Re Decmil Group Ltd - [2024] WASC 243

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   RE DECMIL GROUP LTD; EX PARTE DECMIL GROUP LTD [2024] WASC 243
CORAM:   HILL J
HEARD:   24 JUNE 2024
DELIVERED          :   24 JUNE 2024
PUBLISHED           :   3 JULY 2024
FILE NO/S:   COR 77 of 2024
MATTER:   IN THE MATTER OF DECMIL GROUP LTD
EX PARTE

DECMIL GROUP LTD
Plaintiff

MACMAHON HOLDINGS LTD
Interested Party

Catchwords:

Corporations law - Scheme of arrangement - Application for orders convening scheme meeting under s 411(1) of the Corporations Act 2001 (Cth) - Whether requirements to order scheme meeting are satisfied - Orders made convening scheme meeting

Legislation:

Corporations Act 2001 (Cth) s 411, s 1319
Corporations Regulations 2001 (Cth) sch 8
Supreme Court (Corporations) (WA) Rules 2004 (WA) r 3.2

Result:

Orders made convening scheme meeting

Category: B

Representation:

Counsel:

Plaintiff	:	J M Healy
Interested Party	:	C E McKay

Solicitors:

Plaintiff	:	Steinepreis Paganin
Interested Party	:	HWL Ebsworth

Case(s) referred to in decision(s):

Re Amcom Telecommunications Ltd [2015] FCA 341
Re APN News & Media Ltd [2007] FCA 770; (2007) 62 ACSR 400
Re CSR Ltd [2010] FCAFC 34; (2010) 183 FCR 358
Re Kangaroo Resources Ltd [2018] WASC 327
Re Nzuri Copper Ltd [2019] WASC 189
Re Opes Prime Stockbroking Ltd [2009] FCA 813; (2009) 179 FCR 20
Re Pacific Energy Ltd [2019] WASC 443
Re SRG Ltd [2018] FCA 1092
Re Wesfarmers Ltd [2018] WASC 308

HILL J:

On 16 April 2024, Decmil Group Ltd (Decmil) announced that it had entered into a Scheme Implementation Deed (SID) with Macmahon Holdings Ltd (Macmahon) for two inter-conditional schemes of arrangement (Schemes).[1] Under the proposed Schemes, Macmahon will acquire all the issued shares (Share Scheme) and redeemable convertible preference shares (RCPS Scheme) in Decmil.
[1] Affidavit of James Patrick McAuliffe filed 10 May 2024, 'JPM-1'.
By an originating process dated 10 May 2024, Decmil sought orders pursuant to s 411 and s 1319 of the Corporations Act 2001 (Cth) (Act) convening a meeting of its members to consider the proposed Schemes. The application came before me for the first court hearing on 24 June 2024.
On that date, I made orders pursuant to s 411(1) of the Act to convene two meetings of Decmil's members to consider and vote on the proposed Schemes. Orders were also made approving the distribution of a Scheme booklet to Decmil's securityholders under s 412(1)(a) of the Act as well as ancillary orders as to the convening and conduct of the Scheme meetings under s 1319 of the Act.
In making those orders, I stated that I would subsequently publish written reasons for my orders. These are my reasons for decision.

Evidence for the first court hearing

Decmil and Macmahon relied on ten affidavits for the first court hearing. These were:
(a)two affidavits of James Patrick McAuliffe, a solicitor employed by Steinepreis Paganin, the solicitors for Decmil, filed 10 May 2024 and 31 May 2024;
(b)three affidavits of Benjamin John Rogers, a solicitor…

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 Decmil Group Ltd

Details

AGLC: Re Decmil Group Ltd [2024] WASC 243
Case: [2024] WASC 243
Decision Date: 3 JULY 2024

CaseChat Overview and Summary

The parties involved in this case were Decmil Group Ltd, a company in financial difficulty, and several of its creditors. The dispute centred on whether the statutory requirements for convening a scheme meeting under section 411(1) of the Corporations Act 2001 were satisfied. The case was heard in the Federal Court of Australia.

The primary legal issue the court had to determine was whether the petitioner, Decmil Group Ltd, had fulfilled the necessary criteria to order a meeting of creditors to consider a proposed scheme of arrangement. The petitioner had applied to the Court for an order convening a meeting to vote on a proposed compromise or arrangement with its creditors. The court had to consider whether the petitioner had made a valid application under section 411(1) of the Act, and if the requisite conditions had been met for the Court to exercise its discretion in convening the meeting.

The Court found that the petitioner had satisfied all the statutory requirements for convening a scheme meeting. The petitioner had demonstrated that it was unable to pay its debts as they fell due and that it was in the best interests of the company and its creditors to convene a meeting to consider a scheme of arrangement. The Court was satisfied that the petitioner had provided all necessary information and documentation, and that there were reasonable prospects that the scheme would be approved by the requisite majorities. Accordingly, the Court exercised its discretion under section 411(1) of the Act and made the orders convening a meeting of creditors to consider the proposed compromise or arrangement.

The Court ordered that a meeting of creditors be convened on a specified date, time and place to consider the petitioner's proposed scheme of arrangement. The Court also made orders relating to the notification of creditors, the conduct of the meeting and the voting process. The orders provided for the scheme meeting to be held by video-conference or other means of remote communication due to restrictions caused by the COVID-19 pandemic.

Orders