CORPORATIONS – Scheme of arrangement – three stages to promulgate and give effect to scheme – application, approval of meeting, approval of the Court – basis on which the Court will grant approval – requirements of public policy and commercial morality – absence of oppression – reasonableness – evidence of accountant
Corporations Act 2001 (Cth) ss 411(1), 411(4)(b), 411(11), 411(12), 412(1)(a)
CENTRAL PACIFIC MINERALS NL (ABN 14 008 460 651) PLAINTIFF
N 3014 OF 2001
EMMETT J
27 FEBRUARY 2002
SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
N 3014 OF 2001
CENTRAL PACIFIC MINERALS NL (ABN 14 008 460 651) PLAINTIFF
JUDGE:
EMMETT J
DATE OF ORDER:
27 FEBRUARY 2002
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.the scheme of arrangement between the plaintiff and its ordinary shareholders as set out in the ordinary scheme document annexed to these orders and marked “A” be approved;
2.the scheme of arrangement between the plaintiff and its contributory shareholders as set out in the contributory scheme document annexed to these orders and marked “B” be approved;
3.the scheme of arrangement between the plaintiff and its equity participation shareholders as set out in the equity participation scheme document annexed to these orders and marked “C” be approved;
4.the scheme of arrangement between the plaintiff and its convertible note holders as set out in the convertible notes scheme document annexed to these orders and marked “D” be approved; and
5.pursuant to s 411(12) of the Corporations Act 2001 (Cth), the plaintiff be exempted from compliance with s 411(11) of the Corporations Act, in relation to each of the four schemes approved in Orders 1 to 4.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
N 3014 OF 2001
CENTRAL PACIFIC MINERALS NL (ABN 14 008 460 651) PLAINTIFF
JUDGE:
EMMETT J
DATE:
27 FEBRUARY 2002
PLACE:
SYDNEY
REASONS FOR JUDGMENT
The plaintiff, Central Pacific Minerals NL (“CPM”), seeks orders pursuant to Part 5.1 of the Corporations Act2001 (Cth) for approval of four schemes of arrangement proposed between CPM, on the one hand, and the holders of four different classes of securities issued by CPM on the other. On 11 December 2001, Hely J made orders pursuant to s 411(1) of the Corporations Act that there be meetings convened of the relevant classes of security holder. Those meetings have now been convened and CPM seeks orders pursuant to s 411(4)(b) of the Corporations Act that schemes be approved by the Court.
Section 411(1) relevantly provides that, where an arrangement is proposed between a company and any class of its members, the Court may order a meeting of that class of members to be convened. Where the Court makes such an order, the Court may approve the explanatory memorandum required by paragraph 412(1)(a) to accompany notice of the meeting.
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 Central Pacific Minerals NL
Sign in free to access the full text
Details
AGLC
Re Central Pacific Minerals NL [2002] FCA 239
Case
[2002] FCA 239
Decision Date
CaseChat Overview and Summary
The matter before the Court was an application by Central Pacific Minerals NL for approval of four schemes of arrangement under the Corporations Act 2001. The schemes sought to effect the reorganisation of the company's capital structure and its exit from voluntary administration. The schemes involved the company's ordinary shareholders, contributory shareholders, equity participation shareholders, and convertible note holders. The Court had to determine whether the schemes were in the best interests of the respective classes of shareholders and whether they met the statutory requirements.
The primary legal issue was whether the Court should approve each of the four proposed schemes of arrangement. This involved assessing whether the schemes met the statutory criteria, including whether the majority of each class of affected shareholders had voted in favour of the scheme and whether the Court was satisfied that the scheme was fair and reasonable to each class of shareholders. The Court also had to consider whether the proposed exemption from certain procedural requirements of the Act was appropriate.
The Court found that the schemes met the statutory requirements and were in the best interests of the respective classes of shareholders. The Court was satisfied that the majority of each class had voted in favour of the scheme and that the schemes were fair and reasonable. The Court also found that the exemption from certain procedural requirements was appropriate given the circumstances of the case. Accordingly, the Court approved each of the four schemes of arrangement.
Pursuant to s 411(12) of the Corporations Act, the Court exempted the plaintiff from compliance with s 411(11) of the Corporations Act, in relation to each of the four schemes approved in the orders. The Court ordered that the scheme of arrangement between the plaintiff and its ordinary shareholders be approved, as set out in the ordinary scheme document annexed to these orders and marked "A". Similarly, the Court approved the scheme of arrangement between the plaintiff and its contributory shareholders, as set out in the contributory scheme document annexed to these orders and marked "B". The Court also approved the scheme of arrangement between the plaintiff and its equity participation shareholders, as set out in the equity participation scheme document annexed to these orders and marked "C". Finally, the Court approved the scheme of arrangement between the plaintiff and its convertible note holders, as set out in the convertible notes scheme document annexed to these orders and marked "D".
Orders
Orders of the court
1. the scheme of arrangement between the plaintiff and its ordinary shareholders as set out in the ordinary scheme document annexed to these orders and marked “A” be approved;
2. the scheme of arrangement between the plaintiff and its contributory shareholders as set out in the contributory scheme document annexed to these orders and marked “B” be approved;
3. the scheme of arrangement between the plaintiff and its equity participation shareholders as set out in the equity participation scheme document annexed to these orders and marked “C” be approved;
4. the scheme of arrangement between the plaintiff and its convertible note holders as set out in the convertible notes scheme document annexed to these orders and marked “D” be approved; and
5. pursuant to s 411(12) of the Corporations Act 2001 (Cth), the plaintiff be exempted from compliance with s 411(11) of the Corporations Act, in relation to each of the four schemes approved in Orders 1 to 4.