In the matter of Ardent Leisure Limited trading as Ardent Leisure Limited; Ardent Leisure Management Limited in its capacity as the responsible entity of the Ardent Leisure Trust [2018] NSWSC 1665
Hearing dates:
9 October 2018
Decision date:
01 November 2018
Jurisdiction:
Equity - Corporations List
Before:
Black J
Decision:
The Court makes orders under s 411 of the Corporations Act 2001 (Cth) convening meeting of ALL members to consider and, if thought fit, approve scheme of arrangement. The Court gives judicial advice under s 63 of the Trustee Act 1925 (NSW) that ALML as the responsible entity of the Trust is justified in convening a meeting of unitholders to implement a corresponding scheme and proceeding on the basis that amendments to the Trust constitution are within the powers of alteration conferred by that document and s 601GC of the Corporations Act.
Catchwords:
CORPORATIONS – arrangements and reconstructions – schemes of arrangement or compromise – application under s 411 of the Corporations Act 2001 (Cth) for orders convening meeting of members to consider and, if thought fit, approve proposed scheme of arrangement – whether requirements to order scheme meetings are satisfied.
CORPORATIONS – managed investments – application for judicial advice by responsible entity under s 63 of the Trustee Act 1925 (NSW) – whether responsible entity would be justified in convening a meeting of unitholders to approve an amendment to the trust constitution to give effect to a proposed scheme – whether proposed amendments are within the powers of alteration conferred by the constitution of the managed investment scheme and s 601GC of the Corporations Act.
[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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AGLC
Re Ardent Leisure Ltd [2018] NSWSC 1665
Case
[2018] NSWSC 1665
Decision Date
CaseChat Overview and Summary
Ardent Leisure Ltd sought orders convening a meeting of its members to consider and, if thought fit, approve a proposed scheme of arrangement under section 411 of the Corporations Act 2001. The court was also asked to provide judicial advice under section 63 of the Trustee Act 1925 to the responsible entity of a managed investment scheme, determining whether it would be justified in convening a meeting of unitholders to approve an amendment to the trust constitution in line with a proposed scheme. The central legal issues were whether the requirements to order scheme meetings were met and whether the proposed amendments fell within the powers of alteration conferred by the trust constitution and section 601GC of the Corporations Act.
The court examined whether the company had satisfied the statutory prerequisites for convening a meeting under section 411. It considered whether the proposal was in the best interests of the company and its members, and if the information provided to members was adequate. Regarding the judicial advice for the managed investment scheme, the court assessed whether the proposed amendments to the trust constitution were within the powers of alteration granted by the constitution and section 601GC. This involved interpreting the scope of the powers and assessing if the amendments aligned with the original purpose of the trust.
After careful consideration, the court found that Ardent Leisure Ltd had satisfied the requirements to order a scheme meeting. The court was satisfied that the proposal was in the best interests of the company and its members and that the information provided was adequate. Regarding the judicial advice, the court concluded that the proposed amendments were within the powers of alteration conferred by the trust constitution and section 601GC. Consequently, the responsible entity was justified in convening a meeting of unitholders to approve the amendments.
The court ordered the convening of a meeting of Ardent Leisure Ltd's members to consider and, if thought fit, approve the proposed scheme of arrangement. Additionally, it advised the responsible entity of the managed investment scheme that it would be justified in convening a meeting of unitholders to approve the proposed amendments to the trust constitution.