In the matter of Centro Properties Limited and CPT Manager Limited in its capacity as responsible entity of Centro Property Trust [2011] NSWSC 1171

Supreme Court New South Wales

Medium Neutral Citation: In the matter of Centro Properties Limited and CPT Manager Limited in its capacity as responsible entity of Centro Property Trust [2011] NSWSC 1171 Hearing dates: 29, 30 September 2011 Decision date: 05 October 2011 Jurisdiction: Equity Division - Corporations List Before: Barrett J Decision: Orders for the convening of scheme meetings to be made Catchwords: CORPORATIONS - arrangements and reconstructions - proposed Part 5.1 scheme between companies and a group of their creditors - application under s 411(1) for orders for the convening of meetings of creditors - objections taken by persons given leave to be heard without becoming parties - where funds will be paid to "junior stakeholders" including equity holders - objectors are plaintiffs in other proceedings seeking unliquidated damages against the companies - objection that proposed payment is contrary to principle of maintenance of capital, entails breach of directors' duties where company approaching insolvency and entails impermissible departure from order of application of assets in a winding up - role of court upon s 411(1) application discussed - objections not fanciful but raised at level of generality in circumstances where a full understanding may not be available - no objection seen at this stage to represent a "knock-out blow" - appropriate exercise of s 411(1) discretion is to order convening of meetings and to revisit objections if and when pressed in fully formulated form at any s 411(4)(b) hearing Legislation Cited: Corporate Law Review Act 1992 (Cth) Corporations Act 2001 (Cth), Parts 5.1, 5.3A, ss 95A, 180(1), 254T(1), 256B(1), 411(1), 411(4)(b), 601FD(3) Cases Cited: Australian Securities and Investments Commission v Healey [2011] FCA 717; (2011) 278 ALR 618 Bank of Australasia v Hall [1907] HCA 78; (1907) 4 CLR 1514 Box Valley Pty Ltd v Kidd [2006] NSWCA 26; (2006) 24 ACLC 471 Brash Holdings Ltd v Katile Pty Ltd [1996] 1 VR 24 Davis Investments Pty Ltd v Commissioner of Stamp Duties [1958] HCA 22; (1958) 100 CLR 392 at 413 New Cap Reinsurance Corporation Ltd (in liq) v A E Grant [2008] NSWSC 1015; (2008) 221 FLR Re Bluebrook Ltd [2010] EWHC 2114 (Ch); [2010] 1 BCLC 338 Re Brian Cassidy Electrical Industries Pty Ltd (1984) 9 ACLR 140 Re Bulong Nickel Pty Ltd [2002] WASC 126; (2002) 42 ACSR 52 Re Critchin's Oil Co [1902] 2 Ch 86 at 95 Re CSR Ltd [2010] FCAFC 34; (2010) 183 FCR 358 Re Foundation Healthcare Ltd [2002] FCA 742; (2002) 42 ACSR 252 Re HIH Casualty & General Insurance Ltd [2005] NSWSC 240; (2005) 190 FLR 398 Re Tea Corporation Ltd [1903] 1 Ch 12 Re Uniq plc [2011] EWHC 749 (Ch) Thomas A Edison Ltd v Bullock [1912] HCA 72: (1912) 15 CLR 679 Walker v Wimborne [1976] HCA 7; (1976) 137 CLR 1 Category: Procedural and other rulings Parties: Centro Properties Limited - First Plaintiff CPT Manager Limited in its capacity as responsible entity of Centro Property Trust - Second Plaintiff Representation: Mr F Gleeson SC/Mr J R Williams - Plaintiffs Mr P R Whitford SC/Mr R M Foreman - Signing Senior Lenders by leave Mr A J Sullivan QC/Mr D R Sulan - J P Morgan Chase Bank NA by leave Mr R G McHugh SC/Mr D F C Thomas - PricewaterhouseCoopers by leave Mr W A D Edwards - Richard Kirby by leave Mr M A Izzo - Australian Securities and Investments Commission as amicus curiae Freehills - Plaintiffs Arnold Bloch Leibler - Signing Senior Lenders Corrs Chambers Westgarth - J P Morgan Chase Bank NA Mallesons Stephen Jaques - PricewaterhouseCoopers Maurice Blackburn Pty Limited - Richard Kirby File Number(s): 2011/00283647