Lendlease RL (Rowville) Pty Ltd v Lendlease Capital Services Pty Ltd - [2018] FCA 1534 - FCA 2018 case summary — Zoe

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Lendlease RL (Rowville) Pty Ltd v Lendlease Capital Services Pty Ltd

[2018] FCA 1534

Federal Court of Australia|2018-10-09|Before: Yates J

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At a glance

Source facts

Court

Federal Court of Australia

Decision date

2018-10-09

Before

Yates J

Catchwords

CORPORATIONS - schemes for reconstruction involving compromises or arrangements - application for orders that companies convene meetings of members

Source

Original judgment source is linked above.

Catchwords

CORPORATIONS - schemes for reconstruction involving compromises or arrangements - application for orders that companies convene meetings of members

Judgment (14 paragraphs)

[1]

Pursuant to s 411(1) of the Corporations Act 2001 (Cth) (Corporations Act), there be convened by each of the plaintiffs named in the attached Schedule a separate meeting of the holder or holders of fully paid ordinary shares in the capital of each plaintiff (Members) to be held at Level 14, Tower Three, International Towers Sydney Exchange Place, 300 Barangaroo Avenue, Barangaroo, NSW 2000, on 16 October 2018 commencing at 12:30 pm (AEDT), for the purpose of considering and, if thought fit, approving with or without modifications, the scheme of arrangement or compromise proposed between such shareholder or shareholders and the relevant plaintiff (each a Scheme, and collectively, the Schemes), (together, the Scheme Meetings).
Pursuant to s 411(1) of the Corporations Act, the explanatory memorandum in respect of the Schemes, substantially in the form of the document at Tab 2 of Annexure 'NDC-1' to the affidavit of Mr Nathan Dean Cockerill dated 4 October 2018 read in this application (Explanatory Statement), be approved for distribution to the Members, including: (a) correction of any minor typographical or grammatical errors; and (b) any minor amendments required or approved by the Australian Securities and Investments Commission (ASIC).
Pursuant to s 1319 of the Corporations Act: (a) subject to lodgement of the Explanatory Statement with ASIC for registration pursuant to s 412(6) of the Corporations Act, service of the Explanatory Statement and notices of the Scheme Meetings may be effected by electronic means (including by email) or by hand delivery to a person who is a director, company secretary, proxy, corporate representative appointed under s 250D of the Corporations Act (Corporate Representative), or attorney under power, of each of the Members, at any time before the Scheme Meetings commence; (b) dispatch of the documents referred to in paragraph (a) above in general accordance with its terms is to be taken to be sufficient notice of the Scheme Meetings; (c) each Scheme Meeting is to proceed following the conclusion or adjournment of the Scheme Meeting that immediately preceded it; (d) the Scheme Meetings are to be chaired by Mr Tony Randello, or failing him, Mr Nathan Dean Cockerill (Chairman); (e) the Chairman of the Scheme Meetings has the power to adjourn the meetings in his absolute discretion; (f) each Member may appoint the Chairman as its proxy, Corporate Representative or attorney under a power, for the purposes of attending and voting at the relevant Scheme Meeting; (g) each Member, present by proxy, Corporate Representative or attorney under a power, shall constitute a quorum for the purposes of each Scheme Meeting in respect of each Scheme; (h) a proxy (substantially in accordance with Form 532), appointment of a Corporate Representative or power of attorney may be delivered to the Chairman of the Scheme Meetings at any time before the commencement of the Scheme Meetings; (i) a resolution put to the vote at each Scheme Meeting to approve each Scheme, or any modification to the relevant Scheme, may be decided by each Member or its representative (including its proxy, Corporate Representative or attorney under a power) signing a record of the resolution; (j) Rule 2.15 of the Federal Court (Corporations) Rules 2000 (Cth) (Rules) shall not apply to the Scheme Meetings, except for r 75-15(2) of the Insolvency Practice Rules (Corporations) 2016 (Cth).

