return the Investment Amount is then reinforced by Schedule 4.  In Schedule 4, the Minimum Investment Timeframe is identified as  4 years from the date of receipt of the Nominal Principal Investment Amount.  It then provides as follows, “The timeframe for return of funds is 30 days.”  
4. [56]
   Clause 7.1(d), Schedule 3 and Schedule 4 read together contemplate that for the Guarantee Investment Option which has been entered into, the obligation to return the Investment Amount will only accrue on a date after the Minimum Investment Timeframe of 4 years.

1. [57]
   Sixthly, the reference in clause 2 of the IMA to a Withdrawal Request in respect of their Investment or Adjusted Investment Amount is explicable in light of the wording in Schedule 3. For the Capital Growth Investment Option in Schedule 3, what is to be returned on completion of the investment is identified as the “Adjusted Investment Amount”. In contrast, for the Guaranteed Investment Option in Schedule 3, what is to be returned on completion of the investment activity is the “Investment Amount”. Whist I note that the reference to the return of the “Investment Amount” in the last column of the Guarantee Investment Option table appears under a heading, “Adjusted Investment Amount”, that heading should be regarded as an error in drafting.  The heading is not a de facto definition provision.  Further, there are specific definitions of both Investment Amount and Adjusted Investment Amount in clause 1.1 which clearly provide that they are intended to be quite different things.  Those specific definitions are then used deliberately in both the body of the IMA and the Schedules.
2. [58]
   The  existence of the obligations to return different things as expressed in Schedule 3 provides an explanation for the use of the bifurcated concepts of “Investment” and “Adjusted Investment Amount” in clause 2.  What a Client will have returned on a Withdrawal Request for a Guaranteed Investment Option will be the Investment Amount.  For the Capital Growth Investment Option, a client will have returned the Adjusted Investment Amount.  Reading clause 2 with Schedule 3 and Schedule 4, the reference in clause 2 to their Investment should be read as a reference to the Investment Amount.  I reject the submission of the respondent to the contrary.  

1. [59]
   Accordingly, whilst a Withdrawal Request can be made 18 months after the payment of the Investment Amount, the earliest obligation to return the Investment Amount pursuant to the IMA will be after 4 years and within 30 days following the request.
2. [60]
   A possibly commercial purpose for allowing for a Minimum Withdrawal Request Timeframe of 18 months would be to give early notice that the investment activity is to end at the expiry of the 4 year Minimum Investment Timeframe.
3. [61]
   The reasoning above only resolves the first part of the contention.
4. [62]
   The second part of the contention arises as follows.  Counsel for the applicant, when questioned about the application of clause 7.1(d), made an alternative submission that a Withdrawal Request in respect of the Nominal Principal Investment Amount made after 18 months but before 4 years will still give rise to at least an obligation to pay the Nominal Principal Investment Amount after the end of the 4 year period.  That submission, in effect, carried with it the further submission that clause 6.3(b) still has no operation in respect of such an obligation to repay the Nominal Principal Investment Amount. This is because clause 6.3(b) is only concerned with the return of an Adjusted Investment Amount.
5. [63]
   The first portion of this part of the contention may readily be accepted in light of the analysis of the IMA previously set out.  I find that after the expiry of the 18 month period and prior to the expiry of the 4 year period, the applicant could, and in this case did, make a valid Withdrawal Request for what was identified in Schedule 3 as being the Investment Amount.  Investment Amount is defined in clause 1.1 to mean

the applicant’s Nominal Principal Investment Amount which in turn is identified in Schedule 4 as being $1 million.

1. [64]
   The applicant’s Withdrawal Request of 5 April 2022 was made after 18 months and before 4 years.  It was a document in writing, signed by the agent of the applicant which provided, inter alia, as follows:

“Our Client hereby gives formal notice for a withdrawal of her Nominal Principal Investment Amount of AU$1,000,000.00 in terms of clause 6.1 of the IMA.”

