Energex Ltd v Elkington

Case [2002] QSC 363

SUPREME COURT OF QUEENSLAND

CITATION:

Energex Ltd v Elkington & Ors [2002] QSC 363

PARTIES:

ENERGEX LIMITED (ACN 078 849 055)
(applicant)
v
GORDON BRADLEY ELKINGTON AND OTHERS/ being persons identified in Schedule A of the Originating Application
(respondent)

FILE NO:

3973 of 2001

DIVISION:

Trial Division

DELIVERED ON:

8 November 2002

DELIVERED AT:

Brisbane

HEARING DATE:

19, 20, 21 June 2002

JUDGE:

Mackenzie J

ORDERS:

1.     I order that the acquisition of securities covered by the compulsory acquisition notices issued by the applicant on 5 March 2001 in relation to the preference shares in Allgas Energy Ltd, on the terms set out therein be approved.

2.     I give liberty to the parties to make submissions as to costs, in writing, within 10 days of delivery of these reasons, and in particular, as to whether there is any reason why the prima facie rule in s 664F(4) should not be applied.

CATCHWORDS:

CORPORATIONS – TAKE-OVER OFFERS – TAKE-OVER OFFERS AND STATUTORY CONTROL OF SHARE ACQUISITION – STATUTORY CONTROL OF SHARE ACQUISITIONS – where an application for an order for approval of acquisition of securities – where issue of compulsory acquisition notices in relation to preference shares – application of statutory framework

CORPORATIONS – CONSTITUTION AND LEGAL CAPCITY – CORPORATE FINANCE – SHARES – where a price offered for shares – determination of “fair value” – whether premium for forcible taking considered as a special value – whether taxation advantage considered as a special value – whether administrative savings considered as a special value – consideration of cases

CONSTITUTIONAL LAW – POWERS WITH RESPECT TO PROPERTY – POWER TO ACQUIRE PROPERTY ON JUST TERMS - where s 51 (xxxi) Constitution (Cth) applies– whether invalid delegation of power by Queensland legislature.

Constitution 1901 (Cth), s 51 (xxxi)
Corporate Law Economic Reform Program Act 1999 (Cth)
Corporations Act 2001 (Cth), Pt 6A, Pt 6A.2, Pt 6A.4,
s 664A, s 664C, s 664F, s 667A, s 667AA
Corporations Law Act 1989 (Cth) (repealed), Ch 2J, s 256B, s 664A, s 664C, s 664F, s 667A, s 667AA
Government OwnedCorporations Act 1993 (Qld), Pt 14, s 82

Austrim Nylex Ltd v Kroll (2001) VSC 168, considered
Austrim Nylex Ltd v Kroll (2002) 42 ACSR 18, applied
Capricorn Diamonds Investments Pty Ltd v Catto (2002) 41 ACSR 376, applied
Gambottov WCP Ltd (1995) 182 CLR 432, considered
Re Elders Australia; Super John Pty Ltd v Futuris Rural Pty Ltd (1998) FCA 1377, applied
Re Goodyear Australia Limited; Kelly-Springfield Australia Pty Ltd  v Green (2002) 167 FLR 1, applied
Melcann v Super John Pty Ltd (1994) 13 ACLC 92, considered
Mordecai v Mordecai (1998) 12 NSWLR 58, considered
Pauls Ltd v Dwyer (2001) 19 ACLC 959, considered
Pauls Ltd v Elkington (2001) QCA 414, applied
Spencer v The Commonwealth (1906) 5 CLR 418, considered
Teh v Ramsay Centauri Pty Ltd (2002) 42 ACSR 354, considered
Winpar Holdings Ltd v Goldfields Kalgoorlie Ltd (2000) 18 ACLC 665 ,…

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AGLC
Energex Ltd v Elkington [2002] QSC 363
Case
[2002] QSC 363
Decision Date

CaseChat Overview and Summary

Energex Ltd applied to the court for an order approving the acquisition of securities in Allgas Energy Ltd, including preference shares, pursuant to the statutory framework. The dispute arose from the compulsory acquisition notices issued in relation to these preference shares. The central legal issues were the determination of the "fair value" of the shares, whether certain premiums or advantages should be considered as special values, and the validity of the Queensland legislature's delegation of power under section 51(xxxi) of the Constitution. The court needed to decide whether the acquisition terms complied with the statutory provisions and if the Queensland legislative delegation of power was valid.

The court addressed the determination of "fair value" by considering various factors, including premiums for a forcible taking, taxation advantages, and administrative savings. It examined relevant case law to determine whether these factors constituted special values. The court also evaluated the validity of the Queensland legislative delegation of power under section 51(xxxi) of the Constitution, assessing whether it was an invalid delegation. The court found that the acquisition terms met the statutory requirements and that the delegation of power was valid.

Following the court's analysis, it ordered the approval of the acquisition of securities covered by the compulsory acquisition notices issued by Energex Ltd on 5 March 2001. The court also granted liberty to the parties to make written submissions regarding costs within ten days of the delivery of the reasons, particularly concerning the application of the prima facie rule in section 664F(4). This ruling ensures that the acquisition process adheres to statutory requirements and maintains the validity of the legislative delegation of power.

Orders

Orders of the court

1. I order that the acquisition of securities covered by the compulsory acquisition notices issued by the applicant on 5 March 2001 in relation to the preference shares in Allgas Energy Ltd, on the terms set out therein be approved.

2. I give liberty to the parties to make submissions as to costs, in writing, within 10 days of delivery of these reasons, and in particular, as to whether there is any reason why the prima facie rule in s 664F(4) should not be applied.

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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