Perilya Limited, in the matter of Perilya Limited (No 2)

[2013] FCA 1381

FEDERAL COURT OF AUSTRALIA

Perilya Limited, in the matter of Perilya Limited (No 2) [2013] FCA 1381

Citation:	Perilya Limited, in the matter of Perilya Limited (No 2) [2013] FCA 1381
Parties:	PERILYA LIMITED (ACN 009 193 695)
File number(s):	WAD 396 of 2013
Judge(s):	SIOPIS J
Date of judgment:	9 December 2013
Date of hearing:	9 December 2013
Place:	Perth
Division:	GENERAL DIVISION
Category:	No Catchwords
Number of paragraphs:	12
Counsel for the Plaintiff:	Mr I Armeli
Solicitor for the Plaintiff:	Allion Legal

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION	WAD 396 of 2013

IN THE MATTER OF PERILYA LIMITED (ACN 009 193 695)

PERILYA LIMITED (ACN 009 193 695) Plaintiff
JUDGE:	SIOPIS J
DATE OF ORDER:	9 DECEMBER 2013
WHERE MADE:	PERTH

THE COURT ORDERS THAT:

1.Pursuant to section 411(4)(b) of the Corporations Act 2001 (Cth) (Act), the scheme of arrangement between the Plaintiff and its shareholders, a copy of which is set out in annexure “MJ7” of the affidavit of Mr Michael Wylie Jools, dated 31 October 2013, is approved.

2.Pursuant to section 411(12) of the Act, the Plaintiff be exempted from compliance with section 411(11) of the Act in relation to the Scheme.

3.An office copy of this Order be lodged with the Australian Securities & Investments Commission on 9 December 2013.

Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION	WAD 396 of 2013

IN THE MATTER OF PERILYA LIMITED (ACN 009 193 695)

PERILYA LIMITED (ACN 009 193 695) Plaintiff
JUDGE:	SIOPIS J
DATE:	9 DECEMBER 2013
PLACE:	PERTH

REASONS FOR JUDGMENT

1. This is the second hearing of an application by the plaintiff for an approval of a scheme of arrangement between the plaintiff and its members.

2. Under the scheme, the whole of the shareholding in the plaintiff is to be acquired by an existing shareholder of the company, Zhongjin Lingnan Mining (HK) Company Limited (Zhongjin).

3. On 28 October 2013, I made orders for the convening of a meeting of the members of the plaintiff to consider and, if thought fit, approve the entry into a scheme of arrangement between the plaintiff and its members.

4. The principles to which a Court must have regard on the second hearing are well‑known.  Essentially they are that the Court must be satisfied that the provisions of the Corporations Act 2001 (Cth) (the Act) have been complied with and that the scheme has been proposed in good faith and not in pursuance of some illegitimate purpose, and that the scheme is fair and reasonable.

5. The plaintiff has relied upon evidence deposing to the fact that the meeting was duly held in accordance with the orders of the Court made on 28 October 2013.  There is also evidence that the members voted at the meeting in sufficient numbers in favour of entry into the scheme to satisfy the requirements for the majorities which are set out in s 411(4)(a)(ii) of the Act.  Of the members who voted, 82.67% voted in favour of entry into the scheme and 17.3% against.  In respect of the number of votes cast, 96.86% were cast in favour and 3.14% were cast against.  The main shareholder, Zhongjin, who is acquiring the shares, did not vote.

6. Next, I need to consider s 411(17) of the Act.  There is attached to the affidavit of Mr Michael Wylie Jools, a letter from the Australian Securities and Investments Commission dated 6 December 2013, in the usual terms, stating that it had no objection to the proposed scheme between the plaintiff and its shareholders.  That satisfies the requirement of that subsection.  Further, there is nothing before the Court which would suggest there is any reason why the Court would exercise its discretion under that subsection against the approval of the scheme.

7. As to the question of whether the scheme is fair and reasonable, the Court approaches this question on the basis that, generally speaking, the members are the best arbiters of their own commercial interest.  Accordingly, the Court will not lightly interfere with the way in which the members see their own commercial interest.  The manner in which the plaintiff’s members perceive their commercial interest is reflected in the substantial majorities by which they voted in favour of the scheme.  Further, there is also the fact that the scheme was the subject of expert consideration and the expert opined that the scheme was fair and reasonable.

8. There is also, of course, the fact that there have been notices in The Australian and The West Australian newspapers advising of the Court hearing today.  No one has appeared today in opposition to the scheme to contend that the scheme is not fair and reasonable, nor that it is oppressive or promoted in bad faith.  In my view, therefore, those considerations have been met.

9. The plaintiff has also provided a helpful guide to the affidavit evidence which demonstrates that there has been compliance with the other provisions of the Act.

10. Accordingly, the orders will be made approving the scheme in accordance with the minute of proposed orders as amended.

11. There is also an application for an exemption from having to comply with s 411(11) of the Act which requires a copy of each order made by the Court for the purposes of s 411(4) to be annexed to every copy of the plaintiff’s constitution.  The Court has the power to make an order for exemption from compliance with that order under s 411(12) of the Act.

12. I will make the order exempting compliance with that provision because on the operation of the scheme, the company will become a wholly-owned subsidiary of Zhongjin.

I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis.

Associate:

Dated:        17 December 2013