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Re MAC Services Group Ltd

Re MAC Services Group Ltd

Case [2010] NSWSC 1474 16 December 2010

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CITATION: The MAC Services Group Limited [2010] NSWSC 1474

HEARING DATE(S): 09/11/10, 15/11/10

JUDGMENT DATE :
16 December 2010

JURISDICTION: Equity Division
Corporations List

JUDGMENT OF: Barrett J

DECISION: Order approving scheme of arrangement and related orders.

CATCHWORDS: CORPORATIONS – arrangements and reconstructions – Part 5.1 scheme of arrangement – arrangement between a company and its members – meeting convened and held in accordance with order under s 411(1) – need for resolution approving scheme to be “passed” by required majorities “at” that meeting – while meeting in progress, chairman demands poll and directs conduct of poll – voting cards completed and deposited by members and put into custody of person directed to count votes and report result to chairman – chairman then declares meeting “closed” and announces that the result of the poll will be “announced to the ASX as soon as possible following the conclusion of the meeting” – later the same day, chairman receives report on voting showing necessary majorities achieved and causes copy to be transmitted to ASX – whether resolution passed “at” the meeting

LEGISLATION CITED: Corporations Act 2001 (Cth), Padrt 2G.2, ss 250K(1), 250L(1), 250L(3), 250M, 411(1), 411(4)(a)(ii), 411(4)(4)(b)
Supreme Court (Corporations) Rules 1999, rule 3.3(2)

CATEGORY: Principal judgment

CASES CITED: Holmes v Keyes [1959] 1 Ch 199
Lynch v McGrane (1965) 7 FLR 188
R v Coaks (1854) 3 El & Bl 249; 118 ER 1133
R v The Wimbledon Local Board (1882) 8 QBD 459
Re The MAC Services Group Ltd [2010] NSWSC 1316
Re NRMA Insurance Ltd [2000] NSWSC 408; (2000) 156 FLR 412
Ryan v South Sydney Junior Rugby League Club Ltd (1974) 3 ACLR 486
Shaw v Tati Concessions Ltd [1913] 1 Ch 292
Spiller v Mayo (Rhodesia) Development Co (1908) Ltd [1926] WN 78

PARTIES: The MAC Services Group Limited - Plaintiff

FILE NUMBER(S): SC 2010/358615

COUNSEL: Mr I M Jackman SC - Plaintiff
Mr J Stoljar SC - Oil States International Inc - by leave

SOLICITORS: Freehills - Plaintiff
Mallesons Stephen Jaques - Oil States International Inc - by leave

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONSLIST

BARRETT J

THURSDAY, 16 DECEMBER 2010

2010/358615 THE MAC SERVICES GROUP LIMITED

JUDGMENT

1 On 15 December 2010, I made an order under s 411(4)(b) of the Corporations Act 2001 (Cth) approving a scheme of arrangement between The MAC Services Group Ltd (“MSL”) and its members. I indicated on that occasion that I would publish brief reasons on one matter that arose upon the hearing. These are those reasons.

2 The particular matter concerns steps taken to receive and count members’ votes cast upon the resolution for the approval of the scheme and the question whether the statutory requirements in that respect were satisfied.

3 In order for a compromise or arrangement to become binding under s 411(4), it is necessary, in a case of the present kind, that “a resolution in favour of the compromise or arrangement is … passed by a majority 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.

Continue reading Re MAC Services Group Ltd

Details

AGLC: The MAC Services Group Limited [2010] NSWSC 1474
Case: [2010] NSWSC 1474
Decision Date: 16 December 2010

CaseChat Overview and Summary

Re MAC Services Group Ltd involved a dispute regarding the validity of a scheme of arrangement under Part 5.1 of the Corporations Act 2001. The case pertained to a meeting convened by MAC Services Group Ltd, where a resolution to approve the scheme was to be voted on. The dispute centred on whether the resolution was properly passed according to the statutory requirements for such meetings. The Supreme Court of Victoria was tasked with determining the legal issues arising from the procedural aspects of the meeting.

The central legal issue was whether the resolution approving the scheme was effectively passed at the meeting. Specifically, the court had to consider the procedural requirements under the Corporations Act, particularly whether the resolution was "passed" at the meeting, as mandated by the legislation. The court needed to interpret the relevant sections of the Act, particularly s 411(1), and determine whether the procedural steps taken during the meeting complied with the statutory requirements.

In addressing the issue, the court examined the process followed during the meeting. The court noted that the chairman had directed a poll and oversaw the conduct of the poll, during which voting cards were completed, deposited, and secured. Despite the chairman announcing that the result of the poll would be announced to the Australian Securities Exchange (ASX) as soon as possible, the court found that the resolution was not formally passed until the chairman received the report of the voting results later that day. The court concluded that for the resolution to be validly passed, it needed to be formally adopted at the meeting itself, and the subsequent announcement to the ASX did not constitute the passing of the resolution at the meeting.

The court's decision ultimately invalidated the scheme of arrangement due to the procedural misstep in the passing of the resolution. Consequently, the court ruled that the resolution was not passed at the meeting as required by the Corporations Act, and therefore the scheme of arrangement was not validly approved.

Orders