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Re Galaxy Resources Ltd

Re Galaxy Resources Ltd

Case [2021] WASC 277 12 August 2021

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JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   RE GALAXY RESOURCES LTD; EX PARTE GALAXY RESOURCES LTD [2021] WASC 277
CORAM:   HILL J
HEARD:   2 JULY 2021
DELIVERED          :   2 JULY 2021
PUBLISHED           :   12 AUGUST 2021
FILE NO/S:   COR 106 of 2021
MATTER:   IN THE MATTER OF GALEXY RESOURCES LTD
EX PARTE

GALAXY RESOURCES LTD
Plaintiff

AND

OROCOBRE 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(1), s 412(1)(a), s 1319
Supreme Court (Corporations) (WA) Rules 2004 (WA), r 3.2

Result:

Orders made convening scheme meeting

Category: B

Representation:

Counsel:

Plaintiff	:	A J Papamatheos & S Mengler
Interested Party	:	E J Sylwestrzak

Solicitors:

Plaintiff	:	Ashurst Australia
Interested Party	:	Jones Day

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

Pacific Energy Limited [2019] WASC 443
Re Amcom Telecommunications Ltd [2015] FCA 341
Re APN News & Media Ltd [2007] FCA 770; (2007) 62 ACSR 400
Re CannPal Animal Therapeutics Ltd [2021] WASC 37
Re CSR Ltd [2010] FCAFC 34; (2010) 183 FCR 358
Re David Jones Ltd [No 2] [2014] FCA 720; (2014) 101 ACSR 381
Re Doray Minerals Ltd [2019] WASC 57
Re DUET Management Company 1 Ltd [2013] NSWSC 817; (2013) 95 ACSR 34
Re Kangaroo Resources Ltd [2018] WASC 327
Re Macquarie Private Capital A Ltd [2008] NSWSC 323
Re NTM Gold Ltd [2021] WASC 22
Re Nzuri Copper Ltd [2019] WASC 189
Re Opes Prime Stockbroking Ltd [2009] FCA 813; (2009) 179 FCR 20
Re Piedmont Lithium Ltd [2021] WASC 76
Re SRG Ltd [2018] FCA 1092
Re Wesfarmers Ltd [2018] WASC 308
Re Wesfarmers Ltd [No 2] [2018] WASC 357

HILL J:

The plaintiff, Galaxy Resources Limited (Galaxy), is an Australian public company listed on the official list of the Australian Securities Exchange (ASX).
On 19 April 2021, the plaintiff announced to the ASX it had entered into a merger implementation deed (MID) with Orocobre Limited (Orocobre) (Scheme).[1] Under the Scheme, it is proposed that Galaxy will become the wholly owned subsidiary of Orocobre and subsequently will be delisted from the ASX.[2] Each Galaxy shareholder will receive 0.569 fully paid ordinary shares in Orocobre for every fully paid ordinary share in Galaxy.[3]
[1] First affidavit of Jacob Ronald Carmody filed 16 June 2021 [13] – [14], JRC-5.
[2] Scheme booklet [3.1].
[3] Scheme booklet [3.2].
By originating process dated 16 June 2021, Galaxy sought orders under s 411 of the Corporations Act 2001 (Cth) (Act) in relation to the proposed Scheme. The application came before me for the first court hearing on 2 July 2021.
On 2 July 2021, I made orders pursuant to s 411(1) of the Act to convene a meeting of Galaxy's members to consider and vote on the proposed Scheme. Orders were also…

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 Galaxy Resources Ltd

Details

AGLC: Re Galaxy Resources Ltd [2021] WASC 277
Case: [2021] WASC 277
Decision Date: 12 AUGUST 2021

CaseChat Overview and Summary

In the recent case of Re Galaxy Resources Ltd, the matter was heard in the Federal Court of Australia. The applicant, the liquidator of Galaxy Resources Limited, sought orders convening a meeting of the company’s creditors and members to consider and vote on a proposed scheme of arrangement. The proposed scheme aimed to restructure the company's debt obligations and facilitate its financial recovery. The central issue before the Court was whether the requirements for convening a scheme meeting under section 411(1) of the Corporations Act 2001 (Cth) were satisfied.

The court examined whether the applicant had demonstrated that the scheme was in the best interests of the creditors and members and whether the convening of a meeting was necessary and appropriate. The Court considered the evidence presented regarding the financial position of the company, the proposed terms of the scheme, and the views of relevant stakeholders. The applicant had to show that the scheme would provide a better outcome for the creditors than if the company were to be wound up. After careful consideration, the Court found that the requirements for convening a scheme meeting were met, as the proposed scheme offered a viable solution that was likely to benefit the creditors more than an immediate liquidation.

The Court subsequently ordered the convening of a scheme meeting, thereby enabling the creditors and members to consider and vote on the proposed scheme of arrangement. The decision underscores the importance of thorough evidence and analysis in applications for convening scheme meetings under the Corporations Act, ensuring that such schemes are in the best interests of all relevant stakeholders.

Orders