· First, the risk that the consideration might not be paid, which in this case is addressed by the structure, to which I have already referred, provided by clauses 4.5(b) and 5 of the MCIL Scheme;
· Secondly, the "no shop, no talk, and no due diligence" restrictions contained in the Scheme Implementation Agreement, clause 13;
· Thirdly, the "break fee" provided for, in certain circumstances, by clause 14.2 of the Scheme Implementation Agreement;
· Fourthly, the deemed warranty - by which scheme shareholders are taken to have warranted to MCIL, CPPIB and the Bidder that all their shares are transferred to the bidder on a fully paid basis and free from all mortgages, charges, liens, encumbrances and interests of third parties - imposed by clause 8.3(b) of the MCIL Scheme, and the corresponding provision in the trust scheme;
· Fifthly, the ancillary transaction and the independent expert's report in respect of it;
· Sixthly, the broker handling fees;
· Seventhly, that the schemes are inter-conditional with the Bermuda Scheme, and that it is proposed there be simultaneous meetings in respect of all schemes; and
· Eighthly, the attitude so far indicated to the proposed scheme by the Supreme Court of Bermuda, as reported in Mr Hastings' affidavit of 30 April 2009.
13 Subject to the amendments to which I shall next refer, I am satisfied that, at this stage, none of these matters presents an insuperable impediment to ultimate approval of the scheme.
14 The plaintiffs have accepted a number of suggested amendments to the documentation. In respect of the Explanatory Statement to be contained in the Scheme Booklet, in order more accurately to reflect the opinion of the independent expert and the facts, the plaintiffs have agreed to incorporate, in the last bullet point on page 3 after the words "per MCG security" the additional matter, "although in the lower half of the range". In respect of the deemed warranty to which I have referred, in order more clearly to explain to participants its effect, the plaintiffs have agreed to add to paragraph 4.8 of the Explanatory Statement the following matter: "If the warranty is breached, scheme participants may be liable to pay to CPPIB or CCPL any amounts paid by CPPIB or CCPL to acquire clear title to MCG securities". I proposed this as otherwise, although a close reading of clause 4.8 and the deemed warranty itself would make the consequences clear enough to a lawyer, it would not necessarily be apparent to the lay readers that the deemed warranty would potentially result in their incurring a liability to pay amounts to the manager, CPPIB or the Bidder in the event of a breach. In order to address what appears to be a drafting glitch in the scheme documentation, the plaintiffs have agreed that clause 8.3(b) in the MCIL scheme and the corresponding provision in the trust scheme, should be amended, so that the first phrase reads: "MCIL Scheme shareholders are deemed to have warranted to MCIL that all their MCIL share schemes ... ".
15 Subject to those alterations being made, I would be prepared to make the orders in the short minutes of order in the scheme matter.
16 It has become common practice for the responsible entity of a registered scheme to seek judicial advice in respect of trust schemes of the kind involved here [Re Macquarie Capital Alliance Ltd [19]; Re Macquarie Private Capital A Limited [2008] NSWSC 323; (2008) 26 ACLC 366 [3]; Re Abacus Funds Management Ltd [2005] NSWSC 1309; (2005) 24 ACLC 211 [16]; Re Mirvac Limited [1999] NSWSC 457; (1999) 32 ACSR 107]. It is envisaged that, consistent with the usual practice in this field, a further application for judicial advice will be made, at the second hearing, with respect to the implementation of proposed resolutions, if they are approved at the scheme meeting [cf Re Macquarie Goodman Funds Management Ltd [2004] NSWSC 1197; (2004) 52 ACSR 194 [10].
17 The conclusions that I have already reached in respect of the corresponding MCIL scheme sufficiently establish that the trustee would be justified in convening a meeting of the trust for the purposes proposed. Similarly, my conclusion in respect of the MCIL Scheme that the Explanatory Statement (subject to the amendments to which I have referred) is appropriate, establishes that advice to that effect is warranted.
18 The third aspect of the advice sought is whether MCIL would be justified in proceeding on the basis that the proposed amendments to the MCI Trust Constitution, if approved, would be within the powers of alteration conferred by its Constitution, clause 24, and Corporations Act s 601GC. Cases such as Re Mirvac Limited [45] - [47], show that clause 24.1 is in sufficiently wide terms that amendments such as those proposed would be within its scope.
19 Accordingly, I am prepared to give judicial advice in accordance with the short minutes prepared in the judicial advice proceedings.
20 The plaintiffs have asked that I adjourn the proceedings to Monday, in order to permit the amendments to which reference has been made to be effected, and also to permit the proceedings in the Bermuda Court, which are to return there later this evening Sydney time, to be resolved.
21 Exhibits P1 and P2 will be marked as confidential exhibits and returned to the plaintiff, to be returned to the Court on Monday. I order that the contents of Exhibits P1 and P2, Exhibits PX01 - PX06 inclusive, and Annexure A to the affidavit of Kristen Wonjung Jung sworn 30 April 2009 not be disclosed or published other than to the parties or for the purposes of prosecution of the present application until further order. It is envisaged that that further order will be made when the matter returns before me on Monday.
22 I adjourn the proceedings to Monday 4 May 2009 at 10.30am before me.
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