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Re Westfield Holdings Ltd

Re Westfield Holdings Ltd

Case [2004] NSWSC 458 25 May 2004

Corporate Governance

Scheme of Arrangement

Constitution Alteration

Judicial Advice

Admissibility of Evidence

Corporate Law & Governance

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Reported Decision:
49 ACSR 734

Supreme Court

CITATION: Westfield Holdings Limited & Ors [2004] NSWSC 458

HEARING DATE(S): 24/05/04, 25/05/04

JUDGMENT DATE:
25 May 2004

JURISDICTION:
Equity Division
Corporations List

JUDGMENT OF: Barrett J

DECISION: Order for convening meeting of members under s.411. Judicial advice that responsible entities justified in proceeding to meetings stage.

CATCHWORDS: CORPORATIONS - composite merger proposal involving scheme of arrangement between company and members and alteration of constitutions of managed investment schemes - application by company for order convening meeting of members - applications by responsible entities of registered managed investment schemes for judicial advice - approach to be taken by court at stage where meetings are sought - acceptability of procedure under which several meetings occur sequentially within a larger gathering - adoption of new constitution where full text not sent to members - need for deed poll to bind outsiders to perform

LEGISLATION CITED: Corporations Act 2001 (Cth), s.411
Trustee Act 1925, s.63

CASES CITED: Bancorp Investments Ltd v Primac Holdings Ltd (1984) 9 ACLR 263
Bulfin v Bebarfalds Ltd (1938) 39 SR (NSW) 423
Fraser v NRMA Holdings Ltd (1995) 55 FCR 452
MTM Funds Management Ltd v Cavalone Holdings Pty Ltd (2000) 35 ACSR 440
Re Buka Minerals Ltd (1983) 8 ACLR 507
Re Cranswick Premium Wines Ltd (2002) 44 ACSR 113
Re CSR Ltd (2003) 45 ACSR 34
Re Central Pacific Minerals NL [2002] FCA 239
Re Foundation Healthcare Ltd (2002) 42 ACSR 252
Re GIO Building Society Ltd (2001) 39 ACSR 77
Re Glendale Land Development Ltd (1983) 7 ACLR 171
Re Homemaker Retail Management Ltd (2001) 187 ALR 520
Re Mirvac Ltd (1999) 32 ACSR 118
Re NRMA Insurance Ltd (2000) 33 ACSR 523
Re Ranger Minerals Ltd (2002) 42 ACSR 582
Re The Hills Motorway Ltd (2002) 43 ACSR 101
Toal v Aquarium Platinum Ltd [2004] FCA 550

PARTIES :
Westfield Holdings Limited - Plaintiff (1)
Westfield Management Limited - Plaintiff (2)
Westfield America Management Limited - Plaintiff (3)

FILE NUMBER(S): SC 2901/04 (1); 2900/04 (2); 2899/04 (3)

COUNSEL: Mr T F Bathurst QC - Plaintiff (1)
Mr I M Jackman SC - Plaintiff (2) and (3)

SOLICITORS: Mallesons Stephen Jaques - Plaintiff (1)
Speed & Stracey Lawyers Pty Limited - Plaintiff (2)
Minter Ellison - Plaintiff (3)

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

BARRETT J

TUESDAY 25 MAY 2004

2901/04 - WESTFIELD HOLDINGS LIMITED
2900/04 - WESTFIELD MANAGEMENT LIMITED
2899/04 - WESTFIELD AMERICA MANAGEMENT LIMITED

JUDGMENT

1 In the course of yesterday and again this morning, I have heard three applications. Westfield Holdings Limited, which I shall call "Westfield", seeks orders under s.411 of the Corporations Act 2001 (Cth) for the convening of a meeting of its members for the purpose of considering and, if thought fit, agreeing to a Part 5.1 scheme of arrangement between the company and its members. In addition, each of Westfield Management Limited, the responsible entity of the Westfield Trust, and Westfield America Management Limited, 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 Westfield Holdings Ltd

Details

AGLC: Re Westfield Holdings Ltd [2004] NSWSC 458
Case: [2004] NSWSC 458
Decision Date: 25 May 2004

CaseChat Overview and Summary

The case involved Westfield Holdings Ltd and the responsible entities of registered managed investment schemes. The dispute centred around a composite merger proposal, which included a scheme of arrangement between the company and its members as well as the alteration of the constitutions of the managed investment schemes. The court was required to decide on several legal issues, including the appropriate approach to take when meetings are sought, the acceptability of a procedure where several meetings occur sequentially within a larger gathering, and the adoption of a new constitution where the full text was not sent to members.

The court began by noting that the primary consideration at this stage of the process was to ensure that the company's members had the opportunity to be properly informed about the proposed changes. It held that the company had the right to apply for an order convening a meeting of members, and that the responsible entities of the managed investment schemes could also seek judicial advice. The court emphasised the importance of transparency and fairness in the process, and stressed that the members needed to be fully informed about the implications of the proposed changes.

In terms of the specific legal issues, the court held that it was acceptable for several meetings to occur sequentially within a larger gathering, provided that each meeting was properly convened and that the members had the opportunity to be fully informed about the issues being discussed. The court also held that it was not necessary for the full text of the new constitution to be sent to members before the meeting, provided that they were given sufficient notice of the changes and had the opportunity to ask questions and seek clarification. Finally, the court held that a deed poll was necessary to bind outsiders to perform, and that this needed to be clearly communicated to the members.

The court made several orders, including an order convening a meeting of members and an order providing for the adoption of a new constitution. It also made orders relating to the disclosure of information to members and the procedures to be followed at the meeting. The court emphasised the importance of transparency and fairness in the process, and stressed the need for the members to be fully informed about the implications of the proposed changes.

Orders