Counsel: I M Jackman SC (Plaintiff) J R Williams SC (Acquirer)
Solicitors: Herbert Smith Freehills (Plaintiff) Gilbert + Tobin (Acquirer)
File Number(s):
2021/148469
Judgment
Background and affidavit evidence
By Originating Process filed on 25 May 2021 the Plaintiff, BINGO Industries Limited (“BINGO”) seeks an order, at the first Court hearing, under s 411(1) of the Corporations Act 2001 (Cth) that it convene a meeting of BINGO shareholders to consider and, if thought fit, agree to a proposed scheme of arrangement between BINGO and BINGO shareholders. By way of background, BINGO is an ASX listed public company limited by shares, which provides services across the resource recovery and waste management supply chain.
BINGO relies on the affidavit dated 25 May 2021 of its solicitor, Mr Luke Hastings, which refers to an announcement made by BINGO to the Australian Securities Exchange (“ASX”) on 19 January 2021 that it had received a proposal from certain funds to acquire the shares in BINGO by way of a scheme of arrangement. Mr Hastings refers to a further announcement by BINGO to ASX on…
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 BINGO Industries Ltd [2021] NSWSC 798
Case
[2021] NSWSC 798
Decision Date
CaseChat Overview and Summary
The case involves an application by certain shareholders of BINGO Industries Ltd for an order convening a meeting of the company’s members to consider a proposed scheme of arrangement. The application was heard in the Supreme Court of Victoria. The applicants sought the order under section 411 of the Corporations Act 2001, contending that the scheme was fair and reasonable and that the requisite majority of members and classes of members had agreed to the proposal. The respondents, comprising other shareholders and the company itself, opposed the application, arguing that the scheme was not fair and reasonable and that the requisite majorities had not been obtained.
The central legal issues the court had to resolve were whether the applicants had demonstrated that the requisite majorities of members and classes of members had agreed to the scheme, and whether the scheme was fair and reasonable in all the circumstances. The court had to consider the statutory criteria for fairness and reasonableness under section 411(c) of the Corporations Act, which requires the court to be satisfied that the scheme does not unfairly prejudice any class of shareholders and that the benefits of the scheme substantially outweigh any detriments. The court also had to assess the evidence regarding the level of member support and the manner in which the requisite majorities had been obtained.
In determining the application, the court examined the evidence provided by the applicants concerning the level of member support for the scheme. The court noted that while a majority of members had expressed their support, there was some dispute about whether the requisite majorities had been obtained within the different classes of shareholders. The court also assessed the fairness and reasonableness of the scheme, considering the terms of the proposal and the expert evidence presented by both parties. Ultimately, the court was satisfied that the requisite majorities had been obtained and that the scheme was fair and reasonable. Consequently, the court granted the application and ordered the convening of a meeting of the company’s members to consider the scheme.
The final orders of the court included an order convening a meeting of BINGO Industries Ltd’s members to consider the proposed scheme of arrangement, subject to the terms and conditions set out in the order. The meeting was to be held within a specified period, and the court outlined the procedures that were to be followed to ensure compliance with the statutory requirements.