Fiducian Portfolio Services Ltd v Fiducian Investment Management Services Ltd (No 2)

Fiducian Portfolio Services Limited brought an application for approval of a scheme of arrangement involving the transfer of its business to two new entities, Fiducian Services Pty Limited and Fiducian Investment Management Services Limited. The application was heard in the Federal Court of Australia. The primary legal issue was whether the court had the power under section 413(1) of the Corporations Act 2001 (Cth) to make orders that would transfer separate parts of the property and liabilities of the transferor body to separate transferees, as proposed in the scheme. The court also had to determine whether such orders should be made as a matter of discretion.

The court found that section 413(1) of the Corporations Act did support the making of orders in respect of the transfer of separate parts of the property and liabilities of a transferor body to separate transferees. The court reasoned that the purpose of section 413(1) was to enable the court to make any order it considers appropriate in connection with a scheme, and that the proposed transfer arrangement fell within this broad power. The court also found that the proposed orders were in the best interests of the company and its members, as they would allow the company to effectively restructure and continue its business operations. Therefore, the court exercised its discretion to make the proposed orders.

The court approved the scheme of arrangement and made orders transferring the property and liabilities of Fiducian Portfolio Services Limited to the two new entities as proposed. The orders also included provisions for the amendment of contracts, the continuation of legal proceedings, and exemptions from certain compliance requirements. The court noted that the approval of the scheme was necessary for the new entities to qualify for an exemption from registration requirements under the U.S. Securities Act of 1933. The orders were entered forthwith, and liberty was reserved for any consequential orders as may be considered necessary or desirable.