Centro Retail Limited and Centro MCS Manager Limited in its capacity as Responsible Entity of Centro Retail Trust [2011] NSWSC 1321
Hearing dates:
4 November 2011
Decision date:
04 November 2011
Jurisdiction:
Equity Division - Corporations List
Before:
Barrett J
Decision:
See paragraph 17
Catchwords:
CORPORATIONS - arrangements and reconstructions - Part 5.1 scheme of arrangement - notice convening meeting and accompanying explanatory statement already sent to members - new circumstances make desirable despatch of updating material - need for court's approval - source of court's power to give approval
Orders were made on 5 October 2011 under s 411(1) of the Corporations Act2001 (Cth) for the convening of a meeting of the members of Centro Retail Limited for the purposes of considering a proposed scheme of arrangement.
A notice of meeting was subsequently despatched to members together with an explanatory memorandum in respect of which the court had granted approval under s 411(1). That section is in the following terms:
"Where a compromise or arrangement is proposed between a Part 5.1 body and its creditors or any class of them or between a Part 5.1 body and its members or any class of them, the Court may, on the application in a summary way of the body or of any creditor or member of the body, or, in the case of a body being wound up, of the liquidator, order a meeting or meetings of the creditors or class of creditors or of the members of the body or class of members to be convened in such manner, and to be held in such place or places (in this jurisdiction or elsewhere), as the Court directs and, where the Court makes such an order, the Court may approve the explanatory statement required by paragraph 412(1)(a) to accompany notices of the meeting or meetings."
The company now wishes to send further explanatory material to its members for the purposes of the meeting. The proposed new material relates to events that have occurred since 5 October 2011.
I need not go into great detail. It is sufficient to say that the company has successfully pursued negotiations for an extension of external debt facilities beyond the existing repayment date in December 2011 to dates in…
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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AGLC
Re Centro Retail Ltd [2011] NSWSC 1321
Case
[2011] NSWSC 1321
Decision Date
CaseChat Overview and Summary
The case of Re Centro Retail Ltd involved a company undergoing a scheme of arrangement under Part 5.1 of the Corporations Act. The company had already sent out notices to its members convening a meeting and providing an explanatory statement. However, new circumstances arose that made it necessary to send updated material to the members. The company sought the court's approval to do so. The court was required to determine whether it had the power to approve the despatch of the updating material.
The legal issue before the court was whether it had the authority to approve the despatch of updated material to the members in light of the new circumstances that had arisen. The court held that it did have the power to approve the despatch of the updating material. The court found that the power to do so was derived from the overarching jurisdiction of the court under section 462(1) of the Corporations Act. The court held that the power to approve the despatch of the updating material was a necessary implication of its jurisdiction to supervise the scheme of arrangement.
The court found that the circumstances of the case warranted the despatch of the updating material to the members. The court held that the new circumstances had the potential to significantly impact the members' decision-making process and that it was in the interests of justice to provide them with the updated information. The court also held that the despatch of the updating material did not amount to a variation of the scheme of arrangement and therefore did not require the approval of the court under section 411(4) of the Corporations Act.
The court approved the despatch of the updating material to the members. The court held that it had the power to do so under its overarching jurisdiction to supervise the scheme of arrangement. The court found that the new circumstances warranted the despatch of the updating material and that it was in the interests of justice to provide the members with the updated information. The court also held that the despatch of the updating material did not amount to a variation of the scheme of arrangement and therefore did not require the approval of the court under section 411(4) of the Corporations Act.