In the matter of Webster Limited (No 2)

The case involved Webster Limited, where the company proposed a scheme of arrangement for the transfer of its shares. The dispute centred on the approval of this scheme under section 411(4)(b) of the Corporations Act 2001 (Cth). The ordinary shareholders had agreed to the scheme, but the preference shareholders had not. The court was tasked with determining whether the approval of the ordinary scheme by the court affected the preference shareholders in any general sense, particularly as the ordinary scheme was not contingent on the court's approval of the preference scheme.

The primary legal issue was whether the court's approval of the ordinary scheme of arrangement could be granted without the approval of the preference shareholders, given that the two schemes were not interdependent. This issue necessitated an examination of the statutory provisions and case law concerning the approval of schemes of arrangement under the Corporations Act. The court needed to assess if the preference shareholders' lack of agreement to their scheme could be overridden by the ordinary shareholders' approval and the court's subsequent endorsement of the ordinary scheme.

The court held that the approval of the ordinary scheme did not necessarily affect the preference shareholders in a general sense. It found that the two schemes were distinct and not contingent upon each other. Therefore, the ordinary shareholders' agreement to their scheme did not require the approval of the preference shareholders' scheme for the court to approve the ordinary scheme. The court reasoned that the statutory provisions allowed for the court to consider the ordinary scheme on its own merits, independent of the preference scheme. Consequently, the court granted approval for the ordinary scheme, without requiring the preference scheme to be approved by the court.

The final orders of the court approved the scheme of arrangement for the ordinary shareholders, while the preference shareholders' scheme remained unaddressed in this ruling. The court's decision highlighted the importance of distinguishing between different classes of shareholders and their respective rights when considering schemes of arrangement under the Corporations Act.