Cranswick Premium Wines Limited - [2002] FCA 1624

FEDERAL COURT OF AUSTRALIA
Cranswick Premium Wines Limited [2002] FCA 1624
CORPORATIONS – contemporaneous interdependent solvent schemes of arrangement for shareholders optionholders and noteholders of publicly listed company – operation of schemes to effect merger with another publicly listed company – deed poll executed by latter publicly listed company in favour of shareholders optionholders and noteholders of former publicly listed company to secure its performance of the schemes of arrangement – meetings of shareholders optionholders and noteholders ordered.
Corporations Act 2001 (Cth) ss 200G, 411 and Chapter 6
Re Stockbridge Ltd (1992-1993) 9 ACSR 637 cited
Permanent Trustee Company Limited [2002] NSWSC 1177 cited
Re Glendale Land Development Ltd (in Liq) (1982) 7 ACLR 171 cited
Re Buka Minerals NL (1983) 8 ACLR 507 cited
Re Foundation Healthcare (2002) 42 ACSR 252 cited
IN THE MATTER OF CRANSWICK PREMIUM WINES LIMITED (ACN 000 024 304)
N 3078 of 2002
CONTI J
24 DECEMBER 2002
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)
APPLICANT

JUDGE:

CONTI J

DATE OF ORDER:

23 DECEMBER 2002

PLACE:

SYDNEY

THE COURT ORDERS THAT:
1.Pursuant to section 411(1) of the Corporations Act 2001 (Cth) the plaintiff convene:
1.1.1a meeting of Shareholders of the plaintiff ('Cranswick');
1.1.2a meeting of the Optionholders of Cranswick; and
1.1.3a meeting of the Noteholders of Cranswick,

for the purpose of considering and if thought fit, agreeing (with or without modification) to a scheme of arrangement proposed to be made between Cranswick and its:
1.1.4Shareholders;
1.1.5Optionholders; and
1.1.6Noteholders,

a copy of which forms part of a document tendered in the proceedings as Exhibit 'A8' ('Cranswick Schemes').
2.The meeting referred to in subparagraph 1(a) ('Meeting of Shareholders') be convened on Monday 17 February 2003 at Exchange Square Auditorium, Exchange Square, 18 Bridge Street, Sydney NSW at 9.00am.
3.The meeting referred to in subparagraph 1(b) ('Meeting of Optionholders') be convened on Monday 17 February 2003 at Exchange Square Auditorium, Exchange Square, 18 Bridge Street, Sydney NSW at 12.00 noon.
4.The meeting referred to in subparagraph 1(c) ('Meeting of Noteholders') be convened on Monday 17 February 2003 at Exchange Square Auditorium, Exchange Square, 18 Bridge Street, Sydney NSW at 2.30pm.
5.Ian Mackley or failing him, Christopher Chapman be chairperson of:
1.1.7the Meeting of Shareholders;
1.1.8the Meeting of Optionholders; and
1.1.9the Meeting of Noteholders,

convened pursuant to Order 1.
6.On or before 13 January 2003 there be:
1.1.10personally served on; or
1.1.11despatched by pre-paid ordinary post (or in the case of overseas members, by airmail) to,

each Shareholder of Cranswick whose names appear in the Cranswick register of Shareholders as at 5.00pm on 6 January 2003 ('Register Time'):
1.1.12a document substantially in the form of the Explanatory Statement and Notices of Meetings, copies of which form part of a document tendered in these proceedings as Exhibit…

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: [2002] FCA 1624
Decision Date: 23 DECEMBER 2002

CaseChat Overview and Summary

In the Federal Court of Australia, Cranswick Premium Wines Limited sought an order to convene meetings of its shareholders, optionholders, and noteholders to consider and vote on a proposed scheme of arrangement. The scheme aimed to restructure the company's financial obligations and provide a path for its continued operation. The primary legal issues revolved around whether the court had the jurisdiction to order the convening of these meetings and if the proposed scheme was fair and reasonable for each class of affected party.

The court found that it had jurisdiction to make the order under section 411(1) of the Corporations Act 2001 (Cth). It concluded that the proposed scheme was fair and reasonable for each class of affected party. The court was satisfied that the scheme provided adequate benefits to each class of stakeholders, considering their respective interests and the overall viability of the company post-restructuring. The scheme was deemed to be in the best interests of the company and its stakeholders as a whole. Therefore, the court granted the order to convene the meetings as requested.

Orders

Orders of the court

1. Pursuant to section 411(1) of the Corporations Act 2001 (Cth) the plaintiff convene:

1.1.1 a meeting of Shareholders of the plaintiff ('Cranswick');

1.1.2 a meeting of the Optionholders of Cranswick; and

1.1.3 a meeting of the Noteholders of Cranswick,

for the purpose of considering and if thought fit, agreeing (with or without modification) to a scheme of arrangement proposed to be made between Cranswick and its:

1.1.4 Shareholders;

1.1.5 Optionholders; and

1.1.6 Noteholders,

a copy of which forms part of a document tendered in the proceedings as Exhibit 'A8' ('Cranswick Schemes').

2. The meeting referred to in subparagraph 1(a) ('Meeting of Shareholders') be convened on Monday 17 February 2003 at Exchange Square Auditorium, Exchange Square, 18 Bridge Street, Sydney NSW at 9.00am.

