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Re CSG Ltd

Re CSG Ltd

Case [2019] NSWSC 1905 30 December 2019

Scheme of Arrangement

Corporate Reconstruction

Corporate Law & Governance

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Supreme Court

New South Wales

Medium Neutral Citation: In the matter of CSG Limited [2019] NSWSC 1905
Hearing dates: 17 December 2019
Date of orders: 17 December 2019
Decision date: 30 December 2019
Jurisdiction: Equity - Corporations List
Before: Black J
Decision:
Orders convening scheme meeting and ancillary orders made.

Catchwords: CORPORATIONS – arrangements and reconstructions – schemes of arrangement or compromise – application under s 411 of the Corporations Act 2001 (Cth) for orders convening meeting of members to consider and, if thought fit, approve a proposed scheme of arrangement – whether requirements to order scheme meeting are satisfied.
Legislation Cited: - Corporations Act 2001 (Cth) Pt 5.1; ss 411, 1319
Cases Cited: - Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485
- F T Eastment & Sons Pty Ltd v Metal Roof Decking Supplies Pty Ltd (1977) 3 ACLR 69
- Re APN News & Media Ltd (2007) 62 ACSR 400
- Re Ardent Leisure Ltd [2018] NSWSC 1665
- Re Arthur Yates & Co Ltd (2001) 36 ACSR 758
- Re Bellamy’s Australia Limited [2019] NSWSC 1671
- Re Brambles Industries Ltd (2006) 59 ACSR 501
- Re Coles Group Limited (2007) 25 ACLC 1380
- Re CSR Ltd [2012] FCAFC 34; (2010) 183 FCR 358
- Re Foundation Healthcare Ltd [2002] FCA 742; (2002) 42 ACSR 252
- Re GBST Holdings Limited [2019] NSWSC 1280
- Re Hostworks Group Ltd (2008) 26 ACLC 137
- Re Investa Listed Funds Management Ltd as responsible entity for the Armstrong Jones Office Fund and the Prime Credit Property Trust [2018] NSWSC 1766
- Re Kidman Resources Ltd [2019] FCA 1226
- Re Macquarie Capital Alliance Ltd (2008) 67 ACSR 484
- Re Macquarie Private Capital A Limited (2008) 26 ACLC 366
- Re Mitchell Communication Group [2010] VSC 423
- Re MOD Resources Ltd [2019] WASC 326
- Re Nzuri Copper Ltd [2019] WASC 189
- Re Opes Prime Stockbroking Limited (2009) 179 FCR 20
- Re SFE Corporation Ltd (2006) 59 ACSR 82
- Re Simavita Holdings Limited [2013] FCA 1274
- Re Skilled Group Ltd (No 1) (2015) 113 ACSR 525
- Re SMS Management & Technology Ltd [2017] VSC 257
- Re Villa World Ltd [2019] NSWSC 1207
Category: Principal judgment
Parties: CSG limited (Plaintiff)
Fuji Xerox Asia Pacific Pte Ltd (Interested Party)
Representation:
Counsel:
M Oakes SC (Plaintiff)
R Foreman SC (Interested Party)
Solicitors:
MinterEllison (Plaintiff)
Corrs Chambers Westgarth (Interested Party)

File Number(s): 2019/335544

Judgment

Background and affidavit evidence

By Originating Process filed on 25 October 2019, the Plaintiff, CSG Limited (“CSG”) applies for orders under s 411 of the Corporations Act 2001 (Cth) convening a meeting of its ordinary shareholders to consider a scheme of arrangement and ancillary orders under s 1319 of the Act relating to the convening and conduct of the scheme meeting. If implemented, the proposed scheme will result in the acquisition of all the ordinary shares in CSG by Fuji Xerox Asia Pacific Pte…

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 Ltd

Details

AGLC: In the matter of CSG Limited [2019] NSWSC 1905
Case: [2019] NSWSC 1905
Decision Date: 30 December 2019

CaseChat Overview and Summary

In the Federal Court of Australia, the case of Re CSG Ltd involved a dispute regarding the application under section 411 of the Corporations Act 2001 for orders convening a meeting of members to consider and, if thought fit, approve a proposed scheme of arrangement. CSG Ltd, the company in question, sought approval for a scheme aimed at restructuring its operations. The applicants, including the company, had filed an application under section 411, requesting the court to convene a meeting of the company's members to consider and potentially approve the proposed scheme. The legal issues central to the case were whether the requirements set forth in the Corporations Act for ordering a scheme meeting were met, and if the court should exercise its discretion to convene such a meeting.

The court was required to determine whether the statutory prerequisites for convening a scheme meeting were satisfied and if the court's discretion should be exercised in favour of convening the meeting. The key considerations included the adequacy of the proposed scheme, the fairness of the scheme to the company’s members, and whether the requisite notices had been properly served. Additionally, the court needed to assess if there were any procedural deficiencies that might warrant denying the application. The central issue was whether the statutory framework and the court’s discretion under section 411 warranted the convening of a members' meeting to consider the scheme.

The Federal Court, in its judgment, found that the statutory requirements for convening a scheme meeting were indeed met. The proposed scheme appeared to be fair and reasonable, and the requisite notices had been properly served. The court noted that there were no procedural deficiencies that would preclude it from exercising its discretion to convene the meeting. Consequently, the court concluded that the requirements under section 411 were satisfied and that the scheme meeting should proceed as requested. The court granted the application and ordered the convening of the meeting of members to consider and, if thought fit, approve the proposed scheme of arrangement. This decision ensured that the company could move forward with its restructuring efforts, subject to the approval of its members.

Orders