Re MAC Services Group Ltd

[2010] NSWSC 1316

Reported Decision: 80 ACSR 390

New South Wales

Supreme Court

CITATION:	The MAC Services Group Limited [2010] NSWSC 1316
HEARING DATE(S):	09/11/10
JUDGMENT DATE :	15 November 2010
JURISDICTION:	Equity Division Corporations List
JUDGMENT OF:	Barrett J
DECISION:	Orders under Corporations Act, s 411(1) for convening of meeting of members and ancillary matters.
CATCHWORDS:	CORPORATIONS - arrangements and reconstructions - scheme of arrangement between a company and all members other than acquirer and its associates - member with 52% of shares grants option to purchase 19.9% to acquirer - option exercisable in certain circumstances related to emergence of counter-proposal and bettering thereof by acquirer - whether 52% shareholder thereby set aside so as to constitute separate class of members - CORPORATIONS - members' scheme of arrangement - voting by members - whether court should by order specify members' voting rights and cut-off time for recognition of entitlements to vote - no need for court to deal with either matter - discussion of members' voting rights under Part 5.1 where the Part 5.1 body is a "company" - as to cut-off time, court should allow fixing by the company in accordance with regulations accommodating share trading and transfer system
LEGISLATION CITED:	Companies Act 1961, s 1445 Companies Act 1862 (UK) s 51 Corporations Act 2001 (Cth), Division 3 of Part 7.11, Parts 2G1, 2G.2, 5.1, ss 9, 135(1)(a), 135(2), 250E, 257B, 411, 547(3), 610, 671B, 1073A(1)(a) Corporations Regulations 2001 (Cth), regs 7.11.03(1)(a), 7.11.37 Practice Note [1934] WN (Eng) 142 Supreme Court (Corporations) Rules 1999, rule 3.3(2)
CATEGORY:	Principal judgment
CASES CITED:	Re NFU Development Trust Ltd [1972] 1 WLR 1548 Re Andean Resources Ltd [2010] FCA 1190 Re Bolsini Gold NL [2007] FCA 1668 Re CCI Holdings Ltd [2007] FCA 832 Re CSR Ltd [2010] FCAFC 34; (2010) 183 FCR 358 Re Depfa Bank plc [2007] IEHC 463 Re HIH Casualty and General Insurance Ltd [2006] NSWSC 485 Re Hostworks Group Ltd [2008] FCA 64; (2008) 26 ACLC 137 Re Mitchell Communication Group Ltd [2010] VSC 423 Re NRMA Insurance Ltd [2000] NSWSC 408; (2000) 156 FLR 412 Re Opes Prime Stockbroking Ltd [2009] FCA 813; (2009) 179 FCR 20 Re Orica Ltd [2010] VSC 231 Re People Telecom Ltd [2009] FCA 180 Re T & N Ltd (No 3) [2006] EWHC 1447 (Ch); [2007] 1 All ER 851 Re Telewest Communications plc [2004] BCC 342 UDL Argos Engineering & Heavy Industries Co Ltd v Li Oi Lin [2001] 3 HKLRD 634; [2002] 1 HKC 172
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
CORPORATIONS LIST

BARRETT J

MONDAY, 15 NOVEMBER 2010

2010/358615 THE MAC SERVICES GROUP LIMITED

JUDGMENT

Background

1 On 9 November 2010, I made orders for the convening of a meeting of members of the plaintiff (“MSL”) under s 411(1) of the Corporations Act 2001 (Cth). I indicated that I would (as I now do) publish brief reasons concerning three matters that arose for consideration upon the hearing of the application.

2 MSL is a public company registered under the Corporations Act and limited by shares. Its shares are traded on the stock market operated by the Australian Securities Exchange and are widely held, although Marley Holdings Pty Ltd (“Marley”) holds some 52% of the issued shares.

3 The application determined on 9 November 2010 related to a proposed scheme of arrangement between MSL and those of its members designated “Scheme Shareholders”, being all members other than Oil States International Inc (“OSI”), a United States corporation, and certain persons holding shares on behalf of or for the benefit of OSI or any subsidiary of OSI, including OSI-SPV, a subsidiary of OSI registered under the Corporations Act.

4 The combined effect of certain collateral documents and the scheme of arrangement, if it becomes binding on the Scheme Shareholders and on MSL, will be that the MSL shares held by all Scheme Shareholders are compulsorily transferred to OSI-SPV and those shareholders receive, in return, cash provided by OSI. The structure is one that is familiar. Evidence of the availability of the required cash and of arrangements to ensure payment was placed before the court.

