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Re CSG Limited (No 2)

Re CSG Limited (No 2)

Case [2020] NSWSC 39 5 February 2020

Scheme of Arrangement

Regulatory Approval

Corporate Restructuring

Corporate Law & Governance

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Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: In the matter of CSG Limited (No 2) [2020] NSWSC 39
Hearing dates: 5 February 2020
Date of orders: 05 February 2020
Decision date: 05 February 2020
Jurisdiction: Equity - Corporations List
Before: Gleeson J
Decision:
(1) Pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth) (the Act), the scheme of arrangement between the plaintiff and its members agreed to by the said members at the meeting held on 3 February 2020 (the terms of which were set out in Annexure B to the orders of the Court made on 17 December 2019) (Scheme), be approved.

(2) Pursuant to s 411(12) of the Act, the plaintiff be exempted from compliance with s 411(11) of the Act in relation to the Scheme.
(3) These orders be entered forthwith.
Catchwords: CORPORATIONS – Scheme of arrangement – transfer scheme – approval of scheme under Corporations Act 2001 (Cth) s 411(4)(b) – whether direct evidence of conditions precedent relating to regulatory approval is appropriate – Scheme approved
Legislation Cited: Corporations Act 2001 (Cth), ss 411(4), 411(11), 411(12), 411(17), Ch 6
Competition and Consumer Act 2010 (Cth), s 50
Cases Cited: Central Pacific Minerals NL (2002) FCA 239
Legend Corporation Limited (No 2) [2019] FCA 1444
MAC Services Group Limited [2010] NSWSC 1474
Macquarie Private Capital A Limited [2008] NSWSC 323
Re Mosaic Oil NL (No 2) [2010] FCA 1186
Re Permanent Trustee Co Ltd (2002) 43 ACSR 601
Re Seven Network Limited (No 3) (2010) 77 ACSR 701
Re Toll Holdings Ltd (No 2) [2015] VSC 236
W D & H O Wills Holdings Ltd Application [1999] NSWSC 866
Category: Principal judgment
Parties: CSG Limited (Plaintiff)
Fuji Xerox Asia Pacific Pte Ltd (Interested Party)
Representation:
Counsel:
Mr M Oakes SC
Mr R Foreman SC (Interested Party)
Solicitors:
Minter Ellison (Plaintiff)
Corrs Chambers Westgarth (Interested Party)

File Number(s): 2019/335544

Judgment

GLEESON J: Application is made by CSG Limited (CSG) for an order under s 411(4)(b) of the Corporations Act 2001 (Cth) approving a scheme of arrangement between itself and its shareholders. The scheme was described by Black J in his judgment given in relation to the convening of the meeting at the first court hearing: In the matter of CSG Ltd [2019] NSWSC 1905.
The scheme is a transfer scheme. The effect of the scheme, upon implementation, will be that all of the existing shares in CSG will be transferred by force of the scheme to Fuji Xerox Asia Pacific Pte Ltd (Fuji), a Singapore-registered company, so that CSG will become a wholly owned subsidiary of Fuji. Fuji, in turn, has agreed to make payment of the scheme consideration to the several transferors. This and related payment mechanisms and other necessary steps are provided for in an implementation deed between CSG and Fuji.
The meeting was held on 3 February 2019. The resolution agreeing to the scheme was passed by the requisite majorities referred to in s 411(4)(a) of the Corporations Act.…

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 CSG Limited (No 2)

Details

AGLC: In the matter of CSG Limited (No 2) [2020] NSWSC 39
Case: [2020] NSWSC 39
Decision Date: 05 February 2020

CaseChat Overview and Summary

The case of Re CSG Limited (No 2) involved the Court's consideration of a scheme of arrangement involving CSG Limited, which was subject to the Corporations Act 2001 (Cth). The primary dispute centred around the Court's role in approving the scheme under section 411(4)(b) of the Act, specifically focusing on whether direct evidence of conditions precedent relating to regulatory approval was necessary. The matter was heard in the Federal Court of Australia, which was tasked with determining the legality and appropriateness of the scheme under the circumstances presented.

The legal issues that the Court had to resolve included the extent to which the Court should require direct evidence of regulatory approval as a condition precedent for approving the scheme. The central question was whether the Court could rely on indirect evidence or whether it must insist on direct evidence before granting approval. This was particularly pertinent given the potential implications for the parties involved and the regulatory framework within which CSG Limited operated.

The Court addressed these issues by examining the relevant provisions of the Corporations Act and the principles guiding the Court's discretion in approving schemes of arrangement. The Court concluded that while direct evidence is generally preferable, it was not necessary in all cases. Instead, the Court found that indirect evidence could be sufficient if it convincingly demonstrated the likelihood of obtaining the required regulatory approval. This interpretation was guided by the need to balance the interests of the parties involved with the statutory requirements. Consequently, the Court approved the scheme, finding that the indirect evidence provided was adequate to meet the statutory criteria.

The Court's decision was ultimately to approve the scheme of arrangement, based on the sufficiency of the indirect evidence regarding regulatory approval. The Court's reasoning emphasised the importance of a flexible approach in considering the evidence presented, while ensuring that the statutory requirements were met. This decision provided clarity on the expectations for regulatory evidence in similar future cases involving schemes of arrangement.

Orders