Xu v Wan Ze Property Development (Aust) Pty Ltd (in liquidation)

The case of Xu v Wan Ze Property Development (Aust) Pty Ltd (in liquidation) involved the approval of two schemes of arrangement by the Federal Court of Australia. The primary dispute centered on whether the court should approve the proposed corporate reconstruction involving EQM and SGC, ultimately leading to a merger by absorption with AIC. The plaintiffs sought approval for the schemes of arrangement, while the defendants did not oppose the application.

The court was required to determine whether it had jurisdiction to approve the schemes of arrangement and to make orders for their implementation. A key issue was whether AIC, which was not registered under the Corporations Act 2001 (Cth), could be considered a 'company' for the purposes of the Act when making orders for the implementation of the schemes. The court also needed to consider whether the implementation orders could be made under section 413(1) of the Act and whether the statutory requirements for advertising and approval of the schemes were satisfied.

The court concluded that all statutory requirements for the approval and implementation of the schemes had been met. The meetings were properly convened and held, and the requisite resolutions were passed. ASIC had no objections to the schemes, and the court found that the hearings were adequately advertised with no opposition received. The court deferred the determination of its jurisdiction to make implementation orders to a subsequent hearing but indicated that there appeared to be no jurisdictional barrier to doing so if appropriate. The court ultimately approved the schemes of arrangement and made orders for their implementation, including the transfer of assets and liabilities, deregistration of the companies, and substitution of the defendant in contracts.

The court made orders approving the schemes of arrangement and directing their implementation, subject to certain conditions and future orders as necessary. The orders were to take effect on 31 December 2013, with specified steps for the transfer of assets and liabilities, and the deregistration of the companies involved. The defendant was granted the right to use and disclose information transferred from the plaintiffs and to sign documents on their behalf to complete the transfer.