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Re WebCentral Group Ltd (No 2)

Re WebCentral Group Ltd (No 2)

Case [2006] FCA 1203 25 August 2006

Corporations Act 2001 (Cth)

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FEDERAL COURT OF AUSTRALIA

WebCentral Group Limited, in the matter of WebCentral Group Limited
(No 2) [2006] FCA 1203
CORRIGENDUM
IN THE MATTER OF WEBCENTRAL GROUP LIMITED (ACN 063 963 039), WEBCENTRAL GROUP LIMITED
NSD 1326 of 2006
LINDGREN J
12 SEPTEMBER 2006 (CORRIGENDUM 25 SEPTEMBER 2006)
SYDNEY (HEARD IN ADELAIDE VIA VIDEO LINK TO SYDNEY)

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD 1326 OF 2006

IN THE MATTER OF WEBCENTRAL GROUP LIMITED (ACN 063 963 039)

WEBCENTRAL GROUP LIMITED
(ACN 063 963 039)
Plaintiff

JUDGE:

LINDGREN J

DATE OF ORDER:

25 AUGUST 2006

WHERE MADE:

ADELAIDE (VIA VIDEO LINK TO SYDNEY)

CORRIGENDUM

In paragraph [1], omit “s 411(6)” and substitute “s 411(4)(b) and s 411(6)”.

I certify that the preceding one (1) numbered paragraph is a true copy of the Corrigendum to the
Reasons for Judgment herein of the Honourable Justice Lindgren.
Associate:
Dated: 25 September 2006

FEDERAL COURT OF AUSTRALIA
WebCentral Group Limited, in the matter of WebCentral Group Limited
(No 2) [2006] FCA 1203
CORPORATIONS – compromise or arrangement – “no encumbrances” clause in scheme – whether Court should approve Scheme containing a provision that shares will be transferred free of all encumbrances. Held: Scheme approved subject to deletion of the “no encumbrances” clause.
Corporations Act 2001 (Cth) s 411
IN THE MATTER OF WEBCENTRAL GROUP LIMITED (ACN 063 963 039), WEBCENTRAL GROUP LIMITED
NSD 1326 of 2006
LINDGREN J
12 SEPTEMBER 2006
SYDNEY (HEARD IN ADELAIDE VIA VIDEO LINK TO SYDNEY)

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD 1326 OF 2006

IN THE MATTER OF WEBCENTRAL GROUP LIMITED (ACN 063 963 039)

WEBCENTRAL GROUP LIMITED
(ACN 063 963 039)

Plaintiff

JUDGE:

LINDGREN J

DATE OF ORDER:

25 AUGUST 2006

WHERE MADE:

ADELAIDE (VIA VIDEO LINK TO SYDNEY)

THE COURT ORDERS THAT:
1. Pursuant to ss 411(4)(b) and 411(6) of the Corporations Act 2001 (Cth) (“the Act”), the scheme of arrangement between the Plaintiff and its members (other than any person holding fully paid ordinary shares in the Plaintiff on behalf of, or for the benefit of, Melbourne IT Ltd or any of its Related Entities, as defined in the scheme of arrangement) in the form annexed hereto and marked “A” [Annexure A comprises 15 pages and is not attached to this copy, but is available electronically], having been duly agreed to in accordance with s 411(4)(a)(i) of the Act at a meeting of the members of the Plaintiff, be approved, subject to the following alterations, namely:

(i)the deletion of the words: “Date: 14 July 2006” from the first page;

(ii)the amendment of the definition of “Deed Poll” in clause 1.1 to read:

“Deed Poll means the Deed Poll dated 11 July 2006 executed by MLB, as amended by Amendment to Deed Poll dated 18 August 2006, pursuant to which MLB has, amongst other things, covenanted in favour of Scheme Shareholders to perform the obligations contemplated of it under this Scheme.”; and

(iii)the…

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 WebCentral Group Ltd (No 2)

Details

AGLC: Re WebCentral Group Ltd (No 2) [2006] FCA 1203
Case: [2006] FCA 1203
Decision Date: 25 AUGUST 2006

CaseChat Overview and Summary

The case involves WebCentral Group Ltd, the plaintiff, and its members, with the exception of those holding shares on behalf of or for the benefit of Melbourne IT Ltd or its related entities. The dispute was heard in the Federal Court of Australia. The primary issue before the court was the approval of a scheme of arrangement between the plaintiff and its members, as mandated by sections 411(4)(b) and 411(6) of the Corporations Act 2001 (Cth). The court was also tasked with considering whether the plaintiff should be exempted from compliance with section 411(11) of the Act, as per section 411(12).

