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 1481
• Hearing dates: 1 December 2011
• Decision date: 01 December 2011
• Jurisdiction: Equity Division - Corporations List
• Before: Barrett J

Decision

I direct that no office copy of any of the orders under s 411(4)(b) of the Corporations Act 2001 made today be lodged with Australian Securities and Investments Commission before 11am Sydney time on 2 December 2011.

• Catchwords: PROCEDURE - order approving scheme of arrangement - application for stay pending consideration of possible appeal - nature of stay in the circumstances - short restraint on lodgment of office copy with ASIC
• Legislation Cited: Corporations Act 2001 (Cth), ss 411(4)(b), 411(10)
• Category: Interlocutory applications
• Parties: Centro Properties Limited - First Plaintiff; CPT Manager Limited in its capacity as responsible entity of Centro Property Trust - Second Plaintiff; PricewaterhouseCoopers - Defendant
• Representation: Mr F Gleeson SC/Mr J R Williams - Plaintiffs; Mr R G McHugh SC/Mr D F C Thomas - Defendant; Freehills - Plaintiffs; Mallesons Stephen Jaques - Defendant
• File Number(s): 2011/00283647

Judgment

(On stay of entry of orders)

1 The defendant has sought a stay of entry of the orders just pronounced (or perhaps a stay of execution) up to a point tomorrow. The plaintiffs oppose the application.

2 Various provisions concerning stay have been referred to but I do not think that any of them is particularly relevant.

3 The orders are statutory orders under s 411(4)(b) of the Corporations Act 2001 (Cth). Their existence alone is, as it were, their execution given the statutory scheme. I refer to s 411(10) under which a scheme takes effect when an office copy of the court's order is lodged with ASIC. The order is, as it were, a cog in the statutory machine that eventually produces legal consequences through s 411(10) upon the lodgement of an office copy.

4 In those circumstances, I accept the submission of the plaintiffs that the application is, in substance, an application for such order as will prevent lodgement under s 411(10) with ASIC.

5 The plaintiffs say that, given that characterisation, the order, if made at all, should only be made upon the giving by the defendant of the usual undertaking as to damages; and that, in view of the very significant financial ramifications of delay as the plaintiffs see them, such an undertaking is of itself insufficient and that there should be security for such the undertaking as to damages.

6 I have been told enough about the timetable, particularly in the evidence of Mr Smooker led orally this afternoon, to know that the prospects of very substantial prejudice to the plaintiffs will be real if they are not in a position to lodge the orders with ASIC and to make an announcement to ASX so that both those steps are completed by 12 noon tomorrow.

7 According to Mr Smooker's evidence, the position is that, if lodgement with ASIC is effected by 12 noon tomorrow, completion of the aggregation transaction will occur on 14 December; whereas if lodgement is effected tomorrow after 12 noon, there is a very substantial risk that the completion will not occur until 15 December, the due date of the senior debt. And if lodgment were not effected tomorrow but on some later day, there is virtual certainty that completion of the aggregation transaction will not occur on 14 December.

8 The defendant points to clause 4.4 of the senior lender schemes which says that if the schemes become effective but the implementation date will not be on or before 14 December 2011, then, on the effective date, the maturity date of the senior debt is taken to be extended from 15 December until the implementation date.

9 The implementation date is the date which is the second business day after the calculation date; the calculation date is the third business day after the scheme record date; and the scheme record date is 5pm on the seventh business day after the effective date.

10 I have not pieced all this together fully but it does seem clear that lodgment after tomorrow will cause the implementation date to be after 14 December but the effect of clause 4.4 will then be that the maturity date of the relevant debt will be extended.

11 The upshot of that is the defendant's submission that the timing is not as critical as the plaintiffs would suggest.

12 Against that, however, is the evidence that there is other debt, not being senior debt, that is also due on 15 December and that no such automatic extension provision exists in relation to that debt. Mr Smooker referred to debt of CAWF to the Commonwealth Bank of the order of $600 million secured on assets involved in the overall aggregation transaction.

13 The defendant acknowledges that that debt is not covered by the he extension provision in clause 4.4 of the senior lender schemes but points out that the CAWF debt does not directly involve the plaintiffs and the senior lenders, that is the parties to the particular schemes - added to which there could no doubt be a consensual extension of the maturity.

14 But the interrelated nature of the various elements of the aggregation is such, in my opinion, that it is both appropriate and necessary to have regard in the present context to possible consequences in respect of the CAWF debt.

15 The aggregation is a complex transaction. The upsetting of any one element could be fatal to the whole and matters should be approached on that basis.

16 The initial application was for an order holding the position until 2pm tomorrow. It was in that context that the criticality of lodgement by 12 noon tomorrow arose. In the course of submissions, there were then various references to 11am tomorrow.

17 I have come to the conclusion that there should be an order or direction that prevents lodgment with ASIC before 11am on 2 December 2011 and that there need not be any undertaking as to damages in that respect. I say that because I specifically canvassed with counsel for the plaintiffs the question whether anything would need to be done in the period of one hour between 11am and 12 noon tomorrow beyond simple mechanical delivery of documents to ASIC and ASX and the answer was that there was nothing else.

18 A deferral until 11am tomorrow, therefore, gives the defendants some opportunity to consider the matters they wish to consider with reference to the possibility of appeal and, if so advised, to make an approach to the Court of Appeal. At the same time, it allows the period of one hour, which the plaintiffs have indicated will be sufficient for the mechanical steps that need to be taken, if there is no restraint beyond 11am tomorrow.

19 I have made as part of the orders pronounced earlier a direction that the orders be entered forthwith. That stands. The orders may be taken out.

20 The embargo I am about to impose will go wholly to the matter of lodgment with ASIC which, as I have said, is the thing which, in statutory terms, causes the orders to produce effects and to have legally meaningful consequences.

21 In the 283647 of 2011 matter, I direct that no office copy of any of the orders under s 411(4)(b) of the Corporations Act 2001 made today be lodged with Australian Securities and Investments Commission before 11am Sydney time on 2 December 2011.

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Decision last updated: 01 December 2011