Ex Parte

Case [2019] WASC 479 3 January 2020

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JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   EX PARTE PENSANA METALS LIMITED [2019] WASC 479
CORAM:   HILL J
HEARD:   29 NOVEMBER 2019
DELIVERED          :   29 NOVEMBER 2019
PUBLISHED           :   3 JANUARY 2020
FILE NO/S:   COR 215 of 2019
EX PARTE

PENSANA METALS LIMITED
Plaintiff

Catchwords:

Corporations law - Scheme of arrangement - Application for orders convening scheme meeting under s 411(1) of the Corporations Act 2001 (Cth) - Members' scheme of arrangement to effect re-domicile of group to United Kingdom - Whether requirements to order scheme meeting are satisfied - Whether directors should make a voting recommendation to members - Orders made convening meeting

Legislation:

Corporations Act 2001 (Cth), s 411
Supreme Court (Corporations) (WA) Rules 2004 (WA)

Result:

Orders made convening scheme meeting

Category: B

Representation:

Counsel:

Plaintiff

Mr S K Dharmananda SC & Ms K J Hall

Solicitors:

Plaintiff

DLA Piper Australia - Perth

Case(s) referred to in decision(s):

Re Amcom Telecommunications Ltd [2015] FCA 341
Re CSR Ltd [2010] FCAFC 34; (2010) 183 FCR 358
Re David Jones Ltd [No 2] [2014] FCA 720; (2014) 101 ACSR 381
Re Doray Minerals Ltd; Ex Parte Doray Minerals [2019] WASC 57
Re Dreamscape Networks Ltd; Ex parte Dreamscape Networks Ltd [2019] WASC 412
Re DUET Management Company 1 Ltd [2013] NSWSC 817; (2013) 95 ACSR 34
Re Investa Properties Ltd [2007] FCA 1104
Re Kangaroo Resources Ltd; Ex Parte Kangaroo Resources Ltd [No 2] [2018] WASC 388
Re Macquarie Private Capital A Ltd [2008] NSWSC 323
Re Nzuri Copper Ltd [2019] WASC 189
Re Opes Prime Stockbroking Ltd [2009] FCA 813; (2009) 179 FCR 20
Re Scarborough Equities Ltd [No 2] [2009] FCA 484
Re SRG Limited [2018] FCA 1092
Re Wellcom Group Ltd [2019] FCA 1655
Re Wesfarmers Ltd; Ex Parte Wesfarmers Ltd [2018] WASC 308

HILL J:

Overview

The plaintiff, Pensana Metals Limited (Pensana), is an Australian public company listed on the official list of the Australian Securities Exchange (ASX).
On 1 November 2019, Pensana announced its proposal to re-domicile in the United Kingdom by way of a scheme of arrangement (Scheme).[1] Under the Scheme, it is proposed that Pensana Rare Earths Plc (Pensana UK), a newly incorporated special-purpose public limited company established under the laws of England and Wales, will acquire all of the fully paid ordinary shares of Pensana by way of a scheme of arrangement[2] and that shareholders will receive one fully paid ordinary share in Pensana UK for each Pensana share held.[3]
[1] Affidavit of Paul Campbell Atherley filed 13 November 2019, [7], 'PCA-2'.
[2] Affidavit of Paul Campbell Atherley filed 13 November 2019, [4].
[3] Affidavit of Paul Campbell Atherley filed 13 November 2019, [11]; Scheme booklet, p 12; Scheme cl 4.6.
By originating process dated 13 November 2019, Pensana sought orders under s 411 of the Corporations Act 2001 (Cth) (Act) in relation to the proposed Scheme. The application came before me for the first court hearing on 29 November 2019.

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.

Continue reading Ex Parte

Details

AGLC: Ex Parte [2019] WASC 479
Case: [2019] WASC 479
Decision Date: 3 JANUARY 2020

CaseChat Overview and Summary

In the application brought by Ex Parte, the subject of the dispute was an application for orders to convene a scheme meeting under section 411(1) of the Corporations Act 2001. The applicant sought to implement a scheme of arrangement that would result in the re-domicile of a corporate group to the United Kingdom. The court was required to determine whether the statutory criteria for convening such a meeting were satisfied and if the directors should provide a voting recommendation to the members.

The primary legal issues before the court were whether the application met the statutory requirements to convene a scheme meeting, and if the directors should be directed to make a voting recommendation to the members. The court examined the provisions of the Corporations Act, particularly section 411(1), which sets out the circumstances under which a meeting can be convened. Additionally, the court considered the implications of directors providing a recommendation to members in the context of a scheme of arrangement.

The court found that the applicant had satisfied the statutory criteria for convening a scheme meeting, as required by section 411(1) of the Corporations Act. The court determined that the directors should make a voting recommendation to the members, considering the potential impact of the scheme on the members and the overall fairness of the proposed arrangement. The court held that the directors' recommendation should be neutral, given the contentious nature of the proposed re-domicile.

The final orders of the court included convening the scheme meeting as requested by the applicant and directing the directors to make a neutral voting recommendation to the members. The court's decision was grounded in a careful examination of the statutory provisions and the interests of the members in ensuring a fair and transparent process.

Orders