[2]

Introduction 1 The plaintiffs seek orders providing for the convening of meetings in relation to proposed schemes of arrangement. The schemes of arrangement have been proposed for the purposes of, or in connection with, the reconstruction or amalgamation of companies within the Lendlease Capital Services Group. Most of the plaintiffs have participated in the Lendlease Retirement Living business (the LRL business). 2 There are 114 plaintiffs. A separate scheme is proposed between each plaintiff and its sole member. In the following paragraphs of these reasons, it is convenient to refer to each plaintiff as a scheme company and to the plaintiffs collectively as the scheme companies. 3 The scheme companies have either ceased to carry on business by December 2017 or have never traded at all. Subject to one exception, the scheme companies which have traded have transferred all their assets to third parties. The exception is Lendlease Primelife Limited (LLPL), which holds a net receivable of approximately $307,000 that relates to the sale of a resident loan portfolio in New Zealand. Each other scheme company had nil assets as at 30 June 2018. 4 Further, each scheme company's external liabilities were either nil or the subject of a provision reflected in the balance sheet extracted from the audited financial statements of the defendant, Lendlease Capital Services Pty Ltd (LCS). Each scheme company is now entirely funded by LCS. LCS is a wholly-owned subsidiary of Lendlease Corporation Limited (LLC), which is the ultimate holding company of each scheme company. 5 The only shares on issue in each scheme company are ordinary shares, other than in respect of Lakeside Gardens Management Pty Ltd and PLT Management Pty Ltd, where the only shares on issue are Class A shares. None of the shares of the scheme companies are quoted on the official list of the Australian Securities Exchange or any other financial market. 6 None of the scheme companies is, presently, a party to litigation.

[3]

The schemeS 7 It is proposed that: the property of each scheme company will, simultaneously with the property of every other scheme company, be transferred to and vested in LCS, without the need for any further act or deed; all liabilities of each scheme company will, simultaneously with the liabilities of every other scheme company, be transferred to and become liabilities of LCS, without the need for any further act or deed; all legal proceedings pending by or against any scheme company will be continued by or against LCS without the need for any further act or deed, other than an amendment of the record of the relevant court or tribunal; each scheme company will attend to such incidental, consequential and supplemental matters as are necessary to ensure that the scheme to which it is a party is fully and effectively carried out; and each scheme company will be deregistered by the Australian Securities and Investments Commission (ASIC), without winding up. 8 The objectives of the proposed reconstruction or amalgamation are to: materially reduce the administrative, accounting, audit, compliance and reporting costs of the Lendlease Capital Services Group by approximately $205,200 per annum; consolidate the ownership of any undertaking or business of a scheme company into LCS; and rationalise the number of companies in the Lendlease Capital Services Group, and eliminate the duplication of functions across the companies in that group. 9 These proposals will, in respect of each scheme company, affect the rights which its sole member has against the company as a shareholder, and diminish the value of the member's property represented by its shareholding in the company. The sole member of each scheme company will consent to the steps noted above notwithstanding any diminution in the value of that member's shareholding and the rights at law it may have in connection with the scheme. Further, each member waives any rights that it may otherwise have in connection with the scheme or the reconstruction or amalgamation effected by the scheme. In the circumstances, each scheme is a "compromise or arrangement" for the purposes of s 411(1) of the Act: AGL Energy Services (Queensland) Pty Ltd v AGL Energy Services Pty Ltd (No 2) [2010] FCA 453; Warrnambool Cheese and Butter Factory Limited v Warrnambool Cheese and Butter Factory Company Holdings Limited, in the matter of Warrnambool Cheese and Butter Factory Company Limited [2017] FCA 302 at [10] and the cases there cited. 10 LCS has been added as a defendant in the proceeding because it is the proposed transferee of the assets and liabilities of the scheme companies, and orders under s 413 of the Corporations Act 2001 (Cth) (the Act) will be sought: Royal Victorian Institute for the Blind Ltd v RBS.RVIS.VAF Ltd [2004] FCA 735; (2004) 206 ALR 581; see also SGIC Insurance Ltd v Insurance Australia Ltd [2004] FCA 1638 at [6] and Equatorial Mining Pty Ltd v Antofagasta Investment Company Ltd [2013] FCA 1452 at [29]. The evidence is that LCS is aware of this proceeding, waives formal service of the originating process and supporting affidavits, supports the application, and does not wish to appear.

