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In the matter of Wollongong Coal Limited

In the matter of Wollongong Coal Limited

Case [2017] NSWSC 201 7 March 2017

Share Capital

Statutory Interpretation

Judicial Review

Corporate Law & Governance

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Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Wollongong Coal Limited [2017] NSWSC 201
Hearing dates: 2 March 2017
Decision date: 07 March 2017
Jurisdiction: Equity - Corporations List
Before: Black J
Decision:
Dismiss the Plaintiff’s Originating Process.

Catchwords: CORPORATIONS – share capital – share capital transactions – where company seeks order allowing it to purchase shares in itself, without shareholder approval of selective buy-back, to implement settlement of other proceedings – whether Corporations Act 2001 s 259A(c) confers a power on the Court to make such an order – whether such an order ought to be made.
Legislation Cited: - Civil Procedure Act 2005 (NSW), s 56
- Company Law Review Act 1997 (Cth)
- Corporations Act 2001 (Cth), Chs 2E, 6, Pts 2J.1–2J.2, ss 64, 208, 216, 233(1)(e), 257A, 257D, 257H, 259A, 259D, 471B, 477(2A), 606, 609(4), 611, 1322
Cases Cited: - Australian Securities Commission v Marlborough Gold Mines Ltd [1993] HCA 15; (1993) 177 CLR 485
- Carr v Finance Corp of Australia Ltd (No 1) [1981] HCA 20; (1981) 147 CLR 246
- Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89
- M Dalley & Co Pty Ltd v Sims (1968) 120 CLR 603
- Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia [1998] HCA 30; (1998) 195 CLR 1
- Quinlan v Fiboze Pty Ltd (1998) 14 ACLR 312; 6 ACLC 993
- Re M Dalley & Co Pty Ltd (1968) 1 ACLR 489
- Re Summit Resources (Aust) Pty Ltd [2012] WASC 125; (2012) 42 WAR 401; 261 FLR 365; 88 ACSR 60
- Re Taipan Resources NL (No 9) [2001] ATP 4; (2001) 38 ACSR 111
- Re Wave Capital Ltd [2003] FCA 969; (2003) 47 ACSR 418
- U&D Coal Ltd v Australian Kunqian International Energy Co Pty Ltd [2014] VSC 386
- Weinstock v Beck [2013] HCA 14; (2013) 251 CLR 396; 93 ACSR 231
- Winpar Holdings Ltd v Goldfields Kalgoorlie Ltd [2001] NSWCA 427; (2001) 166 FLR 144; 40 ACSR 221
Texts Cited: - M Leeming, “Farah and its Progeny: Comity among Intermediate Appellate Courts” (2015) 12 TJR 165
Category: Principal judgment
Parties: Wollongong Coal Limited (Plaintiff)
Bellpac Pty Limited (receivers and managers appointed) (in liquidation) (Defendant)
Representation:
Counsel:
D L Williams SC (Plaintiff)
N Cotman SC/J Wells (Defendant)
Solicitors:
Thomson Geer (Plaintiff)
Breen & Breen (Defendant)

File Number(s): 2017/35288

Judgment

These proceedings are brought by Wollongong Coal Limited (“WCL”), by leave granted under s 471B of the Corporations Act 2001 (Cth), in relation to certain property of the Defendant, Bellpac Pty Ltd (recs and mgrs apptd) (in liq) (“Bellpac”), namely 2,472,063,680 shares in WCL (“Bellpac shares”).
By its Originating Process filed on 3 February 2017, WCL initially sought an order under s 259A(c) of the Corporations Act that it “may purchase” the Bellpac shares from Bellpac. After notice of this application…

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 In the matter of Wollongong Coal Limited

Details

AGLC: In the matter of Wollongong Coal Limited [2017] NSWSC 201
Case: [2017] NSWSC 201
Decision Date: 07 March 2017

CaseChat Overview and Summary

Wollongong Coal Limited sought a declaration that it could purchase shares in itself, without shareholder approval, to implement a settlement of other proceedings. The application was brought under section 259A of the Corporations Act 2001, which provides that a company may apply to the court for an order allowing it to acquire its own shares if the court is satisfied that the order is not contrary to the interests of shareholders or creditors generally. The company sought an order that it could purchase a substantial block of shares from a single shareholder, without the need for shareholder approval, to implement a settlement of other proceedings. The shareholder opposed the application.

The court considered whether section 259A(c) conferred a power on the Court to make such an order. The court also considered whether such an order ought to be made. The court found that section 259A(c) did confer a power on the Court to make such an order. The court found that the order ought to be made, as the application met the criteria set out in the statute and the order would not be contrary to the interests of shareholders or creditors generally.

The court made the order that Wollongong Coal Limited could purchase the shares in itself, without shareholder approval, to implement the settlement of other proceedings. The court found that the order would not be contrary to the interests of shareholders or creditors generally and that the application met the criteria set out in the statute. The court also found that the order was in the best interests of the company and its shareholders.

Orders