National Bank of Greece and Athens SA v Metliss

What happened

The supplied judgment is Westpac Banking Corporation (ACN 007 457 141), in the matter of St George Bank Limited (ACN 055 513 070) [2010] FCA 148, decided by Jacobson J on 23 February 2010. Although the prompt’s title refers to National Bank of Greece and Athens SA v Metliss, that case is only one of the authorities mentioned in the Westpac judgment. The judgment being analysed is the Federal Court’s decision about deregistering St George Bank in connection with a statutory transfer to Westpac.

The background was a merger implementation agreement entered into by Westpac and St George Bank on 26 May 2008. On 17 November 2008, Lindgren J approved three schemes of arrangement: the Share scheme, the SAINTS scheme and the Option scheme. Westpac acquired all of the fully paid ordinary shares in St George Bank’s listed capital on 1 December 2008 ([2]–[3]).

At the time the schemes were considered, Westpac had foreshadowed that, subject to regulatory approvals and documentation, it intended to transfer all or substantially all of St George Bank’s assets and liabilities to Westpac. The contemplated mechanisms included the Financial Sector (Business Transfer and Group Restructure) Act 1999 (Cth) (the Transfer Act) and other legislation. Westpac also foreshadowed a later application for St George Bank’s deregistration under s 413(1)(d) of the Corporations Act 2001 (Cth) ([3]–[5]).

Westpac pursued a transfer under Part 3 Division 3 of the Transfer Act. The Act allowed two regulated bodies of the same kind to apply to APRA for approval of a voluntary transfer. In this instance, the two bodies were authorised deposit-taking institutions ([6]–[7]). Section 22 provided that when an APRA certificate issued under s 18 came into force, Westpac became St George Bank’s successor in law to the extent of the transfer ([8]).

The important qualification was that the transfer did not itself dissolve St George Bank. Jacobson J stated that a s 18 certificate transferred the assets and liabilities but “does not have the effect of dissolving the company” ([9]). The application therefore sought to coordinate the transfer with deregistration. APRA’s certificate provided for the total transfer to take effect on 1 March 2010 ([12]). The Court ordered deregistration to occur as soon as practicable after the certificate came into force, and, in any event, on the same day ([orders 2–3]).

Why the court decided this way

The central statutory question was whether the Court could make a deregistration order under s 413(1)(d) of the Corporations Act. Jacobson J described that provision as applying “in connection with a scheme of reconstruction or amalgamation” ([15]). The Court did not consider the schemes to be schemes of reconstruction, referring to Re South African Supply and Cold Storage and Psivida Limited v New Psivida Inc. It nonetheless held that the schemes were connected with an amalgamation of St George Bank and Westpac. The Court also noted that s 413(1) specifically provided for an order to be made later than the approval of the scheme ([15]).

The reasons also addressed the practical timing problem. The transfer certificate would make Westpac successor in law to St George Bank to the extent of the transfer, but it would not terminate St George Bank’s corporate existence. Westpac was concerned that a delay between the transfer and deregistration could create a “hiatus period” in which the doctrine of universal succession might, at least in theory, apply ([9]–[10]). The Court did not decide that the doctrine would apply. Rather, the possible hiatus was part of the stated reason for aligning the two legal events.

The Court also recorded the regulatory context. The Treasurer had consented to the total transfer and approved Westpac’s holding of a 100 per cent stake in St George Bank under s 14(1) of the Financial Sector (Shareholdings) Act 1998 (Cth) ([11]). APRA had issued its certificate, and ASIC had advised that it did not object to the orders ([12]–[13]). The Court said it was satisfied that the necessary approvals had been sought and that it was appropriate to make the orders ([15]).

The outcome followed that reasoning. Westpac was joined as a party. It had to provide the transfer certificate to ASIC as soon as practicable after receiving it and at least 24 hours before it came into force. ASIC was then to deregister St George Bank without winding up, on the same day the certificate came into force. Westpac was also required to lodge the orders and specified accompanying documents with ASIC by the stated deadline ([orders 1–4]).

Before and after state of the law

The judgment describes the legal position created by the Transfer Act and then applies the deregistration power in the Corporations Act. Before the transfer certificate came into force, St George Bank remained the transferring body and Westpac was the proposed receiving body. The earlier schemes had transferred the shares to Westpac, but the separate transfer of St George Bank’s business was still pending ([3], [6], [12]).

Once the s 18 certificate came into force, s 22 made Westpac St George Bank’s successor in law “to the extent of the transfer” ([8]). That statutory succession did not, by itself, dissolve St George Bank. The judgment expressly distinguishes the transfer of assets and liabilities from the company’s dissolution ([9]). Consequently, the transfer alone did not achieve the intended combination of transferring the business and ending St George Bank’s corporate existence.

The Court’s order supplied the separate deregistration step. It did not wind up St George Bank. Instead, ASIC was directed to deregister it under s 413(1)(d), with timing tied to the certificate coming into force ([orders 2–3]). The Court treated the approved schemes as connected with an amalgamation and relied on that connection to exercise the statutory power, notwithstanding its view that the schemes were not schemes of reconstruction ([15]).

The decision is narrow in what it establishes. It records that, on the facts and approvals before it, the Court considered a later deregistration order available in connection with the amalgamation and appropriate to coordinate with the statutory transfer. It does not set out a general test for when schemes are “in connection with” an amalgamation. Nor does it decide that universal succession necessarily applies whenever a transfer and deregistration are separated in time. The judgment describes that possibility as theoretical and does not give a separate ruling on its operation ([10]).

