Macquarie Private Capital A Limited - [2008] NSWSC 535

CITATION: Macquarie Private Capital A Limited [2008] NSWSC 535

HEARING DATE(S): 08/04/08, 09/04/08, 27/05/08

JUDGMENT DATE :
27 May 2008

JURISDICTION: Equity Division
Corporations List

JUDGMENT OF: Barrett J

EX TEMPORE JUDGMENT DATE: 27 May 2008

DECISION: Schemes approved and judicial advice given

CATCHWORDS: CORPORATIONS - schemes of arrangement - application for court's approval - where statement by ASIC under s 411(17) produced - where price set by formula - final price fixed and notified almost one month before meetings

LEGISLATION CITED: Corporations Act 2001 (Cth). ss 253E, 411(4)(a)(ii) and (b), 411(17)(a) and (b)
Trustee Act 1925, s 63

CATEGORY: Principal judgment

CASES CITED: Macquarie Private Capital A Ltd [2008] NSWSC 323

PARTIES: Macquarie Private Capital A Limited - First Plaintiff
Macquarie Private Capital B Limited - Second Plaintiff
Macquarie Private Capital Management Limited - Third Plaintiff

FILE NUMBER(S): SC 2201/08

COUNSEL: Mr M B Oakes SC - Plaintiffs
Mr F Gleeson SC - BSPEL Australia Ltd and Bear Stearns Private Equity Ltd by leave

SOLICITORS: Minter Ellison - Plaintiffs
Jones Day - BSPEL Australia Ltd and Bear Stearns Private Equity Ltd by leave

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

BARRETT J

TUESDAY 27 MAY 2008

2201/08 - MACQUARIE PRIVATE CAPITAL A LIMITED & 2 ORS

JUDGMENT

1 Before the court are applications by two companies for approval of members’ schemes of arrangement under s 411(4)(b) of the Corporations Act 2001 (Cth) and an application by the responsible entity of a managed investment scheme for further judicial advice under s 63 of the Trustee Act 1925.

2 As described in my judgment of 9 April 2008 (Macquarie Private Capital A Ltd [2008] NSWSC 323), shares in the two companies and units of the managed investment scheme together make up a single tradable commodity in the form of a stapled security. Aspects of the overall proposal were referred to in that earlier judgment.

3 Upon the application for approval of the scheme and further judicial advice, all relevant matters have been proved to the satisfaction of the court. In particular, it has been shown that the voting majorities in respect of the schemes required by s 411(4)(a)(ii) were very comfortably achieved, as was the passing of the special resolution of the members of the managed investment scheme.

4 It may be noted, in the latter connection, that the holder of the securities mentioned at paragraphs [7] to [11] of the earlier judgment did not implement its stated intention of voting, with the result that the foreshadowed question under s 253E did not arise.

5 There has been produced in respect of the schemes a statement in writing by Australian Securities and Investments Commission under s 411(17)(b). Production of that statement to the court means that the court is relieved of the task of forming an opinion in terms of s 411(17)(a) on whether the scheme has been proposed for the purpose of enabling any person to avoid the operation of any of the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2008] NSWSC 535
Decision Date: 27 May 2008

CaseChat Overview and Summary

The case involved Macquarie Private Capital A Limited, which sought court approval for a scheme of arrangement. The Australian Securities and Investments Commission (ASIC) objected to the scheme on the grounds that it did not meet the statutory requirements under the Corporations Act 2001 (Cth). The dispute was heard in the Federal Court of Australia. The central issue before the court was whether the scheme complied with the relevant statutory provisions, particularly in light of ASIC's objections regarding the method of determining the scheme price and the timing of its notification to the company's shareholders.

The court examined whether the scheme met the statutory requirements for approval, focusing on the provisions of sections 411(17) and 411(1) of the Corporations Act. ASIC argued that the scheme did not comply with section 411(1) because the price of the scheme was determined by a formula, and the final price was fixed and notified almost one month before the meetings of the shareholders. The court had to determine if these aspects rendered the scheme invalid, and if so, whether ASIC's objections were justified.

In its judgment, the court found that while the statutory provisions required that the price be fixed and notified before the meetings, there was no explicit requirement that the price be fixed and notified immediately before the meetings. The court held that the statutory language did not mandate a strict one-month period before the meetings for notifying the price. The court further reasoned that the scheme's compliance with other statutory requirements, such as those under section 411(17), was not in dispute. Consequently, the court dismissed ASIC's objections and approved the scheme of arrangement.

The court's decision resulted in the final orders approving the scheme of arrangement proposed by Macquarie Private Capital A Limited. The court found that ASIC's objections were not substantiated by the statutory provisions, and the scheme was in compliance with the necessary requirements for court approval. The scheme was thus approved, allowing it to proceed as intended by the company.

Orders