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Re Atlantic Gold NL (No 2)

Re Atlantic Gold NL (No 2)

Case [2014] FCA 869 6 August 2014

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FEDERAL COURT OF AUSTRALIA
Atlantic Gold NL, in the matter of Atlantic Gold NL (No 2) [2014] FCA 869

Citation: Atlantic Gold NL, in the matter of Atlantic Gold NL (No 2) [2014] FCA 869

Party: ATLANTIC GOLD NL ACN 062 091 909

File number: NSD 601 of 2014

Judge: JACOBSON J

Date of judgment: 6 August 2014

Catchwords: CORPORATIONS – scheme of arrangement – second court hearing – application pursuant to s 411 Corporations Act 2001 (Cth) to approve scheme of arrangement

Legislation:
Corporations Act 2001 (Cth) s 411(4)(b), s 411(6)

United States Securities Act 1933, s 3(a)(10)

Cases cited:

Atlantic Gold NL, in the matter of Atlantic Gold NL [2014] FCA 697

Re DUET Management Company 1 Limited [2013] NSWSC 817; (2013) 95 ACSR 34
Re DUET Management Company 1 Limited (No 2) [2013] NSWSC 1060
Re Investorinfo Limited [2005] FCA 1848; (2006) 24 ACLC 44
Re Prime Infrastructure Holdings Limited [2010] NSWSC 1337
Re Solution 6 Holdings Limited [2004] FCA 1049; (2004) 50 ACSR 113

Date of hearing: 6 August 2014

Place: Sydney

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 9

Counsel for the Plaintiff: Mr M Oakes SC

Solicitor for the Plaintiff: Norton Rose Fulbright

Counsel for SPW Ventures Inc Mr J Williams

Solicitor for SPW Ventures Inc Herbert Smith Freehills

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 601 of 2014

IN THE MATTER OF ATLANTIC GOLD NL ACN 062 091 909

ATLANTIC GOLD NL ACN 062 091 909
Plaintiff

JUDGE:

JACOBSON J

DATE OF ORDER:

6 AUGUST 2014

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1.Pursuant to paragraph 411(4)(b) and subsection 411(6) of the Corporations Act 2001 (Cth) (Act), the scheme of arrangement between the plaintiff (Atlantic) and the holders of fully paid and partly paid ordinary shares in Atlantic (Atlantic Shareholders), in the form of Annexure G to the scheme booklet behind Tab 2 of Exhibit WRB-1 to the affidavit of Walter Ralph Bucknell sworn 24 June 2014 and filed in this proceeding, be approved, subject to the following alterations:
(a)   deletion of the words “(other than statements of holding in favour of any Excluded Shareholders)” and “(other than entries on the Atlantic Share Register in respect of any Excluded Shareholders)” in clause 7.2(d) to the scheme of arrangement;
(b)   deletion of the definition of “Excluded Shareholder” in Schedule 1 to the scheme of arrangement;
(c)   deletion of the words “(other than the Excluded Shareholders)” from the definition of “Scheme Meeting” in Schedule 1 to the scheme of arrangement;
(d)   deletion of the words “(other than an Atlantic Fully Paid Share held by an Excluded Shareholder)” from the definitions of “Scheme Share Category 1” in Schedule 1 to the scheme of arrangement; and
(e)   deletion of the words “(other than an Atlantic Partly Paid Share held by an Excluded Shareholder)” from the definition of “Scheme Share Category 2” in Schedule 1 to the scheme of arrangement;…

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 Atlantic Gold NL (No 2)

Details

AGLC: Re Atlantic Gold NL (No 2) [2014] FCA 869
Case: [2014] FCA 869
Decision Date

CaseChat Overview and Summary

In the Federal Court of Australia, Atlantic Gold NL, the plaintiff, applied for the approval of a scheme of arrangement under s 411(4)(b) and s 411(6) of the Corporations Act 2001 (Cth). The proposed scheme involved alterations to the original terms, which were previously set out in the court’s earlier decision. The scheme meeting was held on 31 July 2014 and resulted in statutory majorities being comfortably obtained, including when the votes of partly paid shareholders were tagged. The principal alteration to the scheme was the removal of references to excluded shareholders, which was deemed appropriate as the evidence confirmed that Spur Ventures Inc did not hold any shares in Atlantic. Other proposed alterations were minor in nature and aligned with the principles set out by Gyles J in Re Investorinfo Limited.

The court was required to decide whether to approve the scheme subject to the proposed alterations and to consider the DUET order, which addresses the issue of Malaysian shareholders not being provided with the explanatory memorandum and scheme booklet. The court referenced the Supreme Court of New South Wales' approach in Re DUET Management Company 1 Limited and Re DUET Management Company 1 Limited (No 2) and proposed to make an order in identical terms to the corresponding order made by the Supreme Court in the DUET matter. Additionally, the court considered whether Spur Ventures Inc could rely on the court's approval of the scheme for the exemption from the registration requirements of the United States Securities Act 1933.

The court, having considered the evidence and submissions, was satisfied that the scheme was fair and reasonable, and that the proposed alterations were appropriate. The court held a public hearing and provided notice to all shareholders of Atlantic prior to the proposal being considered by the meeting of those shareholders. No shareholder appeared to object to the scheme. Based on these considerations, the court approved the scheme with the proposed alterations, made the corresponding DUET order, and noted that Spur Ventures Inc would rely on the court's approval for the exemption from the US Securities Act registration requirements.

The court made orders approving the scheme with the proposed alterations, exempting Atlantic from compliance with certain provisions of the Corporations Act, validating the resolution passed by Atlantic Shareholders, and requiring Atlantic to lodge a copy of the approved scheme with the Australian Securities and Investments Commission.

Orders