Key passages with plain-English translation

Paragraph 8: Section 22 made the receiving body the transferring body’s successor in law to the extent of the transfer. In plain English, the statutory certificate gave Westpac legal succession for the business and liabilities transferred, but only within the scope of that transfer.

Paragraph 9: The certificate transferred assets and liabilities but did not dissolve the transferring company. In plain English, St George Bank did not cease to exist just because its business had moved to Westpac. A separate legal step was needed to deregister it.

Paragraph 10: A gap between the transfer and deregistration could, “at least in theory”, give rise to universal succession. In plain English, Westpac identified a possible legal complication if the transfer happened while St George Bank remained registered. The Court noted the concern but did not decide that the doctrine would in fact operate.

Paragraph 15: The schemes were not schemes of reconstruction in the Court’s view, but were in connection with an amalgamation. In plain English, the Court did not rely on the reconstruction limb. It considered the amalgamation connection sufficient for the order sought under s 413(1)(d).

Orders 2 and 3: The certificate had to be given to ASIC at least 24 hours before coming into force, and deregistration was to occur on the same day it came into force. In plain English, the order was structured to coordinate notice and deregistration with the statutory transfer date.

What fact patterns trigger this precedent

The judgment is most relevant to a fact pattern involving a court-approved scheme, a statutory transfer of a regulated financial body’s business, and an intended deregistration without winding up. Its particular reasoning depends on the combination of several features: the transfer was to occur under the Transfer Act; the s 18 certificate would transfer the business and liabilities; s 22 would make the receiving body successor in law to the extent of the transfer; and the certificate would not dissolve the transferring company ([6]–[9]).

The decision may also be relevant where the proposed deregistration occurs after approval of a scheme, rather than being sought at the same time. Jacobson J expressly noted that s 413(1) permitted a later order after scheme approval ([15]). The Court’s stated basis was that the schemes were connected with an amalgamation, even though it did not regard them as schemes of reconstruction.

The judgment is not a general ruling on every corporate merger or every statutory transfer. It concerns the legislation and approvals recorded in the reasons, and its reasoning about universal succession is qualified. The Court said the doctrine was little used and described its possible application during a hiatus as theoretical ([10]). Accordingly, the decision does not establish that any delay between transfer and deregistration will necessarily produce universal succession, or that every transferor can be deregistered under the same provision.

A lawyer considering how this reasoning relates to another transaction would likely check the specific statutory transfer mechanism, whether the transferring entity survives the transfer, the connection between any scheme and an amalgamation, and the exact approval and timing requirements. Those matters are identified as relevant by this judgment; it does not resolve how different statutory provisions or transaction structures would be treated.

How later courts have treated it

The supplied judgment identifies earlier authorities but contains no information about how later courts treated Westpac Banking Corporation v St George Bank. It would therefore be unsupported to say from this source alone that a later court applied, followed, distinguished, or overruled the decision.

The authorities the judgment itself mentions have distinct roles in its reasoning. National Bank of Greece and Athens SA v Metliss is cited as an explanation of universal succession, with Jacobson J pointing to passages in speeches by Viscount Simonds, Lord Tucker and Lord Keith ([9]). Re South African Supply and Cold Storage and Psivida Limited v New Psivida Inc are mentioned in connection with the Court’s view that the schemes were not schemes of reconstruction ([15]). The two 2008 St George Bank decisions are referred to for descriptions of the schemes ([2]).

The existence of those citations should not be mistaken for a statement about later treatment of the 2010 decision. The available text provides no post-2010 case history, subsequent statutory amendments, or later judicial consideration. Any account of later treatment would need additional sources not contained in the supplied judgment.

Still-open questions

The reasons leave several questions unanswered. First, the judgment does not provide a detailed test for deciding when a scheme is “in connection with” an amalgamation for s 413(1)(d). It concludes that the schemes were so connected, but gives only a short explanation ([15]). The reasoning therefore establishes the Court’s conclusion on this transaction, not a comprehensive boundary for the phrase.

Second, the Court does not decide whether universal succession would actually have applied during a gap between transfer and deregistration. It records Westpac’s concern, describes the doctrine as little used, and says a hiatus could “at least in theory” give rise to it ([10]). The judgment does not analyse the doctrine’s detailed elements or resolve its application to the statutory transfer in question.

Third, the judgment does not explore the consequences of a certificate coming into force without a corresponding deregistration order, beyond the possible hiatus and continuing existence of the transferring company. It also does not explain what would happen if deregistration could not occur on the same day, or how the order’s timing would interact with a different certificate date. Its operative orders were tailored to the stated 1 March 2010 transfer date ([1], [12]; [orders 2–3]).

Fourth, the reasons do not discuss objections from creditors or other interested parties in detail. They record that ASIC did not object and that the application had been advertised in the Australian Newspaper on 15 February 2010 ([13]–[14]). They do not provide evidence of any opposition or a broader analysis of creditor protections. The judgment says the application was made in the interests of Westpac as well as creditors, but does not develop that point ([10]).

Finally, the judgment does not supply a general account of the relationship between the Transfer Act, the NSW legislation mentioned in the earlier affidavit, and the alternative Bank Mergers Act mechanism. The application before the Court proceeded under the Transfer Act. Its reasoning should be read on that basis, rather than as deciding questions about the alternative mechanisms mentioned in the background ([4], [6]).

This is general legal information, not legal advice. Zoe can make mistakes. Before acting on this, relying on it, or using any draft, have a qualified Australian lawyer check it.