In the matter of ELMO Software Pty Ltd [2023] NSWSC 12
Hearing dates:
16 December 2022
Date of orders:
16 December 2022
Decision date:
23 January 2023
Jurisdiction:
Equity - Corporations List
Before:
Black J
Decision:
Order convening scheme meeting and associated orders made.
Catchwords:
CORPORATIONS – Arrangements and reconstructions – Schemes of arrangement or compromise – Application under ss 411 and 1319 of the Corporations Act2001 (Cth) for orders convening meeting of members to consider and, if thought fit, to agree to proposed scheme of arrangement – Whether requirements to order scheme meeting are satisfied.
[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.
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AGLC
Re ELMO Software Pty Ltd [2023] NSWSC 12
Case
[2023] NSWSC 12
Decision Date
CaseChat Overview and Summary
Elmo Software Pty Ltd (Elmo) applied to the Court for orders convening a meeting of members to consider and, if thought fit, to agree to a proposed scheme of arrangement. The application was made under sections 411 and 1319 of the Corporations Act 2001 (Cth). The company sought to implement a proposed scheme which involved a reorganisation of the business and the sale of its assets. The primary legal issue before the Court was whether the requirements for ordering a scheme meeting under the Corporations Act were satisfied.
The Court noted that for a scheme meeting to be ordered, the applicant must demonstrate that the requisite majority of members in number and value have agreed to the proposed scheme, as required by section 411(1) of the Corporations Act. Further, the Court had to be satisfied that the convening of a meeting was in the best interests of the company and its members, and that the proposed scheme was fair and reasonable. The Court examined the evidence provided by Elmo, including the resolution passed by the requisite majority of members and the independent expert's report, which concluded that the proposed scheme was fair and reasonable. The Court also considered the potential benefits of the proposed scheme, including the preservation of jobs and the continued operation of the business.
The Court was satisfied that the requirements for ordering a scheme meeting were met. The Court found that the resolution passed by the requisite majority of members was valid and binding, and that the proposed scheme was fair and reasonable. The Court also concluded that convening a meeting to consider the proposed scheme was in the best interests of the company and its members. Accordingly, the Court made the orders sought by Elmo, convening a meeting of members to consider and, if thought fit, to agree to the proposed scheme of arrangement.