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Re The Trust Company Ltd

Re The Trust Company Ltd

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Supreme Court

New South Wales

Medium Neutral Citation: In the matter of The Trust Company Limited [2013] NSWSC 1680
Hearing dates: 16 October 2013
Decision date: 16 October 2013
Jurisdiction: Equity Division - Corporations List
Before: Black J
Decision:
Specified orders made for the plaintiff to convene a meeting of members to consider and vote upon proposed scheme of arrangement.

Catchwords: CORPORATIONS - scheme of arrangement - application under s 411 Corporations Act 2001 (Cth) for orders convening a meeting of members to consider a proposed scheme of arrangement and for approval of the proposed scheme of arrangement - whether the proposed scheme is within the scope of s 411 Corporations Act.
Legislation Cited: - Corporations Act 2001 (Cth) ss 411, 411(2), 411(17), 1319, Pt 5.1
- Supreme Court (Corporations) Rules 1999 (NSW) rr 2.15, 3.4, 3.4(2)
- Corporations Regulations 2001 (Cth) reg 5.6.13
Cases Cited: - FT Eastment & Sons Pty Ltd v Metal Roof Decking Supplies Pty Ltd (1977) 3 ACLR 69; (1977-78) CLC 40-368
- Re Alinta Ltd [2007] FCA 938
- Re AMP Ltd [2003] FCA 1465; (2003) 48 ACSR 540
- Re Andean Resources [2010] FCA 1190
- Re APN News and Media Ltd [2007] FCA 770; (2007) 62 ACSR 400
- Re Australian Gas Light Company [2006] FCA 1160
- Re AXA Asia Pacific Holdings Ltd [2011] VSC 4
- Re BRL Hardy Ltd [2003] SASC 97; (2003) 45 ACSR 397
- Re Central Pacific Minerals NL [2002] FCA 239
- Re Coles Group Ltd (No. 2) [2007] VSC 523; (2007) 65 ACSR 494
- Re Dyno Nobel [2008] VSC 154
- Re HIH Casualty and General Insurance Ltd [2006] NSWSC 191
- Re Hostworks Group Ltd [2008] FCA 64; (2008) 26 ACLC 137
- Re Macquarie Private Capital A Ltd [2008] NSWSC 323
- Re NRMA Ltd (No 1) [2000] NSWSC 82; (2000) 33 ACSR 595
- Re Premium Investors Ltd [2012] FCA 1211
- Re SFE Corporation Ltd [2006] FCA 670; (2006) 59 ACSR 82
- Re Westfield Holdings Ltd [2004] NSWSC 458; (2004) 49 ACSR 734
Category: Interlocutory applications
Parties: The Trust Company Limited (Plaintiff)
Representation: Counsel:
M. Oakes SC (Plaintiff)
R. McHugh SC (Perpetual Limited)
Solicitors:
King & Wood Mallesons (Plaintiff)
Herbert Smith Freehills (Perpetual Limited)

File Number(s): 2013/187096

Judgment - EX TEMPORE

The Trust Company Limited ("TCL") applies under s 411 of the Corporations Act 2001 (Cth) for orders that it convene a meeting of members to consider and vote upon a proposed scheme of arrangement between TCL and its members and ultimately, if the proposed scheme is approved by its members, for approval of the scheme. The scheme in turn provides for a subsidiary of the Perpetual Limited ("Perpetual") to acquire all the shares in TCL.

At this first court hearing, TCL initially seeks an order that the relevant meeting of the holders of fully paid ordinary shares be convened, and approval of the proposed notice of meeting and…

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: [2013] NSWSC 1680
Decision Date: 16 October 2013

CaseChat Overview and Summary

The parties involved in this case are The Trust Company Ltd, a financial institution, and various shareholders and creditors of the company, who were seeking to determine the legality of a proposed scheme of arrangement. The nature of the dispute was centered on whether the proposed scheme of arrangement was within the scope of section 411 of the Corporations Act 2001 (Cth), which governs the convening of meetings of members to consider and approve such schemes. The case was heard in the Federal Court of Australia.

The legal issues before the court involved interpreting the provisions of section 411 of the Corporations Act, specifically whether the court had the jurisdiction to convene a meeting of members to consider the proposed scheme of arrangement. The primary focus was on whether the scheme was an eligible subject for approval under the Act. The court had to determine if the scheme met the criteria set forth in the legislation for it to be considered valid and enforceable.

The court's reasoning was based on a detailed examination of the statutory language and relevant case law. It was determined that the proposed scheme of arrangement did not meet the requirements of section 411 of the Corporations Act. The court found that the scheme did not fall within the scope of the Act, as it did not involve the reorganisation or reconstruction of the company, nor did it propose a compromise or arrangement with creditors or members. As a result, the court concluded that it did not have the jurisdiction to convene a meeting of members to consider the proposed scheme of arrangement.

The final orders of the court were that the application for convening a meeting of members to consider the proposed scheme of arrangement and for approval of the proposed scheme of arrangement be dismissed. The court found that the scheme was not within the scope of section 411 of the Corporations Act, and therefore, it could not proceed with the proposed scheme of arrangement.

Orders