[2015] AATA  458

Division	GENERAL ADMINISTRATIVE DIVISION	
File Number(s)	2014/4170	
Re	Lantern Hotel Group	
	APPLICANT	
And	Australian Securities and Investments Commission	
	RESPONDENT	
Decision

Tribunal	Senior Member P W Taylor SC

Date	30 June 2015	
Place	Sydney	
I remit the matter to ASIC for reconsideration and direct that ASIC decide Lantern’s application in accordance with the proposal agreed between the parties and provided to the Tribunal on 24 June 2015.

........................................................................
Senior Member P W Taylor SC

Catchwords
CORPORATIONS - buy back from security holders - ASIC refusal to grant exemption from buy back provision in Corporations Act – exemption only sought in relation to a particular transaction independently assessed as reasonable and fair – decision under review set aside – decision subsequently remitted to ASIC
REASONS FOR DECISION

Senior Member P W Taylor SC

30 June 2015

1.	On 17 June 2015 I made a decision to set aside the decision under review, and indicated that I would make a substituted decision having the effect of exempting Lantern from compliance with the provisions of the Corporations Act 2001 that would otherwise preclude carrying out the proposed buy back transaction approved by the security holders on 31 July 2014.  I published reasons for my decision and required the parties to submit their proposal about the formal terms of the substituted decision.
2.	The parties subsequently submitted an agreed wording that expressed the substituted decision I had contemplated making.  However, that agreed wording included some minor details more appropriate for a decision made by the Australian Securities Investments Commission (ASIC) itself, rather than for a decision made by the Tribunal.  This was because of some essentially procedural aspects of the wording - such as the decision identifier and the provision for some relevant operative dates to be included.   I assume that these were details relevant to ASIC’s internal practices.
3.	I pointed out these minor aspects of the otherwise agreed wording, and suggested to the parties that the appropriate course might be for me to remit the matter to ASIC.  ASIC could then make a formal decision, consistent with my decision and reasons, but in a form that was compliant with the requirements of its internal practices and procedures.  The parties agreed to that course of action.
4.	Accordingly, I remit the matter to ASIC for reconsideration.  I direct that ASIC should decide Lantern’s application in accordance with the proposal agreed between the parties and provided to the Tribunal on 24 June 2015.  (I attach a copy of that proposal to these reasons. See Appendix A.)

5.	I certify that the preceding 4 (four) paragraphs are a true copy of the reasons for the decision herein of Senior Member P W Taylor SC	
...............................[sgd].........................................
Associate
Dated 30  June 2015

Date(s) of hearing	27 February 2015	
Date final submissions received	29 April 2015	
Counsel for the Applicant	Ms S Mirzabegian	
Solicitors for the Applicant	Baker & McKenzie 	
Counsel for the Respondent	Ms K Stern	
Solicitors for the Respondent	Australian Securities & Investments Commission	

APPENDIX A
Australian Securities and Investments Commission
Corporations Act 2001 -Subsection 601QA(1) - Declaration
Enabling Legislation
1.	The Australian Securities and Investments Commission (ASIC) makes this
instrument under subsection 601 QA(1) of the Corporations Act 2001(the Act).
Title
2.	This instrument is ASIC Instrument [insert].
Commencement
3.	This instrument commences on the day it is signed.
Exemptions
4.	Chapter 5C of the Act applies to Lantern RE in its capacity as the responsible entity of the LRET as if Chapter 5C of the Act were modified or varied as follows:
(a)	insert after subsection 601 GA(4) of the Act:
"(4A) Subsection (4) does not apply to a right to withdraw from a
registered scheme under an arrangement (off-market buy-back) for the responsible entity to selectively acquire interests in the scheme from a member if:
(a)	the responsible entity has power to make the off-market buy-back under the constitution;
(b)	the off-market buy-back has been approved by a special resolution of the members of the scheme passed at a general meeting of members of the scheme, with no votes being cast in favour of the resolution by any person whose interests in the scheme are proposed to be acquired;
(c)	the acquisition and purchase of interests under the off- market buy-back does not materially prejudice the responsible entity's ability to pay its creditors in relation to liabilities incurred by it as responsible entity of the scheme; and
(d)	the responsible entity does not buy an interest under the off-market buy-back except as part of a stapled security bought for the amount of 7.5 cents per Lantern Stapled Security

