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Re Andean Resources Ltd

Re Andean Resources Ltd

Case [2010] FCA 1190 29 October 2010

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FEDERAL COURT OF AUSTRALIA
Andean Resources Limited, in the matter of Andean Resources Limited [2010] FCA 1190

Citation: Andean Resources Limited, in the matter of Andean Resources Limited [2010] FCA 1190

Parties: ANDEAN RESOURCES LIMITED (ACN 064 494 319)

File number(s): NSD 1359 of 2010

Judge: JAGOT J

Date of judgment: 29 October 2010

Catchwords: CORPORATIONS – scheme of arrangement – first Court hearing

Legislation: Corporations Act 2001 (Cth)
Corporations Regulations 2001 (Cth)

Cases cited: Re Arthur Yates & Co Ltd (2001) 36 ACSR 758; [2001] NSWSC 40
Re Hills Motorway Ltd (2002) 43 ACSR 101; [2002] NSWSC 897
Re Hostworks Group Ltd (2008) 26 ACLC 137; [2008] FCA 64

Date of hearing: 29 October 2010

Place: Sydney

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 26

Counsel for the Plaintiff: Mr T Bathurst QC

Solicitor for the Plaintiff: Corrs Chambers Westgarth Lawyers

Counsel for Goldcorp Inc: Mr N Hutley SC

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 1359 of 2010

IN THE MATTER OF ANDEAN RESOURCES LIMITED (ACN 064 494 319)

BETWEEN:
ANDEAN RESOURCES LIMITED (ACN 064 494 319)
Plaintiff

JUDGE:

JAGOT J

DATE OF ORDER:

29 OCTOBER 2010

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1.Pursuant to subsection 411(1) of the Corporations Act 2001 (Cth) (Corporations Act):
(a)   Andean Resources Limited ACN 064 494 319 (Andean) convene a meeting (Scheme Meeting) of the holders of ordinary shares in Andean (Andean Shareholders), for the purpose of considering and, if thought fit, agreeing (with or without modification) to a scheme of arrangement proposed to be made between Andean and Andean Shareholders (Scheme), being the scheme substantially in the form of the draft contained in Annexure G of the scheme booklet containing the explanatory statement in relation to the Scheme, being Exhibit “1” in these proceedings (Scheme Booklet).
(b)   The Scheme Meeting be held at 10am (Sydney time) on 3 December 2010, at Harbour Terrace, Museum of Contemporary Art, 140 George Street, The Rocks, Sydney, Australia.
(c)   The Chairperson of the Scheme Meeting be Louis Gignac and in his absence Wayne Hubert.
(d)   The Chairperson appointed to the Scheme Meeting has the power to adjourn the Scheme Meeting in his absolute discretion.
(e)   An Andean Shareholder on the Canadian register of members (Canadian Shareholder) may appoint more than 2 proxies. If a Canadian Shareholder appoints more than 2 proxies, the appointment must specify the number of the Canadian Shareholder’s votes each proxy may exercise otherwise the appointment will be disregarded.
(f)   All voting at the Scheme Meeting be by poll as declared by the Chairperson.
(g)   At the Scheme Meeting, a person will be entitled to one vote for each Andean share that the person is registered as holding at 7pm (Sydney time) on 1 December 2010.
(h)   The explanatory statement in the Scheme Booklet for the Scheme be approved for distribution to Andean Shareholders.
(i)    There be…

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 Andean Resources Ltd

Details

AGLC: Re Andean Resources Ltd [2010] FCA 1190
Case: [2010] FCA 1190
Decision Date

CaseChat Overview and Summary

Andean Resources Limited applied to the Federal Court of Australia under section 411(1) of the Corporations Act 2001 (Cth) for an order convening a meeting of its shareholders for the purpose of considering and, if thought fit, agreeing to a scheme of arrangement concerning the transfer of their shares to Goldcorp Inc. The court was required to decide whether the proposal met the statutory requirements for convening such a meeting and whether there were any grounds to oppose the scheme. The central legal issues revolved around whether the scheme was properly formulated, whether Andean had complied with all statutory requirements, and whether the scheme was fair and reasonable to the shareholders.

Justice Jagot found that the proposal for the scheme of arrangement fit within the statutory concept of an arrangement under the Corporations Act. The court was satisfied that all the main facts relevant to the exercise of the shareholders' judgment were available, and ASIC had had a reasonable opportunity to examine the proposal and the draft explanatory statement. The scheme provided for shareholders to receive either cash, shares, or a combination of both, with a significant premium over the recent trading price of Andean shares. The independent expert's report concluded that the scheme was fair and reasonable and in the best interest of the shareholders. The court also noted that the scheme contained provisions to address potential issues, such as ineligible foreign shareholders and the directors' fiduciary duties. The court was satisfied that the scheme met all statutory criteria and approved the convening of the shareholders' meeting.

In conclusion, the Federal Court of Australia granted the application and ordered that Andean Resources Limited convene a meeting of its shareholders to consider the proposed scheme of arrangement. The court also approved the form and content of the explanatory statement to be distributed to the shareholders. The meeting was scheduled for 3 December 2010, with further hearings set for 8 December 2010 to approve the scheme if the necessary majority of shareholders voted in favour.

Orders