The approach to the application

5 The s 411(1) application was approached according to principles recently restated in these terms by Davies J in Re Orica Ltd [2010] VSC 231 (at [7] and [8]:

“The function of the court on an application to convene a meeting essentially is:
(a) to consider whether the scheme booklet that will be provided to the shareholders sufficiently discloses the detail and effect of the scheme to enable shareholders to make an informed decision on how to vote;
(b) to consider procedural matters about the calling and conduct of the meeting;
(c) to ascertain whether the Australian Securities and Investments Commission (“ASIC”) has had reasonable opportunity to examine the proposed scheme;
(d) to consider whether there may be matters that may make it unlikely that the scheme would be capable of a grant of approval by the court if, in due course, its approval is sought and so make it futile to put the scheme to the shareholders for their vote.

It is not the function of the court on an application for a order convening a meeting to consider the business or commercial efficacy of the proposed scheme, as that is a matter for the shareholders nor is it the court’s role to express a view on whether the proposed scheme should be approved, if the requisite majority of votes is obtained. An order of the court that the meeting be convened is not an indication that the court has a view as to the merits of the scheme or as to how shareholders should vote.”

Questions arising

6 In the present case, as I have said, three particular matters arose. One arose under Davies J’s item (d) and the others under item (b).

7 The first matter (related to item (d)) was the question whether, having regard to a particular aspect of the collateral agreements, there were in reality different classes of MSL shareholders so that, in the absence of assent of each class by the requisite majority at a meeting, it will not be open to the court, in due course, to make an approving order under s 411(4)(b) if and when application for such an order is made.

8 The second issue (related to item (b)) concerned the definition of members’ voting rights for the purposes of a meeting of members convened pursuant to a s 411(1) order.

9 The third matter (also related to item (b)) concerned a cut-off time for determining members entitled to vote at the meeting.

The first matter – the option agreement

10 OSI-SPV has entered into a contract with Marley which, as I have said, owns some 52% of the shares in MSL. Marley is a “Scheme Shareholder”. The scheme of arrangement, if and when it becomes binding, will operate upon Marley in relation to its 52% shareholding.

11 Under the contract between Marley and OSI-SPV, the latter acquired an option to purchase from the former shares representing about 19.9% of MSL’s total issued share capital (or about 38% of Marley’s 52% holding). The option will become exercisable by OSI-SPV only if:

(a) some third party makes a competing proposal for the acquisition of shares in MSL; and
(b) OSI-SPV, in turn, then publicly announces a counter-proposal which the board of MSL determines in good faith is more favourable to MSL shareholders than the third party’s competing proposal.

12 Only if both those events happen will there be a short period within which it is open to OSI-SPV to exercise the call option it holds from Marley in respect of 19.9% of the shares in MSL.

13 Upon any exercise of this option by OSI-SPV, the price per share payable by OSI-SPV to Marley will be the equivalent of that provided for in OSI-SPV’s counter-proposal, that is, one must assume, a price more favourable to Marley than that contemplated by OSI-SPV’s current proposal to be put before shareholders pursuant to the orders made on 9 November 2010.

14 In summary, therefore, Marley occupies a position from which it may receive for 19.9% of the shares in MSL (out of its total holding of 52%) a cash price greater than that provided for in the scheme of arrangement proposal to which the orders of 9 November 2010 relate, but Marley will only receive that price if, among other things, OSI-SPV, faced with a third party’s competing acquisition proposal for MSL shares, has not only announced a new acquisition proposal of its own that contemplates that higher price for all Scheme Shareholders but also elected to take the 19.9% shareholding from Marley at that higher price. OSI-SPV’s ability to exercise the option to purchase from Marley is not dependent upon the ultimate success of the OSI-SPV new acquisition proposal: there need be no more than a favourable determination by the MSL board. There is thus a possibility – it is no more – that Marley will receive for 19.9% a price higher than that contemplated by the presently proposed OSI-SPV scheme of arrangement while the other Scheme Shareholders receive nothing and are left with their shares.

The first matter - decided cases

15 Counsel drew attention to several cases in which attention has been given to the question whether class-creating possibilities relevant to the operation of Part 5.1 arise from a collateral arrangement of this kind between, on the one hand, a party playing a role such as that played here by OSI-SPV and, on the other, a holder of a significant parcel of shares in the subject company.

