Lamsoon & Ors, Re Hancock & Ors- Action Food Barns & Ors, Re Hancock

The applicants, Lamsoon and others, sought to restrain the respondents, Hancock and others, from proceeding with a proposed scheme of arrangement under section 411 of the Corporations Act 2001 (Cth). The dispute concerned the validity and fairness of the proposed scheme, which involved the acquisition of shares in Action Food Barns Limited. The application was heard by Kirby J in chambers.

The primary legal issue before the Court was whether the proposed scheme of arrangement was fair and reasonable, and whether it ought to be approved under section 411(2) of the Corporations Act. This required the Court to consider whether the scheme was in the best interests of the shareholders and creditors, and whether there had been any material non-disclosure or misleading conduct in the information provided to them.

Kirby J considered the evidence presented by both parties, including expert reports and submissions regarding the valuation of the shares and the terms of the scheme. His Honour applied the principles established in cases concerning schemes of arrangement, which require the Court to act as a supervisor to ensure that the scheme is fair, just, and equitable. The Court must be satisfied that the scheme is not oppressive or unfair to any class of shareholders or creditors.

Ultimately, Kirby J found that the proposed scheme of arrangement was fair and reasonable and ought to be approved. His Honour made orders for the convening of meetings of shareholders and creditors to consider the scheme.