Cranswick Premium Wines Limited - [2003] FCA 138

FEDERAL COURT OF AUSTRALIA
Cranswick Premium Wines Limited [2003] FCA 138
CORPORATIONS – merger of two public listed companies by schemes of arrangement – shareholders optionholders and noteholders bound respectively by schemes – convertible note deed amended – optionholders constitute employees under option plan – schemes approved.
Corporations Act 2001 (Cth)
Federal Court (Corporations) Rules 2000
Re Challenge Bank Ltd (1995) 19 ACSR 421 cited
Re Chevron (Sydney) Ltd [1963] VR 249 applied
Re Foundation Healthcare Ltd (No 2) (2002) 43 ACSR 680 applied
Re NRMA Ltd (No 2) (2000) 34 ACSR 261 applied
Re Stockbridge Ltd (1993) 9 ACSR 637 applied
CRANSWICK PREMIUM WINES LIMITED
IN THE MATTER OF CRANSWICK PREMIUM WINES LIMITED ACN 000 024 304
N 3078 OF 2002
CONTI J
4 MARCH 2003
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 3078 OF 2002

IN THE MATTER OF CRANSWICK PREMIUM WINES LIMITED ACN 000 024 304

BETWEEN:

CRANSWICK PREMIUM WINES LIMITED ACN 000 024 304
PLAINTIFF

JUDGE:

CONTI J

DATE OF ORDER:

4 MARCH 2003

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1. The schemes of arrangement proposed to be made between the Applicant and its:
(a)Shareholders;
(b)Optionholders; and
(c)Noteholders,

copies of which are annexed to these orders and marked annexure ‘CS1’, ‘CS2’ and ‘CS3’ respectively (collectively the Cranswick Schemes) are approved pursuant to section 411(4) of the Corporations Act 2001 (Cth).

2.The Applicant be exempted from compliance with section 411(11) of the Corporations Act 2001 (Cth) in relation to the Cranswick Schemes.
3.A copy of these Orders be lodged with the Australian Securities and Investments Commission within 7 days of being entered.
4.These orders be entered forthwith.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 3078 OF 2002

IN THE MATTER OF CRANSWICK PREMIUM WINES LIMITED ACN 000 024 304

BETWEEN:

CRANSWICK PREMIUM WINES LIMITED ACN 000 024 304
PLAINTIFF

JUDGE:

CONTI J

DATE:

4 MARCH 2003

PLACE:

SYDNEY

REASONS FOR JUDGMENT

On 23 December 2002, I made orders pursuant to s 411(1) of the Corporations Act 2001 (Cth) (“the Act”) for the convening of meetings of the shareholders, optionholders and noteholders of Cranswick Premium Wines Limited (“Cranswick”) for the purpose of considering, and if thought fit, approving, with or without modification, schemes of arrangement for the merger of Cranswick (a public company) with another well known wine producer and distributor Evans & Tate Limited (“Evans & Tate”) (also a public company). My reasons for judgment in relation to the making of those orders, and the text of the orders, are recorded in Cranswick Premium Wines Limited [2002] FCA 1624.
Pursuant to s 411(4) of the Act, the schemes were required to be approved by a 75% majority of shareholders, optionholders and noteholders of Cranswick respectively voting in person or by proxy at the scheme meetings for each of those classes. Each of those meetings were duly convened and…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2003] FCA 138
Decision Date: 4 MARCH 2003

CaseChat Overview and Summary

Cranswick Premium Wines Limited recently had its proposed schemes of arrangement considered by the court. The applicant sought approval for three separate schemes, each involving different groups: the shareholders, optionholders, and noteholders. The dispute centred on the legality and fairness of these schemes under the Corporations Act 2001 (Cth). The court was tasked with determining whether the proposed arrangements met the statutory requirements and whether they were fair and reasonable to the various parties involved.

The primary legal issue the court had to resolve was whether the schemes complied with the statutory provisions under the Corporations Act 2001 (Cth). Specifically, the court needed to assess whether the schemes were properly structured, whether the requisite majorities were obtained, and if the schemes were fair and reasonable to all parties involved. Additionally, the court had to consider whether the applicant should be exempted from certain compliance requirements under the Act.

The court found that the proposed schemes were well-structured and had obtained the necessary approvals from the requisite majorities. The court also determined that the schemes were fair and reasonable to the shareholders, optionholders, and noteholders, considering the circumstances and the benefits each group would receive. The court was satisfied that the applicant had acted in good faith and that the exemptions from certain compliance requirements were warranted under the specific circumstances of the case. Consequently, the court approved the schemes and exempted the applicant from compliance with certain sections of the Corporations Act 2001 (Cth).

The court issued orders approving the schemes of arrangement, exempting the applicant from compliance with section 411(11) of the Corporations Act 2001 (Cth), and requiring the applicant to lodge a copy of the orders with the Australian Securities and Investments Commission within 7 days. These orders were entered forthwith, allowing the applicant to proceed with the implementation of the approved schemes.

Orders

Orders of the court

1. The schemes of arrangement proposed to be made between the Applicant and its:

(a) Shareholders;

(b) Optionholders; and

copies of which are annexed to these orders and marked annexure ‘CS1’, ‘CS2’ and ‘CS3’ respectively (collectively the Cranswick Schemes) are approved pursuant to section 411(4) of the Corporations Act 2001 (Cth).

2. The Applicant be exempted from compliance with section 411(11) of the Corporations Act 2001 (Cth) in relation to the Cranswick Schemes.

3. A copy of these Orders be lodged with the Australian Securities and Investments Commission within 7 days of being entered.

4. These orders be entered forthwith.

Note:

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

CONTI J

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: CONTI J

Full text does not contain this section.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 3078 OF 2002

BETWEEN:	CRANSWICK PREMIUM WINES LIMITED ACN 000 024 304 PLAINTIFF
JUDGE:	CONTI J
DATE OF ORDER:	4 MARCH 2003
WHERE MADE:	SYDNEY