(4B) For the purposes of subsection (4A), stapled security means two or more financial products including at least one interest in a registered scheme where:
(a)	under the terms on which each of the products are to be traded, they must be transferred together; and
(b)	there are no financial products in the same class as those financial products which may be transferred separately."; and
(b) insert after section 601 GA of the Act:
"601GAAA Responsible entity to cancel interests
Immediately after registration of the transfer to the responsible entity of the interests acquired under an off market buy-back in accordance with subsection 601GA(4A), the responsible entity must cancel the interests it has bought.".
5.	Lantern RE in its capacity as the responsible entity of LRET does not have to comply with paragraph 601FC(1)(d) and Part 5C.6 of the Act in the case of a withdrawal in accordance with subsection 601GA(4A) of the Act, as notionally inserted.
Where this instrument applies
6.	This instrument applies where:
(a)	an offer was made by Lantern RE in its capacity as the responsible entity of LRET to Millinium to acquire all of Millinium's units in LRET held on behalf of the Borg Fund (Selective Withdrawal Offer) in accordance with a special resolution passed at a meeting of the Members on 31 July 2014, with no votes being cast in favour of the resolution by any person whose interests are proposed to be acquired;
(b)	the notice of meeting for the meeting of Members to consider the special resolution referred to in subparagraph (a) (Notice of Meeting), included a statement setting out all information known to the responsible entity at the time that was material to the decision of how to vote on the special resolution, including:
(i)	the number of Buy-Back Units and the number and percentage of Buy-Back Units being acquired under the Selective Withdrawal Offer;
(ii)	the particulars of the terms of the Selective Withdrawal Offer;
(iii)	the reasons for the Selective Withdrawal Offer;
(iv)	the interests of any directors of Lantern who may participate in the Selective Withdrawal Offer;
(v)	the financial effect of the Selective Withdrawal Offer on Lantern, how the Selective Withdrawal Offer will be funded by Lantern, what factors the Members should consider in voting on the special resolution and how the Selective Withdrawal Offer will affect control of Lantern;
(vi)	the advantages and disadvantages of the Selective Withdrawal Offer;
(c)	before the Notice of Meeting was sent to the Members, Lantern RE lodged with ASIC:

(i)	the Notice of Meeting; and 
(ii)	any document relating to the Selective Withdrawal Offer that accompanied the Notice of Meeting

7.	This instrument ceases to apply from [insert date].

Interpretation
8.	In this instrument:
Buy-Back Unit means a fully paid ordinary unit in LRET held by Millinium.
Lantern means a stapled entity comprising of Lantern Hotel Group Limited (ABN 71 145 967 899) and LRET.
Lantern RE means Lantern RE Limited (ABN 54 145 968 574).
Lantern Stapled Securities means a Unit and a Share, where:
(a)	under the terms on which each of the financial products are to be traded, they must be transferred together; and
(b)	there are no financial products in the same class as those financial products which may be transferred separately.
LRET means Lantern Real Property Trust (ARSN 108 982 627).
Member means a member of LRET.
Millinium means Millinium Asset Services Pty Limited as trustee for The Borg Fund (ABN 79 145 380 971 or its transferee, assignee or successor in that capacity.
Share means a fully paid ordinary share in Lantern Hotel Group Limited (ABN 71 145 967 899).
Unit means a fully paid unit in LRET.

Dated:	             2015

Signed by [ ]
as a delegate of the Australian Securities and Investments Commission