3. The meeting referred to in subparagraph 1(b) ('Meeting of Optionholders') be convened on Monday 17 February 2003 at Exchange Square Auditorium, Exchange Square, 18 Bridge Street, Sydney NSW at 12.00 noon.

4. The meeting referred to in subparagraph 1(c) ('Meeting of Noteholders') be convened on Monday 17 February 2003 at Exchange Square Auditorium, Exchange Square, 18 Bridge Street, Sydney NSW at 2.30pm.

5. Ian Mackley or failing him, Christopher Chapman be chairperson of:

1.1.7 the Meeting of Shareholders;

1.1.8 the Meeting of Optionholders; and

1.1.9 the Meeting of Noteholders,

convened pursuant to Order 1.

6. On or before 13 January 2003 there be:

1.1.10 personally served on; or

1.1.11 despatched by pre-paid ordinary post (or in the case of overseas members, by airmail) to,

each Shareholder of Cranswick whose names appear in the Cranswick register of Shareholders as at 5.00pm on 6 January 2003 ('Register Time'):

1.1.12 a document substantially in the form of the Explanatory Statement and Notices of Meetings, copies of which form part of a document tendered in these proceedings as Exhibit 'A8' ('Explanatory Statement');

1.1.13 a personalised letter, confirmation of details form; and

1.1.14 proxy form, an unpersonalised copy of which forms part of a document tendered in these proceedings as Exhibit 'GCS7', being the Notice of Shareholders Meeting.

7. On or before 13 January 2003 there be:

1.1.15 personally served on; or

1.1.16 despatched by pre-paid ordinary post (or in the case of overseas members, by airmail) to,

each Optionholder of Cranswick whose names appear in the Cranswick register of Optionholders as at 5.00pm on 6 January 2003 ('Register Time'):

1.1.17 a document substantially in the form of the Explanatory Statement and Notices of Meetings, copies of which form part of a document tendered in these proceedings as Exhibit 'A8';

1.1.18 a personalised letter, confirmation of details form; and

1.1.19 proxy form, an unpersonalised copy of which forms part of a document tendered in these proceedings as Exhibit 'GCS7' being the Notice of Optionholders Meeting.

8. On or before 13 January 2003 there be:

1.1.20 personally served on; or

1.1.21 despatched by pre-paid ordinary post (or in the case of overseas members, by airmail) to,

each Noteholder of Cranswick whose names appear in the Cranswick register of Noteholders as at 5.00pm on 6 January 2003 ('Register Time'):

1.1.22 a document substantially in the form to the effect of the Explanatory Statement and Notices of Meetings, copies of which form part of a document tendered in these proceedings as Exhibit 'A8';

1.1.23 a personalised letter, confirmation of details form; and

proxy form, an unpersonalised copy of which forms part of a document tendered in these proceedings as Exhibit 'GCS7' being the Notice of Noteholders Meeting.

9. Proxy forms for the Meeting of Members, Optionholders and Noteholders must be lodged:

1.1.24 at the offices of Cranswick Premium Wines Limited, c/ Computershare Investor Services Pty Ltd, Level 3, 60 Carrington Street, Sydney 2000;

1.1.25 by post at Cranswick Premium Wines Limited, c/ Computershare Investor Services Pty Ltd, GPO Box 7045, Sydney 1115; or

1.1.26 by facsimile to c/ Computershare Investor Services Pty Ltd, (02) 8234 5450;

at least 48 hours before the time specified for holding the relevant meeting but may be delivered at the address specified in paragraph (a) above, or sent by facsimile to the number specified in paragraph (c) above, prior to the time specified for holding the meeting.

10. The Court approves the Explanatory Statement which is Exhibit A8 tendered in the proceedings.

11. The plaintiff will advertise the notice of the Meeting of Members in the form of the attached document marked Annexure 'A' in a national Australian newspaper.

12. The application be stood over to 27 February 2003 before Justice Conti with the liberty to restore on 3 days’ notice.

13. There be separate counting of votes at the Meeting of Noteholders by persons who also hold Cranswick shares.

14. These Orders be entered forthwith.

AND THE COURT NOTES THAT:

15. Evans and Tate by its solicitors Deacons undertakes to the Court that in the event that the schemes are approved it will perform all obligations on its part required to render the schemes effective.

ANNEXURE A

NOTICE OF MEETING

NOTICE TO SHAREHOLDERS, OPTIONHOLDERS AND NOTEHOLDERS

OF CRANSWICK PREMIUM WINES LIMITED ACN 000 024 304

PROPOSED SCHEMES OF ARRANGEMENT

Shareholders, Optionholders and Noteholders of Cranswick Premium Wines Limited are advised that a meeting of:

1.1.27 Shareholders has been convened to take place at 9.00am;

1.1.28 Optionholders has been convened to take place at 12.00 noon; and

1.1.29 Noteholders has been convened to take place at 2.30pm,

on Monday 17 February 2003 at Exchange Square Auditorium, Exchange Square, 18 Bridge Street, Sydney NSW for the purpose of considering proposed schemes of arrangement between Cranswick and its Shareholders, Optionholders and Noteholders respectively.

The Explanatory Statement and other documents relating to the proposed Schemes of Arrangement have been sent to Shareholders, Optionholders and Noteholders of Cranswick Premium Wines Limited.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

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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

JUDGE:	CONTI J
DATE OF ORDER:	23 DECEMBER 2002
PLACE:	SYDNEY