The court examined the scheme of arrangement and the necessary approvals under section 411(4)(a)(i) of the Act, focusing on whether the scheme was appropriately agreed to by the members. The court identified specific alterations required to the scheme, including the deletion of certain dates, the amendment of definitions, and the restructuring of clauses to ensure clarity and compliance with the statutory requirements. The court determined that these alterations were necessary to accurately reflect the agreement and to maintain the integrity of the scheme.

After careful consideration, the court approved the scheme of arrangement with the specified alterations, ensuring that it complied with the relevant provisions of the Corporations Act. The court also granted the plaintiff an exemption from compliance with section 411(11) of the Act, finding it appropriate in the context of this particular scheme. The court ordered that these decisions be implemented immediately, with the altered scheme taking effect as per the annexed document marked “B”.

Orders

Orders of the court

1. Pursuant to ss 411(4)(b) and 411(6) of the Corporations Act 2001 (Cth) (“the Act”), the scheme of arrangement between the Plaintiff and its members (other than any person holding fully paid ordinary shares in the Plaintiff on behalf of, or for the benefit of, Melbourne IT Ltd or any of its Related Entities, as defined in the scheme of arrangement) in the form annexed hereto and marked “A” [Annexure A comprises 15 pages and is not attached to this copy, but is available electronically], having been duly agreed to in accordance with s 411(4)(a)(i) of the Act at a meeting of the members of the Plaintiff, be approved, subject to the following alterations, namely:

(i) the deletion of the words: “Date: 14 July 2006” from the first page;

(ii) the amendment of the definition of “Deed Poll” in clause 1.1 to read:

“Deed Poll means the Deed Poll dated 11 July 2006 executed by MLB, as amended by Amendment to Deed Poll dated 18 August 2006, pursuant to which MLB has, amongst other things, covenanted in favour of Scheme Shareholders to perform the obligations contemplated of it under this Scheme.”; and

(iii) the deletion of clause 9.3(b) and the re-lettering of clause 9.3(c) as clause 9.3(b);

so that the scheme of arrangement so approved and altered is in the form annexed hereto and marked “B” [Annexure B comprises 15 pages and is not attached to this copy, but is available electronically].

2. Pursuant to s 411(12) of the Act, the Plaintiff be exempted from compliance with s 411(11) of the Act in relation to the order at paragraph 1.

3. These Orders to be entered forthwith.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

LINDGREN J

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: LINDGREN J

Full text does not contain this section.

Citations

AGLC Citation

Re WebCentral Group Ltd (No 2) [2006] FCA 1203

Most Recent Citation

Metals Exploration Limited ACN 005 483 009, in thematter of Metals Exploration Limited ACN 005 483 009 [2007] FCA 84

Cases citing this decision · 11 of 11 shown

Sinclair Knight Merz Management Pty Limited, in the matter of Sinclair Knight Merz Management Pty Limited
[2013] FCA 1211 Para 9

…olders to give following the decisions of Lindgren J in Re APN News & Media Ltd (2007) 62 ACSR 400 at [57]-[63]; Re WebCentral Group Ltd (No 2) (2006) 58 ACSR 742 at [14]-[22] and Investa Properties Limited, in the matter of Investa Properties Ltd [2007] FCA 1104 at [29]-[30], adapted to the circumstances where the v…
PrimeAg Australia Limited, in the matter of PrimeAg Australia Limited
[2013] FCA 1001 Para 20

…ch have become usual following the decisions of Lindgren J in Re APN News & Media Ltd (2007) 62 ACSR 400 at [57]-[63]; Re WebCentral Group Ltd (No 2) (2006) 58 ACSR 742 at [14]-[22] and Re Investa Properties Ltd [2007] FCA 1104 at [29]-[30]. Performance Risk…
Re Tower Australia Group Ltd
[2011] FCA 224 Para 15

…n Stanley Bidco had had notice of that interest. I therefore took the view that those words overcame the difficulty referred to in WebCentral 58 ACSR 742, which was that the presence of a vesting free of encumbrances term might give the impression to third parties that their interests had been extinguished by…
IOR Group Limited
[2009] FCA 1588 Para 13

