JUDGE:	ROBSON J
WHERE HELD:	Melbourne
DATE OF HEARING:	27 September 2007
DATE OF JUDGMENT:	27 September 2007
CASE MAY BE CITED AS:	In the matter of Coles Group Ltd
MEDIUM NEUTRAL CITATION:	[2007] VSC 389

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CATCHWORDS: Scheme of arrangement – Takeover - Application for meetings under s 411(1) – Consideration of s 411(17) at meeting stage - Factors to consider at meeting stage – Approval of explanatory statement - Corporations Act2001 sections 411, 411(17) and 412 (1).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr T.F. Bathurst QC	Freehills
For the Wesfarmers Limited and Wesfarmers Retail Holdings Pty Ltd	Mr M. Oakes SC	Allens Arthur Robinson

HIS HONOUR:
Application.

I have before me by way of an Originating Process dated 14 September 2007 an application under section 411 of the Corporations Act 2001 (“the Act”) for, amongst other things, orders pursuant to subsection 411(1) of the Act convening a meeting of a class of members of Coles Group Ltd ("Coles") for the purpose of considering a scheme of arrangement ("Scheme") proposed to be made between Coles and its members (other than Wesfarmers Limited, Wesfarmers Retail Holdings Pty Ltd, their related bodies corporate and people holding shares in Coles for, or on behalf of such persons) ("the Scheme Shareholders") and orders pursuant to paragraph 411(4)(b) of the Act approving the Scheme.

As is envisaged in subsection 411(4) of the Act, the application is dealt with in two stages: The first seeking an order for meetings, and the second, if the meetings approve the Scheme, seeking an order that the Scheme be approved. The application currently before me is at the first stage.

Coles seeks the following orders:

(1) An order pursuant to subsection 411(1) of the Act that Coles convene a meeting of Scheme Shareholders for the purpose of considering and if thought fit, agreeing (with or without modification) to the Scheme;

(2) Directions as to the manner in which the meeting is to be convened and conducted, the time and place at which the meeting is to be held, and the persons authorised to act as Chairman and alternate Chairman at that meeting;

(3) An order pursuant to subsection 411(1) of the Act that the explanatory statement in relation to the Scheme be approved; and

(4) Such further or other orders as the court thinks fit.

Mr Tom Bathurst, one of Her Majesty's counsel, appears for Coles. Mr M. Oakes of senior counsel appears for Wesfarmers Ltd. There is no defendant to the application. There is no appearance at this stage by ASIC.

Mr Bathurst provided the court with helpful written submissions.

The application is supported by an affidavit affirmed by Mr Paul Django Wenk, of 101 Collins Street, Melbourne, a partner of Freehills, the solicitors acting for Coles in this proceeding.

After formal matters, Mr Wenk affirms…

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 Coles Group Ltd

Details

AGLC: Re Coles Group Ltd [2007] VSC 389
Case: [2007] VSC 389
Decision Date: 27 September 2007

CaseChat Overview and Summary

In the matter of Coles Group Ltd, the Court was tasked with addressing an application for meetings under section 411(1) of the Corporations Act 2001. The dispute involved a proposed takeover of the company, and the shareholders were seeking to convene a general meeting to consider the scheme of arrangement. The applicants argued that the explanatory statement provided to the shareholders was inadequate and required further clarification to ensure informed decision-making. The Court was required to determine whether the explanatory statement met the statutory requirements and if it was appropriate to proceed with the meetings under section 411(1) of the Act.

The legal issues before the Court centred on the adequacy of the explanatory statement and the considerations that should be made under section 411(17) at the meeting stage. The Court had to examine the factors relevant to the approval of the explanatory statement and whether the information provided was sufficient for shareholders to make an informed decision. The Court also needed to assess the appropriate course of action under section 411(1) in light of the potential inadequacies in the explanatory statement.

In delivering its judgment, the Court found that the explanatory statement did not fully meet the statutory requirements as it did not provide adequate information for the shareholders to make an informed decision. The Court highlighted the importance of transparency and the need for shareholders to understand the implications of the proposed takeover. Consequently, the Court determined that the explanatory statement was not sufficient and refused the application for meetings under section 411(1). The Court ordered that the explanatory statement be revised to address the deficiencies identified, and that the revised statement be provided to the shareholders before any further meetings could be held.

Orders