HOMEMAKER RETAIL MANAGEMENT [2001] NSWSC 1058

HOMEMAKER RETAIL MANAGEMENT [2001] NSWSC 1058

The scheme of arrangement is approved with the omission of clause 7.6, as a provision allowing post-approval variation by internal mechanisms is overly broad, was not disclosed to members in explanatory material, and could undermine transactional certainty. Attempts to confer functions upon ASIC by private scheme are ineffective. Judicial advice to the responsible entity is appropriate after members have considered and approved resolutions.

Jurisdiction
Australia
Judgment Date
19 November 2001
Procedural Posture
Scheme of Arrangement and Judicial Advice / Final Approval Hearing and Orders
Outcome
Application granted with modification
Legal Topics
['schemes of Arrangement' 'stapled Securities' 'managed Investment Schemes' 'variation of Scheme' 'asic Jurisdiction' 'judicial Advice to Trustees']
['corporations Law' 'equity'] ['schemes of Arrangement' 'stapled Securities' 'managed Investment Schemes' 'variation of Scheme' 'asic Jurisdiction' 'judicial Advice to Trustees']

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 1 Authorities cited 2 Party arguments 2 Amounts and remedies 1
Sign in to unlock

Procedural Posture

Scheme of Arrangement and Judicial Advice / Final Approval Hearing and Orders

Legal Issues

  1. 1 ['Whether the court should approve a Part 5.1 scheme of arrangement between Homemaker Retail Management Ltd and its members under s.411 of the Corporations Act 2001 (Cth)' "Whether judicial advice should be given under s.63 of the Trustee Act 1925 (NSW) that the company is justified in implementing the proposal approved by unitholders' resolutions" 'Whether a provision allowing post-approval variation of the scheme is appropriate, especially where involvement of ASIC is contemplated']

Ratio Decidendi

The scheme of arrangement is approved with the omission of clause 7.6, as a provision allowing post-approval variation by internal mechanisms is overly broad, was not disclosed to members in explanatory material, and could undermine transactional certainty. Attempts to confer functions upon ASIC by private scheme are ineffective. Judicial advice to the responsible entity is appropriate after members have considered and approved resolutions.

Court Disposition

Application granted with modification

Orders

  • ['Order under s.63 of the Trustee Act 1925 (NSW) made in proceedings 4790/01 for judicial advice to the responsible entity' 'Order approving scheme of arrangement under s.411(4) of the Corporations Act 2001 (Cth) in proceedings 4789/01, with omission of clause 7.6 and relevant alterations' 'Orders to be taken out...