…86. His Honour referred at [22] of his reasons to a “vesting free of encumbrances” term that he had considered in WebCentral Group Limited (No 2) (2006) 58 ACSR 742 and to his concerns that third parties having interests in the shares might be given the impression that their interests were being adversely affected. T…
Re Scarborough Equities Ltd [No 2]
[2009] FCA 484 Para 9

…. Provisions of this kind have been the subject of a number of decisions, stemming from Lindgren J’s decision in Re WebCentral Group Ltd (No 2) (2006) 58 ACSR 742 ( WebCentral ). I followed WebCentral in the cases of Re Metals Exploration Limited [2007] FCA 84 and Re Uranium King Limited (No 3) (2008) 67 ACSR 513. Th…
Uranium King Limited, in the matter of Uranium King Limited (ABN 34 119 187 816) (No 3)
[2008] FCA 1196 Para 16

…mbrance” clause. In Re Metals Exploration Ltd [2007] FCA 84 at [6]‑[8], I followed the decision of Lindgren J in Re WebCentral Group Ltd (No 2) (2006) 58 ACSR 742 and approved the scheme of arrangement in that case subject to the deletion of the “no encumbrance” clause. In accordance with the reasoning in that case,…
Re Orion Telecommunications Ltd
[2007] FCA 1389 Para 9

…occur. Even if that were so, the scheme could be confirmed without the relevant clause (cf Re WebCentral Group Ltd (No 2) (2006) 58 ACSR 742; [2006] FCA 1203).…
Re Mincom Ltd (No 3)
[2007] QSC 207 Para 1

…y to cl 6(d). One could ask rhetorically, what need is there for a warranty of something which happens by operation of law. [16](2006) 58 ACSR 742; [2006] FCA 1203.…
Re Investa Properties Ltd
[2007] FCA 1104 Para 22

…also includes (in cl 7.3(b)) what may be called a “vesting free of encumbrances” term. I discussed such a term in WebCentral Group Limited (No 2) (2006) 58 ACSR 742 ( WebCentral ) at [14]–[24], and will not repeat here what I said there.…
Re APN News & Media Ltd
[2007] FCA 770 Para 1

…Clause 3.4 is not a “no encumbrances” provision of the kind considered in Re WebCentral Group Ltd (No 2) (2006) 58 ACSR 742 at [14]-[22] because it cannot give the impression to encumbrancees that their security over the shares is being adversely affected by the transfer. Indeed, it assumes that the shares may be tra…
Metals Exploration Limited ACN 005 483 009, in thematter of Metals Exploration Limited ACN 005 483 009
[2007] FCA 84 Para 5

…This clause has been referred to as a ‘no encumbrances’ clause. In Re WebCentral Group Ltd (No 2) (2006) 58 ACSR 742, Lindgren J approved a scheme of arrangement, on condition that the ‘no encumbrances’ clause, which was cl 9.3(b) of that scheme of arrangement, was deleted. Counsel for the plaintiff has submitted tha…

View all 11 citing cases →

Cases cited in this decision · 3 of 3 shown

Re WebCentral Group Ltd
[2006] FCA 937

…the Scheme”). The first court hearing took place on 14 July 2006 (see WebCentral Group Limited, in the matter of WebCentral Group Limited [2006] FCA 937). I then made an order under s 411(1) of the Act that WCG convene a meeting (“Scheme Meeting”) of its shareholders (“WebCentral Shareholders”) for the purpose of…
Cambridge Gas Transport Corp v. Official Committee of Unsecured Creditors (of Navigator Holdings PLC and others) (Isle of Man)
[2006] UKPC 26 Para 26

…ral authorities, including Cambridge Gas Transport Corporation v The Official Committee of Unsecured Creditors (of Navigator Holdings Plc and others) [2006] UKPC 26, especially at [26]. For the proposition that the security attaches to the scheme consideration, he referred to In re General Exchange Bank (1871) LR…
6 Ch App 818
6 Ch App 818

…especially at [26]. For the proposition that the security attaches to the scheme consideration, he referred to In re General Exchange Bank (1871) LR 6 Ch App 818.…

Legislation cited in this decision · 2

Corporations Act 2001 (Cth)
411 2 mentions
Banking Act 1959 (Cth)
1 mention

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1326 OF 2006

JUDGE:	LINDGREN J
DATE OF ORDER:	25 AUGUST 2006
WHERE MADE:	ADELAIDE (VIA VIDEO LINK TO SYDNEY)

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1326 OF 2006