Re Amcor Ltd - [2000] VSC 157

SUPREME COURT OF VICTORIA
COMMERCIAL & EQUITY DIVISION	Not Restricted

No. CEQ 4400 of 2000

IN THE MATTER of s.411 of the Corporations Law

and

IN THE MATTER of AMCOR LIMITED
(ACN 000 017 372)

and

IN THE MATTER of a Proposed Scheme of Arrangement between Amcor Limited and its Members

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JUDGE:	Warren J
WHERE HELD:	Melbourne
DATE OF HEARING:	25 February and 11 April 2000
DATE OF JUDGMENT:	11 April 2000 (reasons delivered 28 April 2000)
CASE MAY BE CITED AS:	IMO Amcor Limited
MEDIUM NEUTRAL CITATION:	[2000] VSC 157

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Corporations Law, ss.411, 412 – court order to convene a meeting of shareholders – consideration and approval of a scheme of arrangement – Corporation Rules, Orders 1.3, 2.3, 3.4, 2.15 and 16.6 – dispensation from compliance in part from the Rules – certification by a Master - Corporations Regulations, reg. 5.6 and 9.

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APPEARANCES:	Counsel	Solicitors
For the Applicant	Mr J.G. Santamaria QC with Mr S.G.E. McLeish	Arthur Robinson & Hedderwicks

HER HONOUR:

Amcor Ltd ("Amcor") applied for an order on 25 February 2000 that the Court convene meetings of its shareholders to consider a Scheme of Arrangement between itself and its members. On 11 April 2000 Amcor sought an order approving the Scheme of Arrangement.

The application on 25 February 2000
Background

Amcor conducts both a packaging and a paper business. The paper business is conducted largely through Amcor's wholly owned subsidiary PaperlinX Ltd ("PaperlinX"). Amcor is proposing a demerger whereby it will become purely a packaging business. To that end, the board of Amcor has resolved to put before shareholders an arrangement which has become known as the Demerger Proposal. Pursuant to the Demerger Proposal, Amcor proposes to cancel share capital in an amount of $1.22 per share by way of capital reduction and then to appropriate that $1.22 by using it as the consideration for the transfer to each Amcor shareholder of one share in PaperlinX for each three shares in Amcor. Thereafter, PaperlinX will cease to be a wholly owned subsidiary of Amcor. However, after the distribution amongst Amcor shareholders of those shares in PaperlinX, Amcor will continue to hold approximately 18% of the capital of PaperlinX. Accordingly, Amcor is proposing to sell those shares to the public by what is described as the Public Offer. A prospectus has been prepared pursuant to the provisions of the Corporations Law. There are two parts of the public offer. First, that a "retail offer" whereby shares in PaperlinX are made available to sharebrokers for their retail clients and an institutional offer (also called a "bookbuild") whereby the shares are offered to large institutions such as superannuation funds. Second, if the scheme proceeds, it is proposed that existing members of Amcor can increase their shareholdings in PaperlinX over and above their entitlements under the scheme by participating in the retail offer.

The requirements of the Corporations Law

The application is made pursuant to s.411 of the Corporations Law ("the Law"). The…

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 Amcor Ltd

Details

AGLC: Re Amcor Ltd [2000] VSC 157
Case: [2000] VSC 157
Decision Date: 11 April 2000

CaseChat Overview and Summary

The case involved Amcor Limited, where the issue was whether the court had the authority to order a meeting of shareholders for the consideration and approval of a scheme of arrangement under the Corporations Law. The Federal Court of Australia was tasked with deciding on the matter. The primary legal issue was whether the court could dispense with certain procedural requirements set out in the Corporations Rules, as well as whether a Master's certification was necessary for the court's order to be effective.

The court found that while the Corporations Rules provided a framework for the procedure to be followed in convening shareholder meetings, the statutory provisions under the Corporations Law allowed for flexibility in these matters. The court held that it had the discretion to dispense with compliance with certain rules, provided that the shareholders' rights were not prejudiced. The court also found that a Master's certification was not necessary for the court's order to be effective, as it was sufficient for the order to be made in accordance with the Corporations Regulations. Consequently, the court made an order convening a meeting of shareholders to consider and approve the scheme of arrangement, with dispensation from compliance with certain Corporations Rules.

The court's decision was based on the interpretation of the relevant statutory provisions and the Corporations Rules, as well as the principles of fairness and flexibility in the administration of justice. The court emphasised that the primary objective was to ensure that the shareholders' rights were protected and that the scheme of arrangement was approved in a fair and transparent manner. The court also noted that the Corporations Regulations provided a mechanism for the court to exercise its discretion in making orders in relation to shareholder meetings. As a result, the order convening the meeting of shareholders was made with the necessary dispensation from compliance with certain Corporations Rules, and without the need for a Master's certification. This decision provides guidance to companies and their shareholders in relation to the convening of meetings for the consideration and approval of schemes of arrangement, and the role of the court in ensuring that the process is conducted fairly and efficiently.

Orders