Amcor Limited, in the matter of Amcor Limited (No 2) [2019] FCA 842
File number(s):
VID 1427 of 2018
Judge(s):
BEACH J
Date of judgment:
4 June 2019
Catchwords:
CORPORATIONS – members’ scheme of arrangement – second court hearing – conditions precedent to scheme –approval of scheme under s 411(4)(b) of Corporations Act 2001 (Cth) – Securities Act of 1933 (US) exemption – approval granted
Legislation:
Corporations Act 2001 (Cth) Pt 5.1, ss 411(4)(a) and (b),(6),(10),(11),(12),(17), Ch 6
Securities Act of 1933 (US) s 3(a)(10)
Cases cited:
Amcor Limited, in the matter of Amcor Limited[2019] FCA 346
Atlantic Gold NL, in the matter of Atlantic Gold NL (No 2)[2014] FCA 869
A.There has been produced to the Court a statement in writing by the Australian Securities and Investments Commission (ASIC) in accordance with s 411(17)(b) of the Corporations Act 2001 (Cth) stating that ASIC has no objection to the Scheme of Arrangement referred to in this Order.
B.The New Amcor Shares and CDIs to be issued pursuant to the Scheme of Arrangement (and as defined in the Scheme of Arrangement) will not be registered under the Securities Act of 1933 (US) or the securities laws of any other state jurisdiction in the United States. In connection with the implementation of the Scheme of Arrangement and the issue of New Amcor Shares and CDIs, the Plaintiff and Amcor plc intend to rely on this Court’s approval of the Scheme of Arrangement and on s 3(a)(10) of the Securities Act of 1933 (US).
THE COURT ORDERS THAT:
1.Pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth) (the Act), the Scheme of Arrangement between the Plaintiff and its members agreed to by the said members at the meeting held on 2 May 2019 (the terms of which are as set out in Annexure A to these orders) be and is hereby approved.
2.Pursuant to s 411(12) of the Act, the Plaintiff be exempted from compliance with s…
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
AGLC
Re Amcor Ltd (No 2) [2019] FCA 842
Case
[2019] FCA 842
Decision Date
CaseChat Overview and Summary
In the case of Re Amcor Ltd (No 2), the matter was heard by the Federal Court of Australia in a second hearing concerning a members' scheme of arrangement. The dispute involved the approval of a scheme of arrangement under section 411(4)(b) of the Corporations Act 2001 (Cth) and an exemption under section 411(12) of the same Act, specifically regarding compliance with section 411(11). The scheme in question pertained to the reorganisation of Amcor Ltd and its subsidiaries, with a focus on the conditions precedent to the scheme and the reliance on an exemption under the Securities Act of 1933 (US). The central issues before the court were whether the scheme was fair and reasonable to the shareholders and whether the company should be exempted from the requirement to annex a copy of the court’s approval order to every copy of the company’s constitution.
The court assessed the fairness and reasonableness of the scheme based on several factors, including the overwhelming support of the scheme shareholders, the independent expert’s opinion that the scheme was in the best interests of the shareholders, the absence of any opposition to the scheme, and the comprehensive disclosure in the scheme booklet. Additionally, the court considered the reliance on the Securities Act of 1933 exemption, which was necessary for the scheme to proceed. The court was also tasked with determining whether to exempt Amcor from the requirement to annex the court’s order approving the scheme to its constitution, as stipulated under section 411(11) of the Corporations Act. The court concluded that such an exemption was appropriate given that the scheme would not alter the company’s constitution or the rights of its shareholders, creditors, or other persons dealing with it. The court found that the scheme would be adequately disclosed to current shareholders, and there would be no ongoing purpose served by annexing the orders to the company’s constitution after the scheme's implementation.
The court exercised its discretion to approve the scheme, considering the overwhelming support from the shareholders, the independent expert’s opinion, and the absence of opposition. The court also granted the exemption from compliance with section 411(11) of the Corporations Act, finding that the scheme would not affect the company’s constitution or the rights of its shareholders, creditors, or other persons dealing with it. Consequently, the court issued orders approving the scheme and exempting Amcor from the requirement to annex the court’s approval order to its constitution. The orders were made pursuant to sections 411(4)(b) and 411(12) of the Corporations Act, and the scheme terms are detailed in Annexure A to the orders.
Orders
Orders of the court
1. Pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth) (the Act), the Scheme of Arrangement between the Plaintiff and its members agreed to by the said members at the meeting held on 2 May 2019 (the terms of which are as set out in Annexure A to these orders) be and is hereby approved.
2. Pursuant to s 411(12) of the Act, the Plaintiff be exempted from compliance with s 411(11) of the Act.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
ANNEXURE A
Scheme of Arrangement
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[The order entered is available on the Commonwealth Courts Portal, which attaches the Scheme]
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
In this respect:(a)I was advised before the commencement of the approval hearing that reliance would be placed on the s 3(a)(10) exemption of the Securities Act of 1933 on the basis of my approval of the Scheme;(b)I have been informed of the securities to be offered as scheme consideration, and an independent expert report concluded that the proposal is in the best interests of shareholders; and(c)I have held a hearing to consider the fairness and reasonableness of the proposed Scheme, which hearing was open to the public, and any person to whom New Amcor CDI’s or New Amcor Shares were to be issued. Further, notice of the date of the approval hearing was included in the Scheme Booklet sent to all shareholders of Amcor prior to the proposal being considered by the Scheme meeting, and was advertised in a daily newspaper circulating throughout the country. No shareholder gave notice of any intention to appear at the second court hearing to oppose the approval of the Scheme.(f) Conclusion In summary, I propose to exercise my discretion to approve the Scheme given, inter-alia:(a)the overwhelming support of the Scheme shareholders as reflected in the voting results of the Scheme meeting;(b)the opinion of the independent expert that the Scheme is fair and reasonable and in the best interests of Scheme shareholders;(c)the absence of opposition to the Scheme by any Scheme shareholder; and(d)the comprehensive disclosure in the Scheme Booklet of the potential benefits and disadvantages of the Scheme. I also propose to grant an exemption from the requirements of s 411(11). Section 411(11) requires, subject to s 411(12), that a copy of the Court’s order approving the Scheme be annexed to every copy of Amcor’s constitution issued after the order is made. But s 411(12) allows me to exempt Amcor from compliance with this provision. In Re Equinox Resources Ltd (2004) 49 ACSR 692, EM Heenan J at [22] indicated that the purpose of s 411(11) was:...to ensure that any modification of the rights of shareholders of the company which is the subject of the scheme or any other provision in the scheme which may affect the interests of persons dealing with the company, such as prospective creditors or purchasers of shares, will be sure to have the opportunity of seeing what the exact rights of shareholders in the company or of its creditors are, as modified, if at all, by the scheme which has been approved. In my view, exemption from compliance with s 411(11) is appropriate given that the Scheme will not alter the constitution of Amcor or the rights of shareholders, creditors or other persons dealing with it. Current shareholders are fully informed of the Scheme and will be informed of my approval of the Scheme. Further, no ongoing purpose would be served by requiring the orders approving the Scheme to be annexed to Amcor’s constitution. The orders will be irrelevant once the Scheme is implemented and Amcor becomes a wholly owned subsidiary of New Amcor. In summary, I will grant the orders sought by Amcor.