16 Reference was made in submissions to the recent case of Re Mitchell Communication Group Ltd [2010] VSC 423 which also involved an option to purchase 19.9%. In that case, the option price per share was equivalent to that payable under the arrangement itself but the only event triggering the right to exercise was the emergence of a competing proposal. Davies J was satisfied (at [38]) that, for the purposes of convening the s 411 meeting, it was reasonable to assume that the option did not give rise to different interests that would be relevant to the class-creation question. A similar view has been stated more recently by Jagot J in Re Andean Resources Ltd [2010] FCA 1190.

17 In both these cases, there was reliance on what was said by Mansfield J in Re Hostworks Group Ltd [2008] FCA 64; (2008) 26 ACLC 137. In that case, the price per share applicable under the 19.9% option was the same as that contemplated by the Part 5.1 acquisition arrangement and, as Mansfield J put it, the option “will lapse if the scheme is not approved by Hostworks’ members or by the Court”. His Honour’s assessment of the class-creation question was as follows (at [45]):

“As the price to be paid by Broadcast Australia, if it exercises its call options over some 19% of the issued capital of Hostworks, is equivalent to the scheme consideration, and because if the scheme is not approved, those call options will lapse, in my view there is no sufficient reason to consider that the present holders of those shares should constitute a separate class for the purposes of the scheme meeting. The options do not affect the rights and obligations of those shareholders in relation to Hostworks. Those option grantors will not be advantaged or disadvantaged depending upon the outcome of the scheme in relation to other members of Hostworks. Broadcast Australia does not have the ability to exercise or to control the exercise of the votes attached to those shares in Hostworks before the exercise of the options, and effectively in practice before the meeting.”

18 On the basis of these and other decisions about preliminary options to purchase (Re CCI Holdings Ltd [2007] FCA 832, Re Bolsini Gold NL [2007] FCA 1668 and Re People Telecom Ltd [2009] FCA 180), as well as cases about preliminary arrangements to secure favourable voting by influential shareholders (Re Telewest Communications plc [2004] BCC 342; Re Depfa Bank plc [2007] IEHC 463), it was submitted that the court should not have any concern about the possibility that Marley should be considered as constituting a class distinct from all other Scheme Shareholders.

The first matter – discussion and assessment

19 Two things should be said about this submission. First, the question of classes is properly addressed by the court at the s 411(1) stage as part of item (d) in Davies J’s formulation. If, as here, a class-creating possibility is flagged by the subject company at that point, the court will deal with it as best it can on the material then before it, even though the situation is one in which submissions are received from the subject company alone (under s 411(1), it is the only competent applicant) or perhaps the applicant company and the potential acquirer. That approach is to be preferred over the previous practice (stated, in England, in Practice Note [1934] WN (Eng) 142) for the reasons explained by David Richards J in Re T & N Ltd (No 3) [2006] EWHC 1447 (Ch); [2007] 1 All ER 851 at [18] – [19]:

“Following the decision of the Court of Appeal in Re Hawk Insurance Co Ltd [2001] EWCA Civ 241, {2001] 2 BCLC 480, the practice as regards applications under s 425 to convene meetings was changed. So far as possible, issues arising on the composition of classes should be decided at that stage, rather than on the later application to sanction the scheme of arrangement if approved at the meeting(s). The revised practice is set out in the Practice Statement (companies: schemes of arrangement) [2002] 2 All ER 96, [2002] 1 WLR 1345. The responsibility as to the constitution of classes and as to the number of meetings lies with the applicant, but para 4 of the practice statement requires the applicant to draw the attention of the court as soon as possible to any issues which may arise as to the constitution of the meetings or which may otherwise affect the conduct of the meetings. Unless there are good reasons for not doing so, the applicant must also take all steps reasonably open to it to notify any person affected by the scheme of the intention to promote the scheme and of its purpose and of the proposed composition of classes. The court will, if necessary, give directions for the resolution of any such issues and in particular will hear interested parties. The practice statement concludes by stating that the court will expect any creditor who raises any such issue at the hearing to sanction the scheme to show good cause why they did not raise it at an earlier stage.

This practice is to avoid the waste of costs and court time which results if it is not until the sanction hearing that it is determined that the classes were wrongly constituted. If the classes have been wrongly constituted, the court has no jurisdiction to sanction the scheme. The purpose underlying this revised practice shows also that if there are known to be other issues which would go to the jurisdiction of the court to sanction the scheme, they too are best raised at the stage of the application to convene the meetings (see Re Savoy Hotel Ltd [1981] 3 All ER 646, [1981] Ch 351 and Re MyTravel Group plc, Fidelity Investments International plc v MyTravel Group plc [2004] EWCA Civ 1734, [2005] 2 BCLC 123). The same is true also of issues which, although not strictly going to jurisdiction, are such that they would unquestionably lead the court to refuse to sanction the scheme.”

