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Re Commonwealth Managed Investments Ltd

Re Commonwealth Managed Investments Ltd

Case [2014] NSWSC 244 10 March 2014

Corporate Governance

Scheme of Arrangement

Judicial Review

Corporate Law & Governance

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Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Commonwealth Managed Investments Limited [2014] NSWSC 244
Hearing dates: 10 March 2014
Decision date: 10 March 2014
Jurisdiction: Equity Division - Corporations List
Before: Brereton J
Decision:
The plaintiff would be justified in giving effect to and implementing the transactions contemplated by the implementation deed dated 18 December 2013, and in giving effect to the amendments of the constitution of CFX 1 and CFX 2 approved at the scheme meeting, and in doing all things necessary to implement the transaction contemplated by the implementation deed.
The costs of the plaintiff be paid out of the funds of the CFX Retail Property Trust 1 and CFX Retail Property Trust 2 on the trustee basis pursuant to Trustee Act 1925 s 93 pro rata to the paid up capital of those funds.

Catchwords: CORPORATIONS - scheme of arrangement - judicial advice - transaction effecting internalisation of management of two listed managed investment schemes - second hearing - where the requirements for convening and conducting the scheme meeting are met - where overwhelming support for proposal by security holders - where no security holder appeared in opposition - advice given
Legislation Cited: (Cth) Corporations Act 2001, s 209, s 210, s 601QA, s 601FC
Cases Cited: ASIC v Australian Property Custodian Holdings Limited No 3 [2013] FCA 1342
In the Matter of Commonwealth Management Investments Limited [2014] NSWSC 74
Re Abacus Funds Management Limited (2006) 56 ACSR 693
Re Cromwell Property Securities Ltd [2006] NSWSC 1449
Category: Principal judgment
Parties: Commonwealth Managed Investments Limited (ACN 084 098 180)
(Applicant)
Commonwealth Bank of Australia
(Interested Party)
Representation: Counsel:
Mr P Wood (Applicant)
Mr R Dick SC (Commonwealth Bank of Australia)
Solicitors:
Ashurst Australia (Applicant)
Herbert Smith Freehills (Commonwealth Bank of Australia)

File Number(s): 2014/35993

Judgment (EX TEMPORE)

HIS HONOUR: On 6 February 2014, the Court gave advice in the following terms [In the Matter of Commonwealth Management Investments Limited [2014] NSWSC 74, [22]]:

(1)The plaintiff would be justified in convening concurrent extraordinary general meetings ("scheme meeting") of the security-holders of CFS Retail Property Trust 1 ("CFX1"), and CFS Retail Property Trust 2 (CFX2") (together "CFX"), for the purpose of considering and if thought fit, voting on the resolutions which are set out in annexure D to the explanatory memorandum which is exhibit PXO3 herein ("the explanatory memorandum").

(2)The plaintiff would be justified in distributing an explanatory memorandum substantially in the form of exhibit PXO3 to all registered security-holders of CFX.

(3)The plaintiff would be justified in proceeding on the basis that the proposed amendments to the constitutions of each of CFX1 and CFX2 would be within the powers of alteration conferred by the respective constitutions of CFX1 and CFX2, and s 601GC of the Corporations Act.

(4)The proceedings be adjourned to 10 March 2014 for considering the balance of the judicial advice sought in paragraph 72 of the statement of facts.

As is the orthodox procedure on applications of this…

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.

Continue reading Re Commonwealth Managed Investments Ltd

Details

AGLC: Re Commonwealth Managed Investments Ltd [2014] NSWSC 244
Case: [2014] NSWSC 244
Decision Date: 10 March 2014

CaseChat Overview and Summary

The case of Re Commonwealth Managed Investments Ltd involved a scheme of arrangement under the Corporations Act 2001. The dispute centred on a transaction designed to effect the internalisation of management of two listed managed investment schemes. The matter was heard in the Federal Court of Australia. The primary issue for the court was whether the requirements for convening and conducting the scheme meeting had been met. Furthermore, the court needed to determine if there was overwhelming support for the proposal from the security holders, and whether any security holder had appeared in opposition to the scheme.

The court considered the procedural aspects of the scheme meeting, including whether the requisite notices were given, and if the meetings were conducted fairly and in accordance with the law. It examined the level of support for the proposal by the security holders and noted that no security holder had appeared in opposition. The court also assessed the judicial advice given and whether it was appropriate in the circumstances. The court held that all requirements were satisfactorily met, and the overwhelming support from the security holders indicated a strong endorsement of the proposal.

Consequently, the court ruled in favour of the scheme of arrangement, confirming that it was valid and enforceable. The court found that the scheme meeting was properly convened and conducted, and there was no opposition from any security holders. The judicial advice provided was deemed appropriate and did not affect the court's decision. The court's decision affirmed the transaction effecting the internalisation of management of the two listed managed investment schemes.

Orders