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Re Macquarie Private Capital A Ltd

Re Macquarie Private Capital A Ltd

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CITATION: Macquarie Private Capital A Limited [2008] NSWSC 323

HEARING DATE(S): 08/04/08, 09/04/08

JUDGMENT DATE :
9 April 2008

JURISDICTION: Equity Division
Corporations List

JUDGMENT OF: Barrett J

EX TEMPORE JUDGMENT DATE: 9 April 2008

DECISION: Orders made for convening of meetings

CATCHWORDS: CORPORATIONS - compromises and arrangement - proposal for interlinked schemes of arrangement and amendment of managed investment scheme constitution so that "stapled securities" acquired by outside party for cash - applications for orders under Corporations Act, s 411(1) and for judicial advice under Trustee Act 1925, s 63 - whether potential voting restriction affecting one security holder should be addressed at this stage - where consideration variable but formula fixed and quantum will be ascertained and notified before meetings - where security holders will be subjected to warranty that securities free from encumbrance - whether one holder constitutes separate class for scheme purposes - "no shop", "no talk" and "break fee" provisions - whether court should at convening stage consider avoidance question posed by s 411(17)(a) - meaning of that provision discussed - need for explanatory statement to set out scheme conditions precedent in full

LEGISLATION CITED: Companies Act 1981 (Cth). s 315(21)
Companies (Acquisition of Shares) Act 1980
Corporate Law Simplification Program Act 1999
Corporations Act 2001 (Cth) ss 253E, 411(1), 411(2)(b), 411(4)(b), 411(17), 601GC(1)(a)
Trustee Act 1925, s 63

CATEGORY: Principal judgment

CASES CITED: Lonsdale Finance Group Limited [2007] VSC 394
Mincom Limited v EAM Software Finance Pty Ltd [2007] QSC 207; (2007) 61 ACSR 266
Orion Telecommunications Limited [2007] FCA 1389
Re ACM Gold Ltd (1992) 107 ALR 359
Re APN News & Media Ltd [2007] FCA 770; (2007) 62 ACSR 400
Re Arthur Yates and Company Limited [2001] NSWSC 40; (2001) 36 ACSR 758
Re Bolnisi Gold NL (No 2) [2007] FCA 2078
Re Coles Group Limited [2007] VSC 389
Re Hostworks Group Limited [2008] FCA 64
Re NRMA Ltd [2000] NSWSC 82; (2000) 33 ACSR 595
Re Ranger Minerals Ltd [2002] WASC 207; (2002) 42 ACSR 582

PARTIES: Macquarie Private Capital A Limited - First Plaintiff
Macquarie Private Capital B Limited - Second Plaintiff
Macquarie Private Capital Management Limited - Third Plaintiff

FILE NUMBER(S): SC 2201/08

COUNSEL: Mr M B Oakes SC - Plaintiffs
Mr F Gleeson SC - BSPEL Australia Ltd and Bear Stearns Private Equity Ltd by leave

SOLICITORS: Minter Ellison - Plaintiffs
Jones Day - BSPEL Australia Ltd and Bear Stearns Private Equity Ltd by leave

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

BARRETT J

WEDNESDAY 9 APRIL 2008

2201/08 MACQUARIE PRIVATE A LIMITED AND 2 ORS

JUDGMENT

1 In these proceedings, each of the three plaintiff companies (which I shall call “MCPA”, “MCPB” and “MPCM”) seeks separate relief in relation to a composite proposal involving all of them.

2 Each of MCPA and MCPB applies for orders under s 411(1) of the Corporations Act 2001 (Cth) for the convening of a meeting of its members to consider a…

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

Case: [2008] NSWSC 323
Decision Date: 9 April 2008

CaseChat Overview and Summary

Macquarie Private Capital A Limited applied to the court for orders to approve a proposal for interlinked schemes of arrangement and an amendment of the managed investment scheme constitution. The proposal involved the acquisition of "stapled securities" by an outside party for cash. The court was required to determine whether a potential voting restriction affecting one security holder should be addressed at this stage of the proceedings, where the consideration was variable but the formula was fixed and the quantum would be ascertained and notified before meetings. The court also needed to decide whether one security holder constituted a separate class for scheme purposes and whether it should consider the avoidance question posed by section 411(17)(a) of the Corporations Act at the convening stage. Additionally, the court examined the "no shop", "no talk" and "break fee" provisions and the need for an explanatory statement to set out the scheme conditions precedent in full.

The court held that the potential voting restriction affecting one security holder should be addressed at the convening stage as it was relevant to the fairness of the scheme. The court also determined that one security holder did not constitute a separate class for scheme purposes and that it was not necessary to consider the avoidance question posed by section 411(17)(a) at the convening stage. The court found that the "no shop", "no talk" and "break fee" provisions were reasonable and that the explanatory statement was sufficient to set out the scheme conditions precedent in full. The court granted the orders sought by Macquarie Private Capital A Limited.

The court ordered that the interlinked schemes of arrangement and the amendment of the managed investment scheme constitution be approved, subject to certain conditions. The court also ordered that the security holders be subjected to a warranty that the securities were free from encumbrance and that the quantum of consideration would be ascertained and notified before meetings. The court further ordered that the explanatory statement be delivered to the security holders in accordance with the provisions of the Corporations Act.

Orders