[14]

Associate: Dated: 11 October 2017 Schedule Second Plaintiff ALLORA GARDENS PTY LTD ACN 073 480 225 Third Plaintiff AUSTRALIAN RETIREMENT SERVICES GROUP PTY. LTD. ACN 065 193 955 Fourth Plaintiff BURWOOD TERRACE PTY LTD Fifth Plaintiff COASTAL WATERS RETIREMENT VILLAGE PTY LIMITED Sixth Plaintiff FOREST HILLS VILLAGE PTY. LTD. Seventh Plaintiff GLENAEON RETIREMENT VILLAGE PTY LTD Eighth Plaintiff HENRY KENDALL (MORISSET) PTY LIMITED Ninth Plaintiff HENRY KENDALL BAYSIDE PTY. LIMITED Tenth Plaintiff HENRY KENDALL VILLAGE PTY. LIMITED Eleventh Plaintiff HOMESTAY VILLAGE CANNINGTON PTY LTD Twelfth Plaintiff HUNTER LODGE PTY. LTD. Thirteenth Plaintiff KEPERRA SANCTUARY PTY LIMITED Fourteenth Plaintiff KOOROOTANG COURT VILLAGE PTY. LTD. Fifteenth Plaintiff KOOROOTANG VILLAGE MANAGEMENT PTY. LTD. Sixteenth Plaintiff LAKESIDE GARDENS MANAGEMENT PTY LTD Seventeenth Plaintiff LENDLEASE AC (MORPETH) PTY LTD Eighteenth Plaintiff LENDLEASE PRIMELIFE LIMITED Nineteenth Plaintiff LENDLEASE PRIMELIFE PROPERTY MANAGEMENT PTY LTD Twentieth Plaintiff LENDLEASE PRIMELIFE QLD NO 1 PTY LTD Twenty First Plaintiff LENDLEASE PRIMELIFE WA NO 1 PTY LTD Twenty Second Plaintiff LENDLEASE RL (ABERVALE) PTY LTD Twenty Third Plaintiff LENDLEASE RL (ASHTON GARDENS) PTY LTD Twenty Fourth Plaintiff LENDLEASE RL (BELLFLOWER) PTY LTD Twenty Fifth Plaintiff LENDLEASE RL (BRENTWOOD) PTY LTD Twenty Sixth Plaintiff LENDLEASE RL (BRIGHTON CLASSIC RESIDENCES) PTY LTD Twenty Seventh Plaintiff LENDLEASE RL (BUDERIM GARDENS) PTY LTD Twenty Eighth Plaintiff LENDLEASE RL (BUDERIM MEADOWS) PTY LTD Twenty Ninth Plaintiff LENDLEASE RL (CHANCELLOR PARK) PTY LTD Thirtieth Plaintiff LENDLEASE RL (CLOSEBOURNE) PTY LTD Thirty First Plaintiff LENDLEASE RL (DEE WHY GARDENS) PTY LTD Thirty Second Plaintiff LENDLEASE RL (FIDDLERS GREEN) PTY LTD Thirty Third Plaintiff LENDLEASE RL (GARDENS ON LINDFIELD) PTY LTD Thirty Fourth Plaintiff LENDLEASE RL (GREENWICH) PTY LTD Thirty Fifth Plaintiff LENDLEASE RL (HEATHGLEN) PTY LTD Thirty Sixth Plaintiff LENDLEASE RL (ISABELLA GARDENS) PTY LTD Thirty Seventh Plaintiff LENDLEASE RL (LITTLE BAY) PTY LTD Thirty Eighth Plaintiff LENDLEASE RL (MARTHA'S POINT) PTY LTD Thirty Ninth Plaintiff LENDLEASE RL (MENZIES MALVERN) PTY LTD Fortieth Plaintiff LENDLEASE