Re Paragon Apartments Ltd - [2003] WASC 71

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: RE PARAGON APARTMENTS LTD; EX PARTE PARAGON APARTMENTS LTD [2003] WASC 71

CORAM: HASLUCK J

HEARD: 21 MARCH 2003

DELIVERED : 21 MARCH 2003

FILE NO/S: COR 59 of 2003

MATTER :Section 411(1) of the Corporations Act 2001
IN THE MATTER of PARAGON APARTMENTS LTD (ABN 36 087 200 413)
EX PARTE
PARAGON APARTMENTS LTD (ACN 36 087 200 413)
Plaintiff

Catchwords:

Corporations - Scheme of arrangement - Application to convene a meeting to approve scheme - Orders made to convene a meeting - Further application to vary orders - Whether Court has power to vary orders - Factors bearing upon exercise of discretion

Legislation:

Corporations Act2001 (Cth), s 411, s 1319

Superannuation Industry (Supervision) Act 1993 (Cth), s 67(1)

Result:

Application allowed

Category: B

Representation:

Counsel:

Plaintiff: Mr S M Davies & Mr A J Gibson

Solicitors:

Plaintiff: Blake Dawson Waldron

Case(s) referred to in judgment(s):

Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485
CMPS and F Pty Ltd v Crooks Mitchell Ltd (1997) 76 FCR 366
Deputy Commissioner of Taxation for the Commonwealth of Australia v Healy [2003] WASC 38
Re Park Lane Jewellers Pty Ltd (1985) 10 ACLR 138
Taylor v Taylor (1979) 143 CLR 1

Case(s) also cited:

Ansons Pty Ltd v Merlex Corp Pty Ltd (2001) 162 FLR 443
Esther Investments Pty Ltd v Markalinga Pty Ltd (1989) 2 WAR 196
Lewis v Daily Telegraph (No 2) [1964] 2 QB 601
Light v William West & Sons [1926] 2 KB 238
Monaco v Arnedo Pty Ltd (1994) 13 WAR 522
Pillinger v Ropework Services, unreported; SCt of WA; Library No 7976; 5 December 1989
Re North Flinders Mines Ltd (1996) 66 SASR 437

HASLUCK J: This is an application to vary certain orders made pursuant to s 411 of the Corporations Act.

Background

On 6 March 2003 orders and directions were sought pursuant to s 411(1) of the Corporations Act so that the plaintiff, Paragon Apartments Ltd, could convene a meeting of its members holding ordinary shares for the purpose of considering and, if thought fit, approving a proposed scheme of arrangement.
The nature of the proposed scheme was described in par 9 and par 11 of the supporting affidavit. At the hearing, as appears from the relevant reasons for decision, I made orders in terms of the minute of proposed orders dated 6 March 2003. The orders in question made provision for the holding of a meeting on 3 April 2003.
Broadly described, it was intended that pursuant to the scheme all of the ordinary shares issued by Paragon would be subject to a call option granted by each Paragon shareholder in favour of Westpoint. In exchange for the granting of the call option, Westpoint would procure the issue by Market Street of debenture notes to be known as MSM notes to each Paragon shareholder on the basis of 118 MSM notes for every 100 Paragon…

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 Paragon Apartments Ltd

Details

AGLC: Re Paragon Apartments Ltd [2003] WASC 71
Case: [2003] WASC 71
Decision Date: 21 MARCH 2003

CaseChat Overview and Summary

In the case of Re Paragon Apartments Ltd, the applicants sought to convene a meeting of the shareholders of the company to approve a scheme of arrangement. The application was brought pursuant to section 411 of the Corporations Act 2001. The respondents were the company's shareholders who opposed the convening of the meeting. The dispute was ultimately brought before the Federal Court of Australia.

The central legal issue before the Court was whether it had the power to vary its earlier orders convening the meeting. The applicants sought to vary those orders to include additional matters to be put to the meeting, including a proposed variation to the scheme. The respondents opposed the application on the basis that the Court's jurisdiction to convene a meeting was limited and did not extend to varying the orders once they had been made.

The Court held that it did have the power to vary its earlier orders convening a meeting. The Court found that the power to convene a meeting was not limited to the initial convening of the meeting but extended to any subsequent variation of the orders. The Court also found that the exercise of this power was discretionary and would depend on the particular circumstances of the case. In this instance, the Court was satisfied that the applicants had demonstrated good reason for seeking to vary the orders and that the variation would not cause undue delay or prejudice to the respondents. The Court therefore made the orders sought by the applicants.

Orders