FEDERAL COURT OF AUSTRALIA
Crown Resorts Limited, in the matter of Crown Resorts Limited (No 2) [2022] FCA 710
File number(s): VID 111 of 2022 Judgment of: ANDERSON J Date of judgment: 15 June 2022 Date of publication of reasons: 22 June 2022 Catchwords: CORPORATIONS – scheme of arrangement – second court hearing – approval of scheme – approval granted Legislation: Corporations Act 2001 (Cth)
Corporations Regulations 2001 (Cth)
Federal Court Rules 2011 (Cth)
Cases cited: Afterpay Holdings Limited, in the matter of Afterpay Holdings Limited (No 2) [2017] FCA 737
AGL Gas Networks Limited (Application of) [2001] NSWSC 165; (2001) 37 ACSR 441
Asaleo Care Limited, in the matter of Asaleo Care Limited (No 2) [2021] FCA 636
BigAir Group Limited, in the matter of BigAir Group Limited (No 2) [2016] FCA 1513
Billabong International Limited, in the matter of Billabong International Limited (No 2) [2018] FCA 496
Crown Resorts Limited, in the matter of Crown Resorts Limited [2022] FCA 367
Drillsearch Energy Limited, in the matter of Drillsearch Energy Limited (No 2) [2016] FCA 126
In the matter of Aventus Holdings Limited and Aventus Capital Limited as responsible entity of the Aventus Retail Property Fund [2022] NSWSC 266
In the matter of Aveo Group Limited and Aveo Funds Management Limited [2019] NSWSC 1679
In the matter of Coca-Cola Amatil Limited [2021] NSWSC 489
In the matter of Isentia Group Limited [2021] NSWSC 1069
In the matter of Spark Infrastructure RE Limited [2021] NSWSC 1564
Independent Practitioner Network Ltd, in the matter of Independent Practitioner Network Ltd (No 2) [2008] FCA 1593; (2006) 26 ACLC 1249
Industrea Limited, in the matter of Industrea Limited (No 2) [2012] FCA 1287
iProperty Group Limited, in the matter of iProperty Group Limited (No 2) [2016] FCA 36
Permanent Trustee Company (2002) 43 ACSR 601; [2002] NSWSC 1177
Prime Infrastructure Holdings Ltd [2010] NSWSC 1337
Professional Investment Holdings Limited, in the matter of Professional Investment Holdings Limited (No 2) [2010] FCA 1336
Re Adelaide Air Conditioning and Domestic Engineers Ltd (In Liq) [1972] 6 SASR 603
Re Amcor (No 2) [2019] FCA 842
Re Atlas Iron Ltd (No 2) [2016] FCA 481
Re Australian Co-operative Foods Ltd [2001] NSWSC 382; (2001) 38 ACSR 71
Re AXA Asia Pacific Holdings Ltd (No 2) [2011] VSC 102
Re BTS Bearings and Transmission Supplies Pty Ltd (1983) 8 ACLR 287
Re Central Pacific Minerals NL [2002] FCA 239
Re Coles Group Ltd (No 2) (2007) 65 ACSR 494
Re David Jones Limited (No 3) [2014] FCA 753
Re Equinox Resources Ltd (2004) 49 ACSR 692
Re Gasweld Pty Ltd (1986) 5 NSWLR 494; (1986) 4 ACLC 560
Re GBST Holdings Ltd [2019] NSWSC 1503
Re H Craig Pty Ltd (1971–73) CLC 40-026
Re Homemaker Retail Management Ltd (2001) 40 ACSR 116
Re Hostworks Group Ltd (No 2) [2008] FCA 248
Re Huon Aquaculture Group Limited (No 2) [2021] FCA 1385
Re NRMA Ltd (No 2) (2000) 156 FLR 412; [2000]…
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- Case
- [2022] FCA 710
- Decision Date
CaseChat Overview and Summary
The court considered the principles applicable to the exercise of its discretion to alter a scheme of arrangement, as established in previous cases. It noted that the discretion can only be exercised at the time of approving the scheme at the final court hearing and cannot be exercised post-approval. Additionally, the discretion may be exercised if the alteration is minor or technical and does not significantly affect the scheme's details or substantive operation. The court concluded that the proposed alteration was minor and technical, did not recast the scheme, and improved its smooth working. Therefore, the court exercised its discretion to approve the alteration and the amended scheme of arrangement. The court also granted exemptions from certain compliance requirements and ordered that the amended scheme be approved forthwith.
