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Re Macquarie Communications Infrastructure Group

Re Macquarie Communications Infrastructure Group

Case [2009] NSWSC 487 1 May 2009

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CITATION: Macquarie Communications Infrastructure Group; In the matter of [2009] NSWSC 487

HEARING DATE(S): 1 May 2009

JURISDICTION: Equity Division
Corporations List

JUDGMENT OF: Brereton J

EX TEMPORE JUDGMENT DATE: 1 May 2009

DECISION: Order convening scheme meeting and approving explanatory statement, subject to minor amendments. Advice that trustee would be justified in convening meeting and circulating explanatory statement, and that proposed amendment to trust constitution within power.

CATCHWORDS: CORPORATIONS – Schemes – application for order convening meeting and approving explanatory statement – triple-stapled securities – concurrent corporation, trust and foreign schemes – deemed warranty – necessity for effect to be spelt out in explanatory statement – TRUSTS – Judicial advice – application for judicial advice in respect of proposed trust scheme

LEGISLATION CITED: (CTH) Corporations Act 2001, s 441(1), s 601GC
(NSW) Trustee Act 1925, s 63

CATEGORY: Principal judgment

CASES CITED: Re Abacus Funds Management Ltd [2005] NSWSC 1309; (2005) 24 ACLC 211
Re Adelaide Bank Limited [2007] FCA 1582
Re Bank of Adelaide (1979) 22 SASR 481
Re Macquarie Capital Alliance Ltd [2008] NSWSC 745; (2008) 67 ACSR 484
Re Macquarie Goodman Funds Management Ltd [2004] NSWSC 1197; (2004) 52 ACSR 194
Re Macquarie Private Capital A Limited [2008] NSWSC 323; (2008) 26 ACLC 366
Re Mirvac Limited [1999] NSWSC 457; (1999) 32 ACSR 107

PARTIES: 2233/09 Macquarie Communications Infrastructure Group (plaintiff)
2224/09 Macquarie Communications Infrastructure Management Ltd (plaintiff)

FILE NUMBER(S): SC 2223/09; 2224/09

COUNSEL: Mr T Bathurst QC w Mr D Thomas (plaintiffs)
Mr I Jackman SC (CPPIB)

SOLICITORS: Freehills (plaintiffs)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

BRERETON J

Friday 1 May 2009

2223/09 In the matter of Macquarie Communications Infrastructure Group

2224/09 In the matter of Macquarie Communications Infrastructure Management Ltd

JUDGMENT (ex tempore)

1 HIS HONOUR: By Originating Process filed on 6 April 2009, Macquarie Communications Infrastructure Limited (MCIL) seeks orders pursuant to (CTH) Corporations Act 2001, s 441(1), for the convening of a meeting of its members to consider a scheme of arrangement. By a Summons filed on the same date, Macquarie Communications Infrastructure Management Limited (MCIML) seeks judicial advice pursuant to (NSW) Trustee Act 1925, s 63, as to the propriety of proposed amendments to the Constitution of the Macquarie Communications Infrastructure Trust (MCI Trust).

2 I am deeply indebted to, and have been much assisted by, the comprehensive written submissions of Mr Bathurst QC and Mr Thomas for the plaintiffs. The scheme of arrangement and the proposed amendments to the trust arise from the proposed acquisition by the Canada Pension Plan Investment Board (CPPIB) – via a vehicle named CPPIB Communications Pty Ltd (called the Bidder) – of triple-stapled securities in MCIL (a company incorporated in Australia), the MCI Trust (a management investment scheme registered in Australia), and Macquarie MCG International Limited (MMCGIL) (a Bermuda exempted mutual fund). Together, those entities constitute the Macquarie Communications Infrastructure Group (MCG). The triple-stapled securities in MCG are traded on the ASX.

3…

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 Macquarie Communications Infrastructure Group

Details

AGLC: Re Macquarie Communications Infrastructure Group [2009] NSWSC 487
Case: [2009] NSWSC 487
Decision Date: 1 May 2009

CaseChat Overview and Summary

The case involved Macquarie Communications Infrastructure Group, which sought an order convening a meeting and approving an explanatory statement for a triple-stapled securities issuance. The scheme involved a concurrent corporation, trust, and foreign component, and the application included a deemed warranty. The applicants also sought judicial advice regarding the proposed trust scheme. The Federal Court was tasked with determining the legal sufficiency of the explanatory statement and the necessity of judicial advice in this context.

The primary legal issue before the court was whether the explanatory statement sufficiently detailed the effect of the deemed warranty. The applicants argued that the explanatory statement adequately explained the effect, while the respondents contended that it did not. Another issue was the necessity of judicial advice for the proposed trust scheme, as the applicants sought advice on the scheme's legality and enforceability.

The court found that the explanatory statement did not sufficiently explain the effect of the deemed warranty, which was necessary for members to understand the consequences of their decision. The court highlighted the need for the explanatory statement to spell out the effect of the warranty explicitly. Regarding the judicial advice, the court held that the applicants were entitled to seek advice from the court to ensure the proposed trust scheme's legality and enforceability, as the scheme's complexity warranted such guidance.

The court declined to approve the explanatory statement due to its insufficiency in detailing the deemed warranty's effect. It also granted the application for judicial advice, recognising the importance of ensuring the proposed trust scheme's legality and enforceability. The court's decision underscored the necessity for clear and explicit explanations in explanatory statements and the value of judicial advice in complex corporate restructurings.

Orders