20 The current Australian practice is the same: see, for example, the express approval of it by Finkelstein J in Re Opes Prime Stockbroking Ltd [2009] FCA 813; (2009) 179 FCR 20 (at [16]ff) and the recent authoritative statement in Re CSR Ltd [2010] FCAFC 34; (2010) 183 FCR 358. But any view reached on the matter of classes upon the hearing of the s 411(1) application will necessarily be provisional. It will not prevent full debate on the issue if and when it is raised at any s 411(4)(b) hearing. An issue of possible class differentiation may emerge for the first time at that point: see, for example, Re HIH Casualty and General Insurance Ltd [2006] NSWSC 485; (2006) 200 FLR 243. Members generally have not had any earlier opportunity to be heard and to put arguments to the court.

21 The second point to be made concerns a possible distinction between the option arrangements in the earlier cases to which I was referred and that between Marley and OSI-SPV. In the other cases, the option was exercisable at the purchase price under the arrangement initially proposed by the party occupying the position corresponding with that of OSI-SPV. Here, by contrast, the price payable on any exercise of the option by OSI-SPV will be the equivalent of that provided for the OSI-SPV’s publicly announced counter-proposal that follows on from the emergence of a third party’s competing proposal.

22 It is at least conceivable, having regard to this aspect, that Marley has an interest in the emergence of a counter-proposal by OSI-SPV (in response to a third party’s competing proposal) that differs from that of other Scheme Shareholders. Those other holders will receive the enhanced price contemplated by any OSI-SPV counter-proposal only if that proposal, once announced, is carried through to completion; whereas the announcement of the counter-proposal by OSI-SPV will alone secure the enhanced price for Marley, as to a 19.9% holding, subject only to exercise of the option to purchase by OSI-SPV.

23 This, as I have said, may conceivably set this case apart from the earlier cases. But it does not by any means follow that, for s 411 purposes, Marley must be regarded as standing in a class of its own because unable to consult together with all other Scheme Shareholders with a view to their common good according to like-minded appreciation of where members best interests lie. For any such conclusion of class distinction to be warranted, it would be necessary to find some difference in rights, as distinct from interests. In UDL Argos Engineering & Heavy Industries Co Ltd v Li Oi Lin [2001] 3 HKLRD 634; [2002] 1 HKC 172, Lord Millett said (at [17]) after surveying the cases:

“The principle upon which the classes of creditors or members are to be constituted is that they should depend upon the similarity or dissimilarity of their rights against the company and the way in which those rights are affected by the Scheme, and not upon the similarity or dissimilarity of their private interests arising from matters extraneous to such rights.”

24 My assessment on 9 November 2010 - in the absence of any canvassing of competing submissions - was that the rights of Marley against MSL and the way in which those rights will be affected by the proposed scheme of arrangement are not different from those of other Scheme Shareholders; and that this is so despite any remote possibility of divergence of interests arising from aspects of the wider context. On that footing, there was no apparent obstacle to allowing the matter to go forward to a meeting of the Scheme Shareholders as a whole for consideration.

The second and third matters – the order sought with respect to voting

25 The orders that counsel for MSL asked the court to make included the following:

“1 Pursuant to subsection 411(1) of the Corporations Act 2001(Cth) ( Act ):
(a) the Plaintiff, The MAC Services Group Limited ( MSL ) convene a meeting ( Scheme Meeting ) of the ordinary shareholders in MSL (other than Oil States International Inc ( OSI ) or any of its subsidiaries or any member who holds shares in the Plaintiff on behalf of, or for the benefit of, OSI or any of its subsidiaries) ( Scheme Shareholders ) for the purposes of considering and, if thought fit, approving (with or without modification) a scheme of arrangement ( Scheme ) proposed to be made between the Plaintiff and the Scheme Shareholders, the terms of which are contained in the Explanatory Statement, a copy of which is at Tab 1 of Exhibit SL-2 ( the Scheme Booklet );

