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Re Afterpay Ltd

Re Afterpay Ltd

Case [2021] NSWSC 1435 8 November 2021

Schemes of Arrangement

Corporations Act 2001 (Cth)

Corporate Law & Governance

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Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Afterpay Limited [2021] NSWSC 1435
Hearing dates: 4 November 2021
Date of orders: 4 November 2021
Decision date: 08 November 2021
Jurisdiction: Equity - Corporations List
Before: Black J
Decision:
Order made convening scheme meeting and approving the scheme booklet for distribution to shareholders.

Catchwords:
CORPORATIONS – Arrangements and reconstructions – Schemes of arrangement or compromise – Application under s 411 of the Corporations Act 2001 (Cth) for orders convening meeting of members to consider and, if thought fit, to agree to proposed scheme of arrangement – Whether requirements to order scheme meeting are satisfied.

Legislation Cited:
- Corporations Act 2001 (Cth), s 411

Cases Cited:
-Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485; (1993) 112 ALR 627; (1993) 10 ACSR 230; [1993] HCA 15
-F T Eastment & Sons Pty Ltd v Metal Roof Decking Supplies Pty Ltd (1977) 3 ACLR 69
- Re Abacus Funds Management Ltd (2006) 24 ACLC 211; [2005] NSWSC 1309
- Re ABB Grain Ltd [2010] FCA 1309
- Re AIRR Holdings Ltd [2019] FCA 2180
-Re APN News & Media Ltd (2007) 62 ACSR 400; [2007] FCA 770
- Re Ardent Leisure Ltd [2018] NSWSC 1665
-Re Arthur Yates & Co Ltd (2001) 36 ACSR 758; [2001] NSWSC 40
- Re Associated Advisory Practices Limited [2013] FCA 761
- Re Atlas Iron Ltd (2016) 112 ACSR 554; [2016] FCA 366
- Re Australian Leisure and Entertainment Property Management Ltd [2021] NSWSC 1421
- Re Aveo Group Limited and Aveo Funds Management Limited [2019] NSWSC 1348
- Re Bigair Group Ltd [2016] FCA 1296
- Re BINGO Industries Ltd [2021] NSWSC 798
- Re BIS Finance Pty Ltd [2017] NSWSC 1713
- Re Bolnisi Gold NL (No 2) (2007) 65 ACSR 510; [2007] FCA 2078
- Re Centrebet International Ltd [2011] FCA 870
- Re Citadel Group Ltd (2020) 148 ACSR 598; [2020] FCA 1580
- Re Coca-Cola Amatil Ltd [2021] NSWSC 270
- Re CSR Ltd (2010) 183 FCR 358; (2010) 265 ALR 703; (2010) 77 ACSR 592; [2010] FCAFC 34
- Re DUET Finance Ltd [2017] NSWSC 415
- Re DUET Management Company 1 Ltd [2013] NSWSC 817
- Re Ellerston Global Investments Ltd [2020] NSWSC 879
- Re Foster’s Group Ltd (No 2) [2011] VSC 547
- Re Foundation Healthcare Ltd (2002) 42 ACSR 252; [2002] FCA 742
- Re Gazal Corporation Ltd [2019] FCA 701
- Re GBST Holdings Ltd [2019] NSWSC 1280
- Re Hills Motorway Ltd [2002] 43 ACSR 101; [2002] NSWSC 897
- Re Intega Limited [2021] NSWSC 1434
- Re Isentia Group Ltd [2021] NSWSC 910
- Re Kidman Resources Ltd (2019) 375 ALR 760; (2019) 139 ACSR 122; [2019] FCA 1226
- Re Macquarie Private Capital A Ltd [2008] NSWSC 323
- Re Mainstream Group Holdings Ltd [2021] FCA 948

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 Re Afterpay Ltd

Details

AGLC: Re Afterpay Ltd [2021] NSWSC 1435
Case: [2021] NSWSC 1435
Decision Date: 08 November 2021

CaseChat Overview and Summary

In the matter of Afterpay Ltd, the Court was asked to consider an application by the company to convene a meeting of its members to consider and potentially approve a proposed scheme of arrangement. The application was made under section 411 of the Corporations Act 2001 (Cth). The central issue before the Court was whether the necessary conditions were fulfilled to order a meeting of members to deliberate on and potentially approve the proposed scheme of arrangement. Specifically, the Court needed to determine whether the company had met the statutory requirements set forth in the Act to convene such a meeting.

The Court thoroughly examined the statutory provisions and the circumstances of the case to assess whether the company had satisfied the criteria for convening a meeting under section 411. It was necessary to confirm that the company had complied with all procedural prerequisites, including the proper preparation and distribution of relevant documents to the members. The Court also considered whether the proposed scheme was fair and reasonable to the members, as required by the law. After careful deliberation, the Court concluded that the company had met all the necessary conditions to convene the meeting.

Having found that the statutory requirements were satisfied, the Court ordered that a meeting of the members of Afterpay Ltd be convened. The members were to consider and, if thought fit, approve the proposed scheme of arrangement. This decision allowed the company to proceed with its planned restructuring, subject to the approval of its members. The Court's ruling was based on a detailed examination of the legal framework and the specific facts of the case, ensuring that all procedural and substantive requirements were met.

Orders