Jones & Anor v Treasury Wine Estates Limited

Jones and another (the applicants) brought proceedings against Treasury Wine Estates Limited (the respondent) in the Federal Court of Australia. The applicants sought to restrain the respondent from proceeding with a proposed scheme of arrangement under Part 5.1 of the *Corporations Act 2001* (Cth). The scheme involved the separation of the respondent's Penfolds wine business from its other assets and the subsequent sale of the Penfolds business to a new entity, with shares in that new entity to be distributed to the respondent's shareholders. The applicants, who were shareholders in the respondent, alleged that the scheme was oppressive and unfairly prejudicial to their interests as shareholders, and that the respondent had failed to provide them with adequate information to make an informed decision about the scheme.

The primary legal issue before the High Court of Australia was whether the Federal Court had erred in refusing to grant an interlocutory injunction to restrain the respondent from proceeding with the scheme of arrangement. This involved determining whether the applicants had established a strong prima facie case that the scheme was oppressive under section 461 of the *Corporations Act 2001* (Cth) or that the respondent had breached its continuous disclosure obligations under Chapter 7 of the *Australian Securities and Investments Commission Act 2001* (Cth). A further issue concerned the proper approach to assessing the balance of convenience in the context of an interlocutory injunction sought to prevent a scheme of arrangement from proceeding.

The High Court held that the Federal Court had not erred in its assessment of the applicants' prospects of success on the merits. Their Honours Gageler and Gordon JJ found that the applicants had not demonstrated a strong prima facie case of oppression, noting that schemes of arrangement, by their nature, involve a collective decision by shareholders and that the statutory framework provides for shareholder approval. Furthermore, the Court found no arguable case of a breach of continuous disclosure obligations, as the information provided to shareholders was sufficient for the purposes of the scheme. The balance of convenience also favoured refusing the injunction, given the significant disruption and prejudice that would be caused to the respondent and its shareholders by delaying the scheme.

The High Court dismissed the applicants' appeal and affirmed the orders of the Federal Court.