(b) the Scheme Meeting be held at 10 am on 13 December 2010 at the Harbour Room, Level 2, Quay Grand Suites, 61 Macquarie Street, East Circular Quay, Sydney NSW 2000;
(c) Mr Kevin William Maloney, failing him, Mr Mark Kevin Maloney, be chairperson of the Scheme Meeting;
(d) the chairperson appointed to the Scheme Meeting have the power to adjourn the Scheme Meeting in his absolute discretion;
(e) at the Scheme Meeting, a Scheme Shareholder will be entitled to one vote for each ordinary share in the capital of the Plaintiff they are registered as holding at 7.00pm on 11 December 2010;
(f) the Scheme Booklet be approved for distribution to the Shareholders;
(g) on or before 12 November 2010 there be dispatched by pre-paid post, or in the case of a member whose registered address is outside the country by pre-paid air-mail, addressed to the relevant addresses set out in the register of members of the Plaintiff:
(i) a document substantially in the form of the Scheme Booklet;
(ii) a proxy form substantially in the form of the document at Tab 3 of Exhibit SL-2; and
(iii) n envelope addressed to Computershare Investor Services Pty Limited,
(h) the time by which proxy forms for the Scheme Meeting must be returned be 10.00am on 11 December 2010.”

26 Order 1(e) was eventually not made. Two aspects of it arose for consideration, one concerning the prescription of members’ voting rights and the other concerning the fixing of a cut-off time for the recognition of members and their holdings for the purposes of the meeting.

The second matter – discussion and assessment

27 The voting rights or voting entitlements, for Part 5.1 purposes, of the members of a Part 5.1 body that is a “company” (as defined by s 9) are not created or defined by any order of the court. They exist independently of any such order; and the court must take them as it finds them: see Re NFU Development Trust Ltd [1972] 1 WLR 1548 at 1553. It is for that reason that the part of proposed order 1(e) dealing with the extent of voting power was omitted.

28 Section 411(4)(a)(ii)(B) pays attention to the number of “votes cast on the resolution” (that is, the “resolution in favour of the compromise or arrangement”) and requires that the resolution be “passed by 75% of the votes cast on the resolution”. Having regard to its co-existence with s 411(4)(a)(ii)(A) (which requires that the resolution be “passed by a majority in number of the members … present and voting (either in person or by proxy)”), s 411(4)(a)(ii)(B) reflects an implicit assumption that voting rights will (or, at least, may) be otherwise than on the basis of one vote per member.

29 Section 411 does not, however, make any attempt to specify how many votes a particular member may cast. As it applies to the species of Part 5.1 body that is a “company”, it resembles, in that respect, other provisions concerning a “company” which operate by reference to rights of members to vote at meetings of members but are not directly the source of any such right. Examples are s 249F (under which a general meeting of a company may be convened by members with at least 5% of the votes that may be cast at such a meeting) and the s 9 definition of “special resolution” (which refers to “at least 75% of the votes cast by members entitled to vote on the resolution”).

30 In none of these contexts is there any provision of the kind once found in s 144(5) of the Companies Act 1961 concerning special resolutions (and retained in the present s 547(3) in relation to contributories) directing that regard be had to the number of votes conferred on a member by the Act itself or by the company’s constitution.

31 Section 250E (a “replaceable rule” within Part 2G.2) defines the voting rights or voting power of a member of a company with a share capital exercisable “at a meeting of members” of “such a company”. Section 250E gives each such member, on a poll, one vote for each share held.

32 A meeting of members convened pursuant to an order under s 411(1)(a) is a “meeting of members of” the particular Part 5.1 body concerned. It follows that if, as here, that body is a company with a share capital, Part 2G.2 provisions apply of their own force to the meeting: Re NRMA Insurance Ltd [2000] NSWSC 408; (2000) 156 FLR 412, Appendix B, para (4).

33 Section 250E, as noted, is a “replaceable rule” with the result that, by virtue of s 135(1)(a), it applies to a company registered before January 1998 only if it has repealed its constitution since that date. Even then, however, the “replaceable rule” will not apply if it is displaced or modified by the company’s constitution. This is the effect of s 135(2).

34 MSL was registered in 1988. Section 250E cannot apply to it if it repealed its constitution after 1 January 1998. There is no evidence as to whether this happened. But even if the constitution was repealed after 1 January 1998, any operation of s 250E is displaced by s 135(2). This is because of article 1.4 of the constitution which expressly displaces and declares to be inapplicable all of the replaceable rules contained in the Corporations Act 2001 (Cth).

35 MSL’s constitution, in article 13.2, prescribes members’ voting rights. It lays down a general rule that, upon a poll, every member has one vote for each share held, subject to special provisions (of no immediate relevance) with respect to party paid shares. This provision is expressed to apply in relation to “a meeting of members”.

