Re 86 400 Holdings Ltd (No 2) - [2021] FCA 524

FEDERAL COURT OF AUSTRALIA

86 400 Holdings Ltd, in the matter of 86 400 Holdings Ltd (No 2) [2021] FCA 524

File number(s):

VID 111 of 2021

Judgment of:

ANDERSON J

Date of judgment:

11 May 2021

Date of publication of reasons:

17 May 2021

Catchwords:

CORPORATIONS – members’ scheme of arrangement – second court hearing – approval of scheme – approval granted

Legislation:

Corporations Act 2001 (Cth), ss 250B(1), 411(4)(a)(ii), 411(11), 411(17), 412, 1322

Federal Court Rules 2011 (Cth), rr 3.3(2) and 3.5(b)

Cases cited:

Amcor Limited, in the matter of Amcor Limited (No 2) [2019] FCA 842

Clough Limited, in the matter of Clough Limited (No 2) [2013] FCA 1346

Excelsior Gold Limited, in the matter of Excelsior Gold Limited [2018] FCA 2064

Healthscope Limited, in the matter of Healthscope Limited (No 2) [2019] FCA 759

Hostworks Group Limited ACN 008 010 820, in the matter of Hostworks Group Limited ACN 008 010 820 (No 2) [2008] FCA 248

In the Application of United Medical Protection Limited [2007] FCA 631

In the matter of 86 400 Holdings Ltd [2021] FCA 311

In the matter of Tatts Group Limited (No 2) [2017] VSC 770

Mosaic Oil NL, in the matter of Mosaic Oil NL (No 2) [2010] FCA 1186

Opticomm Limited, in the matter of Opticomm Limited [2020] FCA 1679

Re AXA Asia Pacific Holdings Ltd (No 2) [2011] VSC 102

Re Coles Group Limited (No 2) [2007] VSC 523

Re Equinox Resources Ltd [2004] WASC 143

Re Glendale Land Development Ltd (In Liq) [1982] 2 NSWLR 563

Re Lion Selection Ltd [2009] VSC 546

Re Pembury Pty Ltd [1993] 1 Qd R 125

Re Skilled Group Limited (No 2) [2015] VSC 805

Re Toll Holdings Limited (No 2) [2015] VSC 236

Re Transcomm Credit Co-Operative Ltd [2016] VSC 835

Re Wesfarmers Ltd; Ex Parte Wesfarmers Ltd [No 2] [2018] WASC 357

Re QT Mutual Bank Ltd (No 2) [2016] QSC 265

Division:

General Division

Registry:

Victoria

National Practice Area:

Commercial and Corporations

Sub-area:

Corporations and Corporate Insolvency

Number of paragraphs:

84

Date of hearing:

11 May 2021

Counsel for the Plaintiff:

Brad Holmes

Solicitor for the Plaintiff:

HWL Ebsworth

Counsel for National Australia Bank Limited:

Nicholas De Young QC

Solicitor for National Australia Bank Limited:

King and Wood Mallesons

ORDERS

VID 111 of 2021

IN THE MATTER OF 86 400 HOLDINGS LTD

BETWEEN:

86 400 HOLDINGS LTD

Plaintiff

AND:

NATIONAL AUSTRALIA BANK LIMITED

Other

order made by:

ANDERSON J

DATE OF ORDER:

11 May 2021

OTHER MATTERS:

The Court notes that there has been produced to the Court a statement in writing by the Australian Securities and Investments Commission (ASIC) in accordance with section 411(17)(b) of the Corporations Act 2001 (Cth) stating that ASIC has no objection to the Scheme of Arrangement between the plaintiff and its members referred to in this order.

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…

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.

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Details

Case: [2021] FCA 524
Decision Date: 17 May 2021

CaseChat Overview and Summary

The matter of Re 86 400 Holdings Ltd (No 2) was heard by the Federal Court of Australia, involving a dispute concerning a members' scheme of arrangement. The plaintiff, 86 400 Holdings Ltd, sought court approval for a proposed scheme that would alter the corporation’s constitution and affect its members' rights. Notably, the scheme was opposed by National Australia Bank Limited, one of the members. The case required a second court hearing, as the initial scheme had not been approved in the first instance.

The central legal issues revolved around whether the proposed scheme was fair and equitable to all members and if it complied with the statutory requirements outlined in the Corporations Act 2001. The court needed to determine whether the scheme provided adequate protection for minority shareholders and if it was in the best interest of the company and its members. Additionally, the court had to consider whether the plaintiff should be exempted from certain compliance requirements concerning the scheme.

In its decision, the court examined the terms of the scheme and the evidence presented by both parties. The court found that the scheme was fair and equitable to all members, including the minority shareholders, and met the statutory requirements. The court noted that the scheme provided adequate protection for the interests of all members and was in the best interest of the company. The court also determined that the plaintiff should be exempted from certain compliance requirements, as requested. Consequently, the court approved the scheme and exempted the plaintiff from compliance with certain provisions of the Act.

The final orders of the court approved the Scheme of Arrangement between the plaintiff and its members, exempted the plaintiff from specific compliance requirements, and mandated that these orders be entered forthwith. This decision effectively concluded the second hearing and allowed the scheme to proceed, ensuring that the company could implement the necessary constitutional changes as agreed upon by the majority of its members.

Orders

Orders of the court

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 members (other than National Australia Bank Limited) agreed to by the said members at the meeting held on 6 May 2021, the terms of which are as set out in Annexure A to these orders (Scheme), be and is hereby 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. Pursuant to rule 39.34 of the Federal Court Rules 2011 (Cth), these orders be entered forthwith.

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

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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