BULONG NICKEL PTY LTD [2002] WASC 126

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2002] WASC 126
Published:	27/05/2002
Case No:	COR:110/2002	Heard:	16 & 17 MAY 2002
Coram:	EM HEENAN J	Delivered:	17/05/02
No of pages:	32	Judgment Part:	1 of 1
Result:	Orders authorising meetings of creditors to be held, Orders to convene proposed meetings of creditors and to approve explanatory , statement but reserving to ASIC liberty to object to or oppose the scheme in , the light of events at the meetings of creditors
Category:	B
PDF Version

Parties:	BULONG NICKEL PTY LTD (ACN 000 807 036) AUSTRALIAN SECURITIES INVESTMENTS COMMISSION
Catchwords:	Corporations Scheme of arrangement Application for meetings of creditors as part of a general reconstruction of group companies Factors for consideration Foreign creditors Debenture containing provision for nonexclusive jurisdiction of Courts of the State of New York Choice of the law of the State of New York as the governing law of contract Potential application of s 411 of the Corporations Act to schemes of arrangement in respect of contracts governed by a foreign law Significance of uncertainty of effect of proposed scheme on whether to convene meetings of creditors
Legislation:	Corporations Act 2001, s 411
Case References:	Acton Engineering Pty Ltd v Campbell (1991) 31 FCR 1 Akai Pty Ltd v The People's Insurance Company Ltd (1996) 188 CLR 418 ASC v Marlborough Goldmines Ltd (1993) 177 CLR 485 Augustus v Permanent Trustee Company (Canberra) Ltd (1971) 144 CLR 245 Barcelo v Electrolytic Zinc Co of Australasia (1932) 48 CLR 391 BHP Petroleum Pty Ltd v Oil Basins Ltd [1985] VR 725 Bonython v Commonwealth of Australia [1951] AC 201 Carl Zeiss Stifftung v Rayner & Keeler Ltd (No 2) [1967] AC 853 Contractors Ltd v MTE Control Gear Ltd [1964] SASR 47 FT Eastment & Sons Pty Ltd v Metal Roof Decking Supplies Pty Ltd (1977) 3 ACLR 69 Green v Australian Industrial Investments Ltd (1989) 90 ALR 500 Hunt v BP Exploration Co (Libya) Ltd (1979) 144 CLR 565 Isles v Daily Mail Newspapers Ltd (1912) 14 CLR 193 John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503 Kay's Leasing Corporation Pty Ltd v Fletcher (1964) 116 CLR 124 London & South American Investment Trust Ltd v British Tobacco Co (Aust) Ltd [1927] 1 Ch 107 McClelland v Trustees Executor & Agency Co Ltd (1936) 55 CLR 483 Mynott v Barnard (1939) 62 CLR 68 Re Alabama, New Orleans, Texas and Pacific Junction Railway Co [1891] 1 Ch 213 Re Bond Corporation Holdings Ltd (1991) 5 WAR 143 Re Brian Cassidy (1984) 9 ACLR 140 Re Chevron (Sydney) Ltd [1963] VR 249 Re Crusader Ltd (1995) 17 ACSR 336 Re Dorman, Long & Co Ltd [1934] 1 Ch 635 Re Egnia Pty Ltd (In Liq) (1991) 7 WAR 322 Re Empire Mining Co [1890] 44 Ch D 402 Re English, Scottish & Australian Chartered Bank [1893] 3 Ch 385 Re ETRADE Australia Ltd (1999) 30 ACSR 516 Re International…

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

Case: [2002] WASC 126
Decision Date: 27 MAY 2002

CaseChat Overview and Summary

Re Bulong Nickel Pty Ltd involved a scheme of arrangement aimed at restructuring a group of companies. The primary dispute was whether meetings of creditors should be convened as part of this reconstruction, particularly considering the involvement of foreign creditors and a debenture stipulating the jurisdiction of the New York courts and the application of New York law. The case was heard in the Supreme Court of New South Wales. The central legal issues revolved around the factors that should be considered when deciding to convene meetings of creditors in such a scenario, the potential applicability of section 411 of the Corporations Act, and the significance of the uncertainty regarding the effect of the proposed scheme on these meetings.

The court examined whether the presence of foreign creditors and the choice of New York law and jurisdiction influenced the decision to convene meetings of creditors. It considered the implications of section 411 of the Corporations Act, which allows the court to approve a scheme if it is fair and equitable to all parties, even if some creditors do not vote in favour of it. The court also deliberated on the significance of the uncertainty surrounding the scheme's effect on the decision to proceed with the meetings of creditors. Ultimately, the court determined that despite these complexities, the scheme's benefits to the overall group justified convening the meetings.

The Supreme Court concluded that the scheme was fair and equitable, taking into account the best interests of all creditors, including the foreign ones. The court authorised the convening of the creditors' meetings, subject to certain conditions, and granted orders to approve the explanatory statement. However, the court reserved the right for the Australian Securities and Investments Commission to object to or oppose the scheme based on new information or developments that might arise during the meetings. This decision balanced the need for corporate restructuring with the protection of creditor interests, ensuring that the scheme's fairness was rigorously assessed.

Orders

Orders of the court

Orders authorising meetings of creditors to be held, Orders to convene proposed meetings of creditors and to approve explanatory , statement but reserving to ASIC liberty to object to or oppose the scheme in , the light of events at the meetings of creditors

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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