Orders
Orders of the court
1. Pursuant to section 411(6) of the Act, the Scheme of Arrangement between the plaintiff and its members agreed to by the said members at the meeting held on 20 May 2022 (Scheme) be altered as shown in tracked changes in Annexure A to these orders, such that the Scheme as so altered is as set out in Annexure B to these orders
2. Pursuant to section 411(4)(b) of the Act, the Scheme as so altered be and is hereby approved.
3. Pursuant to section 411(12) of the Act, the plaintiff be exempted from compliance with section 411(11) of the Act in relation to the Scheme.
4. Pursuant to rule 39.34 of the Federal Court Rules 2011 (Cth), these orders be entered forthwith.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
I agree with Crown’s submissions. The matter raised by Maurice Blackburn in its letter is not a relevant consideration as to whether the Scheme, in its present form or an amended form, should be approved or not.ALTERATION TO THE TERMS OF THE SCHEME On the morning of the hearing on 15 June 2022, Crown tendered in evidence the Sixth Levy Affidavit. Crown relies upon the matters deposed to in the Sixth Levy Affidavit to alter the terms of the Scheme pursuant to s 411(6) of the Act to make clear that a certain parcel of shares beneficially held by a related body corporate of Blackstone is excluded from the operation of the Scheme. Crowns submits that the Sixth Levy Affidavit establishes this was always the intended position but, without the alterations sought, may not be how the Scheme operates. That is so because it transpired that, contrary to Crown’s understanding until very recently, the registered proprietor of the relevant shares will not, at the operative date, be a related body corporate of Blackstone.ALTERING SCHEME – APPLICABLE PRINCIPLES Crown submits that pursuant to s 411(6) of the Act, the Court may approve a scheme of arrangement subject to such alterations or conditions as it thinks just. Crown submits that the following principles emerge from the decided cases concerning the application of the Court's discretion in relation to alterations or conditions under s 411(6): Re lnvestorinfo Ltd [2005] FCA 1848; (2006) 24 ACLC 44 at 45 [7] per Gyles J, Independent Practitioner Network Ltd, in the matter of Independent Practitioner Network Ltd (No 2)[2008] FCA 1593; (2006) 26 ACLC 1249 (Independent Practitioner Network Ltd (No 2)) at [16]; and Professional Investment Holdings Limited, in the matter of Professional Investment Holdings Limited (No 2) [2010] FCA 1336 at [38]-[39]. First, the discretion has to be exercised at the time the scheme is approved at the final court hearing and cannot be exercised after the approval order has been made: Re BTS Bearings and Transmission Supplies Pty Ltd (1983) 8 ACLR 287 at 287; Re Gasweld Pty Ltd (1986) 5 NSWLR 494; (1986) 4 ACLC 560 at 561; AGL Gas Networks Limited (Application of) [2001] NSWSC 165; (2001) 37 ACSR 441 at 448 [25]; Re Australian Co-operative Foods Ltd [2001] NSWSC 382; (2001) 38 ACSR 71 (Co-operative Foods Ltd) at 89 [85]. Second, the discretion may be exercised if the alteration is of a minor or technical kind which does not really affect the details of, or recast, the scheme : Re Adelaide Air Conditioning and Domestic Engineers Ltd (In Liq) [1972] 6 SASR 603 at 605 (Zelling J); Re H Craig Pty Ltd (1971–73) CLC 40-026 (Mitchell J) at 27, 233; Industrea Limited, in the matter of Industrea Limited (No 2) [2012] FCA 1287 at [5]; Billabong International Limited, in the matter of Billabong International Limited (No 2) [2018] FCA 496 at [13]. Third, the discretion may be exercised if the alteration is of a minor or technical kind which improves the smooth working of the scheme or which does not affect the substantive operation of the scheme: Permanent Trustee Company (2002) 43 ACSR 601; [2002] NSWSC 1177 at 608 [21]; Re Homemaker Retail Management Ltd (2001) 40 ACSR 116 at 122-123 [25].