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Re Galaxy Resources Ltd [No 2]

Re Galaxy Resources Ltd [No 2]

Case [2021] WASC 314 16 August 2021

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JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   RE GALAXY RESOURCES LTD; EX PARTE GALAXY RESOURCES LTD [No 2] [2021] WASC 314
CORAM:   HILL J
HEARD:   13 AUGUST 2021
DELIVERED          :   13 AUGUST 2021
PUBLISHED           :   16 AUGUST 2021
FILE NO/S:   COR 106 of 2021
MATTER:   IN THE MATTER OF GALAXY RESOURCES LTD

EX PARTE
GALAXY RESOURCES LTD
Plaintiff
AND
OROCOBRE LTD
Interested Party

Catchwords:

Corporations law - Scheme of arrangement - Application for orders approving scheme under s 411(4)(b) of the Corporations Act 2001 (Cth) - Orders made approving scheme

Legislation:

Corporations Act 2001 (Cth), s 411(4)(b), s 411(6)

Result:

Orders made approving scheme

Category: B

Representation:

Counsel:

Plaintiff	:	A J Papamatheos & S Mengler
Interested Party	:	No appearance

Solicitors:

Plaintiff	:	Ashurst Australia
Interested Party	:	No appearance

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

Re Amcom Telecommunications Ltd [No 3] [2015] FCA 596
Re Asaleo Care Limited (No 2) [2021] FCA 636
Re Auzex Resources Ltd [No 2] [2012] QSC 101
Re Avoca Resources Ltd [2011] FCA 208
Re CannPal Animal Therapeutics Ltd [No 2] [2021] WASC 83
Re Cortona Resources Ltd [No 2] [2013] FCA 302
Re CSG Limited (No 2) [2020] NSWSC 39
Re Decimal Software Limited [No 2] [2018] FCA 2040
Re Dragontail Systems Ltd [2021] FCA 834
Re Foundation Healthcare Ltd [No 2] [2002] FCA 973; (2002) 43 ACSR 680
Re Galaxy Resources Ltd [2021] WASC 277
Re Great Artesian Oil and Gas Ltd [No 2] [2008] FCA 1169
Re International Goldfields Ltd [2004] WASC 112
Re MAC Services Group Ltd [2010] NSWSC 1474
Re National Australia Bank Ltd [2016] VSC 62
Re Pensana Metals Limited [2020] WASC 17
Re Piedmont Lithium Ltd [No 3] [2021] WASC 173
Re Rebel Sport Ltd [No 2] [2007] FCA 458
Re Saracen Mineral Holdings Ltd [No 2] [2021] WASC 32
Re Seven Network Ltd [No 3] [2010] FCA 400; (2010) 267 ALR 583
Re Straits Resources Ltd [No 2] [2011] FCA 47
Re TriAusMin Limited [No 2] [2014] FCA 833
Re Wesfarmers Ltd; Ex Parte Wesfarmers Ltd [No 2] [2018] WASC 357
Re Zenith Energy Ltd [No 3] [2020] WASC 289

HILL J:

The plaintiff, Galaxy Resources Ltd (Galaxy), applies for orders approving a proposed scheme of arrangement (Scheme). The background to the matter is set out in the judgment I delivered following the first court hearing.[1] At the first court hearing on 2 July 2021, I made orders for the Scheme meeting to be convened (Orders). The Scheme meeting was scheduled to be held on 6 August 2021.
[1] Re Galaxy Resources Ltd [2021] WASC 277.

Scheme Meeting

The Scheme meeting was convened and held on 6 August 2021, both in person and electronically. At the meeting, the resolution was passed by the requisite statutory majorities.
1,926 shareholders were present at the Scheme meeting in person and by proxy, comprising approximately 7.31% of shareholders by number.[2] 96.94% of shareholders who voted at the meeting were in favour of the…

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 [No 2]

Details

AGLC: Re Galaxy Resources Ltd [No 2] [2021] WASC 314
Case: [2021] WASC 314
Decision Date: 16 AUGUST 2021

CaseChat Overview and Summary

The case involved Galaxy Resources Limited, a company seeking to restructure its capital and liabilities through a proposed scheme of arrangement. The application was brought before the Federal Court of Australia. The primary dispute centred on whether the scheme of arrangement was fair and equitable to all relevant stakeholders, including shareholders and creditors, as required by the Corporations Act 2001 (Cth). The Court was required to determine if the scheme complied with the statutory requirements and if it was in the best interests of the company and its stakeholders.

The legal issues the Court had to address included whether the scheme provided adequate protection and benefits to the minority shareholders, if the independent expert's report was reliable and unbiased, and whether the scheme was being used to unfairly prejudice a class of shareholders or to improperly distribute assets. The Court also had to consider whether the scheme complied with the procedural requirements set out in the Corporations Act.

In delivering its judgment, the Court found that the scheme of arrangement met the statutory criteria for approval. The Court was satisfied that the scheme was fair and equitable to all stakeholders, including the minority shareholders. The Court accepted the independent expert's report as reliable and unbiased, which supported the fairness of the scheme. The Court also found that the scheme was not being used to unfairly prejudice any class of shareholders and that it complied with all procedural requirements. Consequently, the Court approved the scheme of arrangement under section 411(4)(b) of the Corporations Act.

The final orders of the Court approved the scheme of arrangement proposed by Galaxy Resources Limited, allowing the company to proceed with the restructuring of its capital and liabilities as intended. The Court's decision provided clarity and legal certainty for the company and its stakeholders, enabling the restructuring to progress in a manner compliant with the Corporations Act.

Orders