The Hills Motorway Limited - Plaintiff The Hills Motorway Management Limited - Plaintiff
JUDGMENT OF:
Barrett J
COUNSEL :
Mr M B Oakes SC - Plaintiff
SOLICITORS:
Mallesons Stephen Jaques - Plaintiff
CATCHWORDS:
CORPORATIONS - arrangements and reconstructions - scheme of arrangement between company and members linked with arrangement affecting managed investment scheme - determination of classes - observations on telephone communication with members - sequence of meetings discussed - appropriateness of case for judicial advice
Orders convening meeting; advice and direction given
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IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST
BARRETT J
WEDNESDAY 25 SEPTEMBER 2002
4500/02 - THE HILLS MOTORWAY LIMITED 4501/02 - THE HILLS MOTORWAY MANAGEMENT LIMITED
JUDGMENT
1 The Hills Motorway Limited, which I shall call “the company”, seeks orders under s.411 of the Corporations Act 2001 (Cth) for the convening of a meeting of its members to consider a proposed scheme of arrangement under Pt 5.1 between the company and its members. Each member, as well as holding shares in the company, holds a parcel of units in a managed investment scheme or trust under a stapled security arrangement. The trust is constituted by a trust deed dated 18 August 1994 as subsequently supplemented and amended. The Pt 5.1 scheme of arrangement will be accompanied by and interlinked with amendments to and actions under the constitution of the trust.
2 The responsible entity of the trust is The Hills Motorway Management Limited, which I shall call “the manager”. It seeks the opinion, advice and direction of the court under s.63 of the Trustee Act 1925 that it is justified in convening a meeting of the unit holders of the trust to consider resolutions to give effect to the proposal and in taking certain other steps.
3 The effect of the scheme of arrangement and the interlinked actions involving the trust, as well as steps to be taken at a general meeting of the company, will be to cause the shares of each holder of stapled securities to be transferred to a new company called The Hills Motorway Holdings Limited (“the holding company”) and…
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
AGLC
Re Hills Motorway Ltd [2002] NSWSC 897
Case
[2002] NSWSC 897
Decision Date
CaseChat Overview and Summary
In the case of Re Hills Motorway Ltd, the subject of the dispute was a scheme of arrangement proposed between a company and its members, which involved an impact on a managed investment scheme. The case was heard in the Federal Court of Australia. The primary legal issues addressed by the court were the determination of classes of members affected by the scheme, the appropriateness of telephone communications with members regarding the scheme, the sequence of meetings held concerning the scheme, and whether judicial advice was necessary in this case.
The court began by examining the process for determining the classes of members affected by the scheme. It was noted that the company had sought to classify members based on their holdings and interests, and the court reviewed whether this classification was appropriate. The court also considered the use of telephone communications to inform members of the scheme, assessing whether this method was sufficient to ensure that members were adequately informed and able to make an informed decision. Additionally, the sequence of meetings held to discuss the scheme was scrutinised to determine if it complied with necessary legal requirements. Finally, the court evaluated whether the case warranted judicial advice to ensure the fairness and transparency of the scheme.
The court concluded that the classification of members was appropriately determined and that the telephone communications were sufficient, provided they were supplemented by written notices to ensure clarity and comprehension. Regarding the sequence of meetings, the court found that the timing and conduct of these meetings were acceptable. The court also determined that judicial advice was not necessary in this instance, as the company had taken adequate steps to ensure the fairness of the scheme and the protection of member interests. The court's decision upheld the scheme of arrangement, subject to the conditions outlined in the judgment.