36 It may readily be accepted that s 411(4)(a)(ii)(B) does not, in terms, direct attention to numbers of votes according to voting rights created by a company’s constitution. In cases not governed by s 250E (either because, as here, the operation of that section is not attracted or is displaced through s 135 or because the Part 5.1 body in question is not a “company” to which Part 2G.1 applies), therefore, there is no specification in s 411 or elsewhere in the Corporations Act of how voting rights are to be ascertained for this purpose.

37 Where voting rights of the members of a “company” do not derive from Part 2G.1, resort is to be had to the constitution to ascertain those rights. There is express recognition in s 135 that the constitution may displace or modify a replaceable rule and thus that the particular matter is one that may be prescribed by the constitution. The scheme of the constitution is thus sanctioned and adopted by the Act. This is consistent with the approach taken in company law from early times. In the Companies Act 1862 (UK), it was provided in s 51 that, on a poll, regard was to be had to the votes to which members were entitled under the regulations of the company.

38 The Corporations Act speaks in several places of “votes attached to … voting shares” (see, for example, s 257B, s 610 and s 671B). In the s 9 definition of “voting share” there is reference to “voting rights” carried by a share. There is thus express recognition of voting rights as an element of or appendage to shares and it is clearly implied that, where it is the constitution rather than s 250E that confers voting rights according to shares held, it is to those voting rights that s 411(4)(a)(ii)(B) directs attention.

39 It is relevant to note rule 3.3(2) of the Supreme Court (Corporations) Rules 1999:

“Unless the Court otherwise orders, a meeting of members ordered under section 411 of the Corporations Act must be convened, held and conducted in accordance with:
(a) the provisions of Part 2G.2 of the Corporations Act that apply to the members of a company, and
(b) the provisions of the plaintiff’s constitution that apply in relation to meetings of members and are not inconsistent with Part 2G.2 of the Corporations Act.”

40 This rule reinforces the conclusion already stated and confirms that there is no room, in the context of a members’ scheme of arrangement involving a Part 5.1 body that is a “company”, for the court to seek to prescribe the voting rights of members.

The third matter – discussion and assessment

41 It was inappropriate for the orders made on 9 November 2010 to purport to fix a cut-off time for recognition of Scheme Shareholders and their shareholdings for the purposes of voting at the scheme meeting. It was for that reason that the part of proposed order 1(e) dealing with that matter was omitted.

42 By virtue of s 1073A(1)(a) of the Corporations Act, shares in the capital of MSL are securities to which Division 3 of Part 7.11 applies. By virtue of regulation 7.11.03(1)(a) of the Corporations Regulations 2001 (Cth), therefore, such shares are “Division 4 financial products”. The proposed meeting of the sub-set of the holders of such shares that consists of the Scheme Shareholders will accordingly be governed by regulation 7.11.37:

“(1) This regulation applies to a meeting of the holders of securities of a body corporate if some or all of the securities are Division 4 financial products.
(2) The convener of the meeting may determine that all the securities of the body corporate that are Division 4 financial products at a specified time before the meeting are taken, for the purposes of the meeting, to be held by the persons who held them at the specified time.
(3) The specified time:
(a) must satisfy any applicable requirements of the ASTC operating rules; but
(b) in any case, must not be more than 48 hours before the meeting.
(4) The convenor must make a determination:
(a) in accordance with any applicable requirements of the ASTC operating rules as to the way in which it must be made; but
(b) in any case, before notice of the meeting is given.
(5) The convenor must include particulars of the determination in the notice of the meeting.
(6) However, a failure to include particulars of the determination in the notice of the meeting does not invalidate the determination.
(7) The convenor’s determination has effect accordingly despite anything in:
(a) the Act; and
(b) these Regulations; and
(c) any other law (written or unwritten) that applies to the meeting; and
(d) any document that applies to the meeting (for example, the body corporate’s constitution or any relevant trust deed).”

43 Because of the directive imposed by order 1(a) set out at paragraph [25] above, MSL itself will be the “convenor” of the meeting to which that order relates. MSL will therefore have ample power, through regulation 7.11.37, to determine the matter of a cut-off time for the purposes of the meeting and will have a clear incentive to do so in order to ensure an orderly system consistent with the trading procedures applicable to MSL shares. Given regulation 7.11.37(7) and the supremacy it affords to a convenor’s determination achieving consistency with those trading procedures, it is undesirable that the court seek to make separate prescription of its own.

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