RL (NAMBOUR) PTY LTD Forty First Plaintiff LENDLEASE RL (NGUNNAWAL) PTY LTD Forty Second Plaintiff LENDLEASE RL (NOOSA OUTLOOK) PTY LTD Forty Third Plaintiff LENDLEASE RL (TANNOCH BRAE) PTY LTD Forty Fourth Plaintiff LENDLEASE RL (TREBARTHA) PTY LTD Forty Fifth Plaintiff LENDLEASE RL (WAVERLEY COUNTRY CLUB) PTY LTD Forty Sixth Plaintiff LENDLEASE RL (WOODSTOCK WEST) PTY LTD Forty Seventh Plaintiff LENDLEASE RL (YOWIE BAY) PTY LTD Forty Eighth Plaintiff LLP RV (CAESIA GARDENS) PTY LTD Forty Ninth Plaintiff LLP RV (CLOSEBOURNE VILLAGE) PTY LTD Fiftieth Plaintiff LLP RV (NELSONS GROVE) PTY LTD Fifty First Plaintiff LLP RV (ROCHFORD PLACE) PTY LTD Fifty Second Plaintiff LLP RV (THE TERRACES) PTY LTD Fifty Third Plaintiff LLP RV (TRINITY GREEN) PTY LTD Fifty Fourth Plaintiff LLP RV (WATERFORD PARK) PTY LTD Fifty Fifth Plaintiff LUTANDA MANOR RETIREMENT VILLAGE PTY. LTD. Fifty Sixth Plaintiff MEADOWVALE VILLAGE PTY. LTD. Fifty Seventh Plaintiff P.V. MANAGEMENT PTY LIMITED Fifty Eighth Plaintiff PEPPERTREE HILL MANAGEMENT PTY. LTD. Fifty Ninth Plaintiff PLT AB PTY LIMITED Sixtieth Plaintiff PLT EAGLEMOUNT PTY LTD Sixty First Plaintiff PLT HK HOLDINGS PTY LTD Sixty Second Plaintiff PORT PHILLIP PTY LIMITED Sixty Third Plaintiff PRIME LIFE (MT EVELYN) PTY. LTD. Sixty Fourth Plaintiff PRIME LIFE MANAGEMENT SERVICES PTY. LTD. Sixty Fifth Plaintiff PRIMELIFE (VERMONT) PTY LTD Sixty Sixth Plaintiff RBD TERRACES MANAGEMENT PTY LTD Sixty Seventh Plaintiff RETIREMENT VILLAGE PROPERTIES PTY. LTD. Sixty Eighth Plaintiff ST JAMES DEVELOPMENTS PTY. LTD. Sixty Ninth Plaintiff TIMBERSIDE VILLAS MANAGEMENT PTY LTD Seventieth Plaintiff WILLIAMSTOWN RANGE PTY LTD Seventy First Plaintiff RETIREMENT GUIDE MANAGEMENT PTY LTD Seventy Second Plaintiff LINDFIELD VILLAGE MANAGEMENT PTY LTD Seventy Third Plaintiff HIBISCUS RV MANAGEMENT PTY LTD Seventy Fourth Plaintiff CARLYLE RV MANAGEMENT PTY LTD Seventy Fifth Plaintiff BUDERIM GARDENS VILLAGE MANAGEMENT PTY. LTD. Seventy Sixth Plaintiff BRENTWOOD VILLAGE MANAGEMENT PTY LTD Seventy Seventh Plaintiff BELLFLOWER VILLAGE MANAGEMENT PTY LTD Seventy Eighth Plaintiff APC RV HOLDINGS PTY LTD Seventy Ninth Plaintiff ASHTON GARDENS VILLAGE MANAGEMENT PTY LTD Eightieth Plaintiff ANNESLEY LIFESTYLE CENTRE PTY LIMITED Eighty