Re Alita Resources Ltd - [2020] WASC 430

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   RE ALITA RESOURCES LTD; EX PARTE RICHARD SCOTT TUCKER as joint and several administrator of ALITA RESOURCES LTD (SUBJECT TO DEED OF COMPANY ARRANGEMENT) [2020] WASC 430
CORAM:   MASTER SANDERSON
HEARD:   24 NOVEMBER 2020
DELIVERED          :   27 NOVEMBER 2020
PUBLISHED           :   27 NOVEMBER 2020
FILE NO/S:   COR 251 of 2019
MATTER:   Alita Resources Ltd (Subject to Deed of Company Arrangement) (ACN 147 393 735) and the Other Companies listed in the Schedule

EX PARTE
RICHARD SCOTT TUCKER as joint and several administrator of ALITA RESOURCES LTD (SUBJECT TO DEED OF COMPANY ARRANGEMENT)
JOHN ALLAN BUMBAK as joint and several administrator of ALITA RESOURCES LTD (SUBJECT TO DEED OF COMPANY ARRANGEMENT)
First Plaintiffs
RICHARD SCOTT TUCKER as joint and several administrator of TAWANA RESOURCES PTY LTD (SUBJECT TO DEED OF COMPANY ARRANGEMENT)
JOHN ALLAN BUMBAK as joint and several administrator of TAWANA RESOURCES PTY LTD (SUBJECT TO DEED OF COMPANY ARRANGEMENT)
Second Plaintiffs
RICHARD SCOTT TUCKER as joint and several administrator of LITHCO NO 2 PTY LTD (SUBJECT TO DEED OF COMPANY ARRANGEMENT)
JOHN ALLAN BUMBAK as joint and several administrator of LITHCO NO 2 PTY LTD (SUBJECT TO DEED OF COMPANY ARRANGEMENT)
Third Plaintiffs

Catchwords:

Corporations law - Application to vary terms of Deed of Company Arrangement - Turns on own facts

Legislation:

Corporations Act 2001 (Cth)

Result:

Deed varied

Category: B

Representation:

Counsel:

First Plaintiffs	:	P Edgar
Second Plaintiffs	:	P Edgar
Third Plaintiffs	:	P Edgar
Non-party	:	K de Kerloy
Interested Party	:	J Abberton

Solicitors:

First Plaintiffs	:	King & Wood Mallesons
Second Plaintiffs	:	King & Wood Mallesons
Third Plaintiffs	:	King & Wood Mallesons
Non-party	:	Herbert Smith Freehills
Interested Party	:	Lavan

Case(s) referred to in decision(s):

Re Derwent Howard Media Pty Ltd [2011] NSWSC 1164
Re Paradox Digital Pty Ltd; Ex Parte Smith [2001] WASC 182

MASTER SANDERSON:

This matter was commenced by originating process filed 18 December 2019. On 6 March 2020, I made the following orders:
1.Pursuant to section 444GA(1)(b) of the Corporations Act the Plaintiffs jointly and severally have leave to transfer 100% of the fully paid ordinary shares in the capital of Alita (Shares) from the 'members' (as defined by the Corporations Act) of Alita (Members), to the Proponent and/or its nominee(s) on the Completion Date as defined in the deed of company arrangement (DOCA) and in accordance with its terms.
2.Pursuant to section 447A(1) of the Corporations Act and clause 90-15(1) of the Insolvency Practice Schedule, any of the Plaintiffs may jointly or severally:
(a)execute on behalf of the Members share transfer forms and any other documents ancillary or incidental to effecting the transfer referred to in Order 1; and
(b)enter or procure the entry of the name of the Proponent and/or its nominee(s) in the Share register for Alita in respect of all Shares transferred to the Proponent and/or its nominee(s) in accordance with Order 1.
3.Any persons who are entitled to oppose this…

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: [2020] WASC 430
Decision Date: 27 NOVEMBER 2020

CaseChat Overview and Summary

The matter before the Court involved an application by Alita Resources Limited to vary the terms of a deed of company arrangement. The applicant, Alita Resources Limited, sought to alter the arrangements it had made with its creditors. The dispute centred on the legal validity and appropriateness of modifying these terms. The court's role was to assess whether the proposed changes were just and equitable, and whether they adhered to the statutory requirements under the Corporations Act.

The key legal issues addressed by the court included whether the proposed variations were procedurally correct and whether they were substantively fair and reasonable. The applicant needed to demonstrate that the variations would benefit the company and its creditors, and that the changes did not unfairly prejudice any stakeholder. The court was required to consider the specific circumstances of the case, including the financial position of Alita Resources Limited and the impact of the proposed changes on all affected parties.

In its reasoning, the court emphasised the importance of the statutory framework governing deeds of company arrangement. The court acknowledged that variations to such deeds are permissible but must be justified by significant changes in circumstances or compelling reasons. The court found that the applicant had presented sufficient evidence to show that the variations were necessary and would ultimately serve the best interests of all parties involved. The court also considered the views of the relevant stakeholders and was satisfied that the proposed changes were both procedurally and substantively justified.

The court ordered that the deed of company arrangement be varied as sought by Alita Resources Limited. This decision recognised the need for flexibility in corporate restructuring and affirmed the court's authority to modify deeds of company arrangement when warranted by the circumstances.

Orders

Orders of the court

Deed varied

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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