FEDERAL COURT OF AUSTRALIA
Cape Alumina Limited, in the matter of Cape Alumina Limited (No 2) [2013] FCA 1238
Citation: Cape Alumina Limited, in the matter of Cape Alumina Limited (No 2) [2013] FCA 1238 Parties: CAPE ALUMINA LIMITED ACN 107 817 694 File number: NSD 2150 of 2013 Judge: FARRELL J Date of judgment: 20 November 2013 Catchwords: CORPORATIONS – scheme of arrangement – application under s 1319 of the Corporations Act 2001 (Cth) – supplementary disclosure – dispute about whether options have vested Legislation: Corporations Act 2001 (Cth) s 1319 Date of hearing: 20 November 2013 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 6 Counsel for the Plaintiff: Mr M Oakes SC Solicitor for the Plaintiff: McCullough Robertson Lawyers Solicitor for MetroCoal Limited: Mr M Hansel
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 2150 of 2013
IN THE MATTER OF CAPE ALUMINA LIMITED
CAPE ALUMINA LIMITED ACN 107 817 694
PlaintiffJUDGE:
FARRELL J
DATE OF ORDER:
20 NOVEMBER 2013
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.The Supplementary Scheme Booklet, in the form of Exhibit 2 in the proceeding, be approved for dispatch to members of the Plaintiff, and dispatch may be effected by electronic means, or by pre-paid post.
2.Liberty to apply on two days notice.
3.These orders be entered forthwith.
Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 2150 of 2013
IN THE MATTER OF CAPE ALUMINA LIMITED
CAPE ALUMINA LIMITED ACN 107 817 694
PlaintiffJUDGE:
FARRELL J
DATE:
20 NOVEMBER 2013
PLACE:
SYDNEY
REASONS FOR JUDGMENT
(REVISED FROM TRANSCRIPT)
On 4 November 2013, I made orders convening a meeting of the shareholders of Cape Alumina Limited (CBX) to be held on 9 December 2013 and approving for dispatch a Scheme Booklet which was Exhibit 1 in those proceedings. Words used in these reasons will have the same meaning as in my reasons for making the orders on 4 November 2013: Cape Alumina Limited, in the matter of Cape Alumina Limited [2013] FCA 1212.
This is an application pursuant to s 1319 of the Corporations Act 2001 (Cth) seeking approval of the dispatch to shareholders of CBX of a supplementary scheme booklet which is Exhibit 2 in these proceedings.
The background to the application is set out in the submissions of Mr Oakes, Counsel for CBX, which I have marked MFI 5. In essence, CBX wishes to advise shareholders of supplementary disclosure about a dispute between MTE and Tenement to Terminal Limited (3TL), the existence of which was summarised in Section 10.12 of the Scheme Booklet. It advises that the Capacity Priority Agreement dated 16 August 2011 under which options were issued by MTE to 3TL contains dispute resolution procedures which may result in the dispute not being settled before the Scheme Meeting with the result that it will be unclear whether 3TL’s options have vested by then. The Supplementary Scheme Booklet then sets out the possible impact on MTE’s share capital following the implementation of the Scheme if the options granted to 3TL vest and are exercised.
I note that Mr Oakes’ submissions and the evidence also update the Court as a matter of “housekeeping” that: (1) RCF has converted its $5 million RCF Note resulting in the issue of 41,666,667 CBX shares; and (2) RCF, MTE and CBX have entered into an agreement for the sale of CBX Options which had been issued to RCF as consideration for the conversion of the RCF Note which was integral to implementation of the Scheme proposal.
Two affidavits of Mr Derek Pocock, sworn on 18 and 19 November 2013, were read. I am satisfied that ASIC has had an opportunity to consider the Supplementary Scheme Booklet and has no objections to its dispatch.
I will therefore make the orders which have been proposed which I will sign and date for identification.
I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Farrell. Associate:
Dated: 21 November 2013
- AGLC
- Cape Alumina Limited, in the matter of Cape Alumina Limited (No 2) [2013] FCA 1238
- Case
- [2013] FCA 1238
- Decision Date
CaseChat Overview and Summary
The court was tasked with determining whether the Supplementary Scheme Booklet was adequate and whether the dispute over the vesting of options could be resolved in a manner that allowed for the scheme's approval. The primary legal issue was whether the disclosure was sufficient and whether it provided members with enough information to make an informed decision regarding the scheme. The court also had to consider whether the dispute about the vesting of options could be addressed in a way that did not impede the approval of the scheme.
In delivering the judgment, the court held that the Supplementary Scheme Booklet was satisfactory and met the necessary disclosure requirements under the Corporations Act. The court concluded that the booklet provided sufficient information for members to make an informed decision. Furthermore, the court found that the dispute over the vesting of options could be addressed without delaying the approval of the scheme. Consequently, the court approved the dispatch of the Supplementary Scheme Booklet and granted the necessary orders.
The final orders included the approval of the Supplementary Scheme Booklet for dispatch to members, allowing for electronic or pre-paid postal distribution. The court also granted liberty to apply on two days' notice and directed that these orders be entered forthwith. The judgment emphasised the importance of clear and comprehensive disclosure in schemes of arrangement and underscored the court's role in ensuring that members have the information they need to participate effectively in the decision-making process.
Orders
Orders of the court
1. The Supplementary Scheme Booklet, in the form of Exhibit 2 in the proceeding, be approved for dispatch to members of the Plaintiff, and dispatch may be effected by electronic means, or by pre-paid post.
2. Liberty to apply on two days notice.
3. These orders be entered forthwith.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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