1. [65]
   The use of the words Nominal Principal Investment Amount rather than Investment Amount is irrelevant to the validity of the request.  The two sets of words mean the same thing under the IMA.
2. [66]
   The second portion of this part of the contention is whether clause 6.3(b) has any operative effect where the Withdrawal Request is one made for the Investment Amount.  In respect of this portion of the contention, I find that on the proper construction of the IMA, clause 6.3(b) does not have an operative effect in relation to a valid Withdrawal Request for the Investment Amount.  The bases for this conclusion are as follows.
3. [67]
   First, clause 6.3(b) and clause 6.3(c) are both dealing with a circumstance where what is to be returned is the Adjusted Investment Amount.  They relevantly provide as follows:

2. “6.3Completion

Completion of the Investment Option will occur:

…

1. (b)
   the Investment Manager has sufficient liquidity to return the Adjusted Investment Amount; and
2. (c)
   the Investment Manager has paid the Adjusted Investment Amount to the Client as directed by the Client.”

1. [68]
   It is only the Capital Growth Investment Option (or an equivalent part of a Hybrid Investment Option) that gives rise to an obligation to return an Adjusted Investment Amount.
2. [69]
   Clause 1.1 provides that Adjusted Investment Amount means, in relation to an Investment Option at the Completion Date, the net present value of the Investment Amount, less any Management Fees and Management Expenses.  Whilst poorly worded, the reference to net present value of the Investment Amount evidently means the then monetary value of the thing in which the Investment Amount has been invested in.  
3. [70]
   That construction is fortified by reference to Schedule 3 where the Schedule deals with the Capital Growth Investment Option.  In the column headed, “Calculation of Management Fees” it effectively identifies that if there is a return above the Investment Amount, on Completion, then 50 per cent of that return is the Management Fee.  It also identifies that if on Completion there is no return greater than the Investment Amount then there will be no amount payable in relation to Management Fees.  In short, and consistent with the notion of a Capital Growth Investment Option, there is the possibility that the Client might share in a part of any growth component of an underlying investment. However, embedded in the definition of Adjusted Investment Amount is the concept that if an underlying investment does worse than the Investment Amount, the Client will bear the loss in full.

1. [71]
   The risk that the Capital Growth Investment Option may produce a monetary result less than the Investment Amount is also consistent with clauses 7.1(a), 7.1(b) and 7.1(e) of the IMA.  Those clauses have the Client acknowledge and confirm that the Investment Amount is invested at the sole risk of the Client, that there is risk of some or all of the Investment Amount being lost as a result of the Nominated Investment Option, and the Investment Manager does not provide any guarantee in relation to the performance of the Investment Option selected by the Client, or at all, or the likelihood or any return on the Investment Amount through payment of a distribution, capital growth or otherwise.  Each of those clauses is consistent with the provision of protection for the respondent in respect of an Investment Option which may result in the return of an amount of money less than the Investment Amount as a consequence of a poor performance of an underlying investment.
2. [72]
   The meaning of the defined words Adjusted Investment Amount is to be contrasted to the meaning of the defined words Investment Amount.  The Investment Amount means the Client’s Nominal Principal Investment Amount identified in Schedule 4, which in this case is $1 million.  It can be immediately seen that the definition of Investment Amount is referring in an emphatic way to that monetary amount of  $1 million, as opposed to language which refers to the value of an underlying investment at any particular time, such as the language which is used in the definition of Adjusted Investment Amount. 
3. [73]
   Schedule 3, in relation to the Guaranteed Investment Option, expressly provides that what is to be returned at the relevant time is the Investment Amount, namely the  $1 million.
4. [74]
   This construction is reinforced in the Calculation of Management Fees column for the Guaranteed Investment Obligation in Schedule 3.  In effect, what seems to be intended by that calculation is that any growth in the underlying investment is to be wholly taken by the respondent as Management Fees. It seeks to do this by expressing the calculation for the Management Fee as follows: 100 per cent of the value of the Adjusted Investment Amount, less the Original Investment Amount.  I acknowledge that that articulated calculation methodology has a logical flaw.  This is because the definition of Adjusted Investment Amount itself uses the deduction of Management Fees as part of its own calculation.  The literal interpretation of Adjusted Investment Amount in Schedule 3 cannot be what was intended.  The appropriate commercial interpretation would be that the reference to Adjusted Investment Amount in this part of the Schedule would exclude the reference to Management Fees in its definition.  The obvious intent of that part of the Schedule is to provide that under the Guarantee Investment Option the Client gets no return.
5. [75]
   What the Client does receive under the Guaranteed Investment Option is their Investment Amount back (in this case, $1 million) at the end of the period.  The commercial benefit for the Client is presumably that in providing their $1 million to the respondent for 4 years for the purpose of the investment in Software Technology/Australian Venture Capital, the Client may possibly have satisfied a condition of the sub-class 132B Visa.

