BULONG NICKEL PTY LTD [2002] WASC 226
| (2002) 26 WAR 466 | |||
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2002] WASC 226 | |
| 20/09/2002 | |||
| Case No: | COR:110/2002 | 28 JUNE 2002 | |
| Coram: | EM HEENAN J | 28/06/02 | |
| 13 | Judgment Part: | 1 of 1 | |
| Result: | Order approving scheme of arrangement | ||
| B | |||
| PDF Version |
| Parties: | BULONG NICKEL PTY LTD (ACN 000 807 036) AUSTRALIAN SECURITIES INVESTMENTS COMMISSION |
Catchwords: | Corporations Scheme of arrangement Approval of scheme agreed by statutory majority of creditors in number and value voting Effect of choice of foreign law clause in contract creating indebtedness Section 411 allows approval of scheme which varies rights of creditors notwithstanding choice of foreign law clause Scheme approved |
Legislation: | Corporations Act 2001, s 411 |
Case References: | Adams v National Bank of Greece and Athens [1961] AC 255 Barcelo v Electrolytic Zinc Co of Australasia (1932) 48 CLR 391 Bond Corporation Ltd v The State of Western Australia (No 2) (1992) 7 WAR 61 Cleary v Australian Co-op Foods Pty Ltd (No 3) (1999) 32 ASCR 701 ED & F Man (Sugar) Ltd v Yarni Haryanto (No 2) [1991] 1 Lloyd's Rep 429 Ellis v M'Henry (1871) LR 6 CP 228 Jacobs J v Credit Lyonnais (1884) 12 QBD 589 Kay's Leasing Corporation Pty Ltd v Fletcher (1964) 116 CLR 124 McClelland v Trustees Executor & Agency Co Ltd (1936) 55 CLR 483 Mount Albert Borough Council v Australian Assurance Society Ltd [1938] AC 224 Mynott v Barnard (1939) 62 CLR 68 Re Bulong Nickel Pty Ltd (2001) 42 ACSR 52 Re GIO Australia Holdings Ltd (1999) 33 ASCR 283 Re MB Group PLC [1989] BCLC 672 Vervaeke v Smith [1983] 1 AC 145 Wanganui-Rangitikei Electric Power Board v Australian Mutual Provident Society (1934) 50 CLR 581 Akai Pty Ltd v People's Insurance (1996) 188 CLR 418 Blair v Curran (1939) 62 CLR 464 Chamberlain v Deputy Comissioner of Taxation (1988) 164 CLR 502 Freehold Land Investments Ltd v Queensland Estates Pty Ltd (1970) 123 CLR 418 In Re Angelo & Continental Supply [1922] 2 Ch 723 John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503 McKain v Miller (1991) 174 CLR 1 Port of Melbourne Authority v Anshun Pty Ltd (No 2) (1981) 147 CLR 589 Rahim v Crawther (1996) 17 WAR 559 Re Norfolk Island Byron Bay Whaling Co (1970) 1 NSWR 221 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
AND
BULONG OPERATIONS PTY LTD
(ACN 008 930 881)
- Applicants
Catchwords:
Corporations - Scheme of arrangement - Approval of scheme agreed by statutory majority of creditors in number and value voting - Effect of choice of foreign law clause in…
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- AGLC
- Re Bulong Nickel Pty Ltd [2002] WASC 226
- Case
- [2002] WASC 226
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CaseChat Overview and Summary
The case of Re Bulong Nickel Pty Ltd involved the applicant, Bulong Nickel, seeking approval of a scheme of arrangement under the Corporations Act 2001. The applicant's creditors, both domestic and international, had reached an agreement on the terms of the scheme, meeting the statutory majority requirement in number and value. The primary dispute was whether the court could approve the scheme despite the presence of foreign law clauses in the contracts that created the debts. The High Court of Australia was tasked with determining whether these foreign law clauses, which specified the governing law of the contracts, precluded the court from approving the scheme.
The central legal issue was whether the choice of foreign law clauses in the creditor contracts could prevent the court from approving the scheme of arrangement. The High Court considered the provisions of Section 411 of the Corporations Act, which allows for the approval of schemes that vary the rights of creditors, regardless of any choice of law clauses. The Court needed to decide if these statutory provisions overrode the contractual choice of foreign law, enabling the approval of the scheme as agreed by the creditors.
In resolving the matter, the Court held that Section 411 of the Corporations Act permits the court to approve a scheme of arrangement even if it varies the rights of creditors, notwithstanding any choice of foreign law clauses in the underlying contracts. The Court found that the statutory framework provides a clear mechanism for the court to exercise its discretion to approve the scheme, consistent with the statutory majority approval by creditors. This decision underscored the primacy of the statutory scheme over contractual provisions that might otherwise limit the court's authority. Consequently, the Court approved the scheme of arrangement as proposed.
The final order of the Court was to approve the scheme of arrangement, recognising the statutory authority to do so despite the presence of foreign law clauses in the creditor contracts. This ruling reinforced the principle that the statutory provisions governing corporate restructuring take precedence over contractual terms that might otherwise restrict the court's powers in approving such schemes.
The central legal issue was whether the choice of foreign law clauses in the creditor contracts could prevent the court from approving the scheme of arrangement. The High Court considered the provisions of Section 411 of the Corporations Act, which allows for the approval of schemes that vary the rights of creditors, regardless of any choice of law clauses. The Court needed to decide if these statutory provisions overrode the contractual choice of foreign law, enabling the approval of the scheme as agreed by the creditors.
In resolving the matter, the Court held that Section 411 of the Corporations Act permits the court to approve a scheme of arrangement even if it varies the rights of creditors, notwithstanding any choice of foreign law clauses in the underlying contracts. The Court found that the statutory framework provides a clear mechanism for the court to exercise its discretion to approve the scheme, consistent with the statutory majority approval by creditors. This decision underscored the primacy of the statutory scheme over contractual provisions that might otherwise limit the court's authority. Consequently, the Court approved the scheme of arrangement as proposed.
The final order of the Court was to approve the scheme of arrangement, recognising the statutory authority to do so despite the presence of foreign law clauses in the creditor contracts. This ruling reinforced the principle that the statutory provisions governing corporate restructuring take precedence over contractual terms that might otherwise restrict the court's powers in approving such schemes.
Orders
Orders of the court
Order approving scheme of arrangement
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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