First Plaintiff CENTRAL COAST RETIREMENT VILLAGES PTY. LIMITED Eighty Second Plaintiff KOOROOTANG COURT ANNEXE PTY LTD Eighty Third Plaintiff LENDLEASE PRIMELIFE WA NO 2 PTY LTD Eighty Fourth Plaintiff LENDLEASE RETIREMENT LIVING SERVICES PTY LTD Eighty Fifth Plaintiff LENDLEASE RETIREMENT LIVING UNIT HOLDINGS PTY LTD Eighty Sixth Plaintiff LENDLEASE RETIREMENT VILLAGE HOLDINGS PTY LTD Eighty Seventh Plaintiff LENDLEASE RL (GW) PTY LTD Eighty Eighth Plaintiff HAZEN PTY. LTD. Eighty Ninth Plaintiff LENDLEASE RL (TWIN WATERS) PTY LTD Ninetieth Plaintiff LLP AGED CARE PROPERTIES PTY LIMITED Ninety First Plaintiff LLP CORPORATE SERVICES PTY LTD Ninety Second Plaintiff LLP DEVELOPMENT SERVICES PTY LTD Ninety Third Plaintiff LLP RETIREMENT VILLAGES MANAGEMENT SERVICES PTY LTD Ninety Fourth Plaintiff PLT A PTY LTD Ninety Fifth Plaintiff PLT ALLORA GARDENS PTY LTD Ninety Sixth Plaintiff PLT ELLIOT GARDENS PTY LTD Ninety Seventh Plaintiff PLT MANAGEMENT HK PTY LTD Ninety Eighth Plaintiff PLT MANAGEMENT PTY LTD Ninety Ninth Plaintiff PLT NEW ZEALAND PTY LIMITED One Hundredth Plaintiff PRIMELIFE (CONSTRUCTION SERVICES) PTY LTD One Hundred First Plaintiff RETIREMENT MANAGEMENT PTY LTD One Hundred Second Plaintiff TOWNSVILLE VILLAGE SERVICES PTY LTD One Hundred Third Plaintiff NAMBOUR VILLAGE SERVICES PTY LTD One Hundred Fourth Plaintiff NOOSA OUTLOOK VILLAGE SERVICES PTY LTD One Hundred Fifth Plaintiff MACKAY VILLAGE SERVICES PTY LTD One Hundred Sixth Plaintiff LINDFIELD VILLAGE SERVICES PTY LTD One Hundred Seventh Plaintiff CHANCELLOR PARK VILLAGE SERVICES PTY LTD One Hundred Eighth Plaintiff BUDERIM GARDENS VILLAGE SERVICES PTY. LTD. One Hundred Ninth Plaintiff BUDERIM MEADOWS VILLAGE SERVICES PTY LTD One Hundred Tenth Plaintiff BRENTWOOD VILLAGE SERVICES PTY LTD One Hundred Eleventh Plaintiff BELLFLOWER VILLAGE SERVICES PTY LTD One Hundred Twelfth Plaintiff ARGYLE VILLAGE SERVICES PTY LTD One Hundred Thirteenth Plaintiff ASHTON GARDENS VILLAGE SERVICES PTY LTD One Hundred Fourteenth Plaintiff LENDLEASE CAPITAL SERVICES RL HOLDING PTY LIMITED

Lendlease RL (Rowville) Pty Ltd v Lendlease Capital Services Pty Ltd

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (14 paragraphs)

Parties

Legislation Cited (3)

Cases Cited (6)

Cited By (1)