Re Australand Holdings Limited - [2005] NSWSC 835

Reported Decision:
54 ACSR 687

New South Wales

Supreme Court

CITATION:
Australand Holdings Limited, Australand Property Limited, Australand Wholesale Investments Limited, Australand Wholesale Investments Limited [2005] NSWSC 835
This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S): 18/08/05

JUDGMENT DATE :

18 August 2005

JURISDICTION:
Equity Division
Corporations List

JUDGMENT OF:
Barrett J

DECISION:
Orders for convening of meeting of members of company to consider scheme of arrangement. Orders that responsible entities of managed investment schemes justified in convening meetings of members of schemes

CATCHWORDS:
CORPORATIONS - managed investment schemes - merger proposal involving stapling of units of two managed investment schemes to existing stapled securities each consisting of a share in a company and a unit of a managed investment scheme - applications for judicial advice by responsible entities of the three managed investment schemes and for convening of scheme meeting of members of company - exporpriation of all existing units in both of the managed investment schemes to be added - applicability of Gambotto principles - contracts to give effect to arrangement - same company as responsible entity of the two managed investment schemes to be added - whether it may contract with itself in different capacities - voting rights of holders of interests in managed investment scheme - whether such interests "quoted" as referred to in s.253F(a) when stapled securities of which they form part are quoted on financial market

LEGISLATION CITED:
Corporations Act 2001 (Cth), ss.9, 253F, 411(1)
Trustee Act 1925, s.63

CASES CITED:
Arakella Pty Ltd v Paton (2004) 60 NSWLR 334
Cachia v Westpac Financial Services Ltd (2000) 170 ALR 65
Cinema Plus Ltd v Australia and New Zealand Banking Group Ltd (2000) 49 NSWLR 513
F.T. Eastment & Sons Pty Ltd v Metal Roof Decking Supplies Pty Ltd (1977) 3 ACLR 69
Gambotto v WCP Limited (1995) 182 CLR 432
Gulland v Federal Commissioner of Taxation (1983) 72 FLR 362
Heydon v NRMA Ltd (2000) 51 NSWLR 1
Public Trustee v Meyer [1931] WN (Eng) 271
Re HIH Casualty & General Insurance Ltd (2005) 53 ACSR 12
Re Mirvac Ltd (1999) 32 ACSR 107
Walker v Romano [2002] NSWSC 1026
Winpar Holdings Ltd v Goldfields Kalgoorlie Ltd (2000) 157 FLR 59

PARTIES:
Australand Holdings Limited - Plaintiff
Australand Property Limited - Plaintiff
Australand Wholesale Investments Limited - Plaintiff
Australand Wholesale Investments Limited - Plaintiff

FILE NUMBER(S):
SC 4293/05; 4294/05; 4295/05; 4296/05

COUNSEL:
Mr I.M. Jackman SC - Plaintiffs

SOLICITORS:
Mallesons Stephen Jaques - Plaintiffs

LOWER COURT JURISDICTION:

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

BARRETT J

THURSDAY, 18 AUGUST 2005

4293/05 - AUSTRALAND HOLDINGS LIMITED
4294/05 - AUSTRALAND PROPERTY LIMITED
4295/05 - AUSTRALAND WHOLESALE INVESTMENTS LIMITED
4296/05 - AUSTRALAND WHOLESALE INVESTMENTS LIMITED

JUDGMENT

1 Australand Holdings Limited, which I shall call “AHL”, seeks an order under s.411(1) of the Corporations Act 2001 (Cth) that a meeting of its ordinary shareholders be convened for the purpose of considering…

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: [2005] NSWSC 835
Decision Date: 18 August 2005

CaseChat Overview and Summary

The case involved Australand Holdings Limited, along with other parties including the responsible entities of three managed investment schemes. The dispute arose from a merger proposal that involved the stapling of units from two managed investment schemes to existing stapled securities, each consisting of a share in a company and a unit of a managed investment scheme. The responsible entities sought judicial advice and the convening of a scheme meeting to approve the merger. A key issue was the expropriation of all existing units in both managed investment schemes to be added to the stapled securities.

The court had to determine whether the principles established in the Gambotto case applied to the expropriation of the units. It also had to consider whether the company, acting as the responsible entity of the two managed investment schemes, could validly contract with itself in different capacities. Additionally, the court examined whether the interests held by members of the managed investment schemes were considered "quoted" as defined in section 253F(a) when the stapled securities of which they form part are quoted on a financial market.

The court ruled that the Gambotto principles applied, and the expropriation of the units was invalid unless approved by the relevant scheme members. It found that the company could contract with itself in different capacities, provided it acted fairly and in good faith. The court also concluded that the interests in the managed investment schemes were not "quoted" as they were not traded on a financial market. The court's decision provided clarity on the application of these principles to managed investment schemes and the rights of members in such schemes.

Orders