1. [76]
   The obligation to return the Investment Amount is consistent with this option being described in Schedule 3 as “guaranteed”.
2. [77]
   This construction can also sit consistently with clauses 7.1(a), 7.1(b) and 7.1(e), which were discussed above in relation to the Adjusted Investment Amount.  Those clauses are concerned with risks associated with an Investment Option which may return less than the Investment Amount. Those risks are relevant to a Capital Growth Investment Option and a Hybrid Investment Option. However, these clauses effectively have no relevant operation in respect of a Guaranteed Investment Option.  This is because what is to be returned is the Investment Amount, irrespective of the performance of the underlying investment which has been made.  The risk which these clauses are seeking to protect against simply does not arise for the Guaranteed Investment Option.
3. [78]
   Once the critical distinction between what is to be returned under the respective Investment Options is appreciated, it is clear that clauses 6.3(b) and 6.3(c) are not operative in relation to the obligation to return the Investment Amount.  Those clauses are only concerned with the return of the Adjusted Investment Amount, which is not what is returned under the Guaranteed Investment Option.  
4. [79]
   To the extent the respondent submits that this is uncommercial construction, that submission should be rejected.
5. [80]
   The words Adjusted Investment Amount are defined in clause 1.1.  The parties have chosen to confine clauses 6.3(b) and 6.3(c) to that defined concept.  In this way, they have confined the operation of the sufficient liquidity clause to the form of Investment Option which is directly linked to the success or failure of the underlying investment.  It could not be said that such a construction results in a commercial nonsense or works a commercial inconvenience. 
6. [81]
   On the contrary, the respondent’s construction that only the Adjusted Investment Amount may be the subject of a Withdrawal Notice and only the Adjusted Investment Amount can be returned, is untenable. That construction cannot be reconciled with the content of Schedules 3 and 4, which clearly provide for the return of the Investment Amount for a Guaranteed Investment Option.
7. [82]
   Construing clause 6.3 in this way does not create any problems with the respondent receiving its Management Fees and any Management Expenses.  Clause 5.2 (a) makes clear that they accrue until the Investment Amount has been returned.  The meaning of Completion for a Guarantee Investment Option can be determined simply by reference to clause 6.3(a), namely, it will occur after receipt of a Withdrawal Request by the Investment Manager.  This could mean on the date of receipt of the request.  However, the better commercial construction is that it is a reference to a date after receipt of the request when the Investment is payable pursuant to clauses 2 and 6.1, and read with Schedules 3 and 4.  Pursuant to the IMA, that will be 4 years and  30 days at the earliest.  Such a date is after the Withdrawal Request will have been received such that clause 6.3(a) is satisfied.

Conclusion

1. [83]
   Accordingly, on the proper construction of the IMA, the Withdrawal Request made by the applicant on 5 April 2022 gave rise to an obligation on the respondent to return the Investment Amount, being $1 million, within 30 days of 7 August 2022. That obligation was not subject to the sufficient liquidity requirement contained in clause 6.3(b) of the IMA.
2. [84]
   The resolution of the first contention in favour of the applicant makes the resolution of the Second Contention and the Third Contention unnecessary in the circumstances.
3. [85]
   I will hear the parties as to the form of the order which flows from this determination.  It would seem that the applicant is entitled to the declaration and order she has sought, but given the unusual way the parties have argued the proceeding, I will hear submissions as to exactly what the order should be.
4. [86]
   I will also hear the parties on costs.