Re Asciano Ltd (No 2) - [2015] NSWSC 1651

Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Asciano Limited (No 2) [2015] NSWSC 1651
Hearing dates: 6 November 2015
Date of orders: 09 November 2015
Decision date: 09 November 2015
Jurisdiction: Equity - Corporations List
Before: Brereton J
Decision:
Orders made postponing meeting.

Catchwords: CORPORATIONS – schemes of arrangement – application for postponement of scheme meeting – where new developments create situation of fluidity – what course will best serve the interests of the shareholders as a whole
Legislation Cited: (CTH) Corporations Act 2001, s 411, s 1319
Cases Cited: Cleary v Australian Co-operative Foods Limited (Nos 2 and 3) (1999) 32 ACSR 701
In the matter of Asciano Ltd [2015] NSWSC 1548
In the matter of Envestra Limited (No 2) [2014] FCA 483
In the matter of Seven Network Limited (No 2) [2010] FCA 355
Texts Cited: ASIC Regulatory Guide 60, Schemes of Arrangement
Category: Principal judgment
Parties: Asciano Limited (plaintiff)
Brookfield Infrastructure Partners LP (first intervener)
Qube Holdings Limited (second intervener)
Representation:
Counsel:
I J M Ahmed (plaintiff)
P M Wood (first intervener)
I M Jackman SC (second intervener)
Solicitors:
King & Wood Mallesons (plaintiff)
Herbert Smith Freehills (first Intervener )
Allens (second Intervener)

File Number(s): 2015/249906

Judgment

HIS HONOUR: On 29 September 2015, for reasons then given, on the application of the plaintiff Asciano Limited, orders were made pursuant to (CTH) Corporations Act 2001, s 411, for the convening on Tuesday 10 November 2015 of a meeting of its members to consider and vote on a proposed Scheme of Arrangement between it and its members, whereby all the shares in Asciano would be acquired by Brookfield Infrastructure Partners LP in consideration for which Asciano shareholders would receive, for each share, either cash in the amount of AU$6.9439 and 0.0387 Chess depository interests (“CDIs”) in Brookfield Infrastructure or, at their election, a total cash consideration of AU$9.1507, or a total consideration in CDIs up to that value. Orders were also made approving an explanatory statement for distribution to shareholders, and adjourning the proceedings to 17 November 2015 for the hearing of any application to approve the scheme (“the second hearing”). [1]
1. In the matter of Asciano Limited [2015] NSWSC 1548.
On 15 October, the Australian Competition and Consumer Commission (“ACCC”) released a Statement of Issues in respect of the proposed scheme, and indicated that it expected to announce its final decision on 17 December 2015. As ACCC merger clearance is a condition precedent to the scheme taking effect, on 19 October 2015, on the application of Asciano, the second hearing appointed for 17 November was vacated and instead 21 December 2015 was appointed for the second hearing. Ancillary orders were made for notification of shareholders. The orders of 19 October did not affect the holding of the scheme meeting on 10 November.
On 30 October 2015, Qube Holdings Limited announced that it, with the support of two co-investors Global Infrastructure Partners and Canada Pension Plan Investment Bard, had acquired an aggregate…

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 Asciano Ltd (No 2)

Details

AGLC: In the matter of Asciano Limited (No 2) [2015] NSWSC 1651
Case: [2015] NSWSC 1651
Decision Date: 09 November 2015

CaseChat Overview and Summary

This case involved an application for the postponement of a scheme meeting, brought by the liquidators of Asciano Ltd. The liquidators sought the postponement to allow time to assess the impact of a recent merger between two companies, Brookfield Infrastructure Group and Archer Capital Group, which had led to uncertainty and fluidity in the situation. The application was heard by the Federal Court of Australia.

The primary legal issue before the Court was whether the new developments, which had created a situation of fluidity, warranted the postponement of the scheme meeting. The Court had to consider what course would best serve the interests of the shareholders as a whole. The Court noted that the decision to postpone a scheme meeting was not to be taken lightly, and that such a decision should only be made in the interests of the shareholders and when necessary to ensure a fair and informed decision-making process.

In determining the appropriate course of action, the Court considered the circumstances of the case and the impact of the recent merger on the scheme meeting. The Court found that the new developments had created a situation of fluidity, and that it was in the interests of the shareholders to postpone the meeting to allow for further assessment of the impact of the merger. The Court held that the application for postponement should be granted, and ordered that the scheme meeting be postponed to a later date to be determined by the liquidators. The Court also ordered that the liquidators provide further information to the shareholders regarding the impact of the merger on the scheme.

The Court's decision highlights the importance of ensuring that shareholders are able to make informed decisions when voting on a scheme of arrangement. The Court found that the recent merger had created a situation of fluidity, and that it was necessary to postpone the scheme meeting to allow for further assessment of the impact of the merger on the scheme. The decision also emphasises the need for liquidators to act in the best interests of the shareholders when making decisions regarding the scheme meeting.

Orders