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Re GRD Limited

Re GRD Limited

Case [2009] FCA 1595 16 November 2009

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FEDERAL COURT OF AUSTRALIA
GRD Ltd, In the matter of GRD Ltd [2009] FCA 1595
CORPORATIONS – scheme of arrangement – Court’s approval of compromise – s 411(4) of the Corporations Act 2001 (Cth) – expert report concluded scheme not fair but reasonable – best interests of shareholders – scheme approved.
IN THE MATTER OF GRD LIMITED (ACN 009 201 754)
WAD 158 of 2009
GILMOUR J
16 NOVEMBER 2009
PERTH

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

GENERAL DIVISION

WAD 158 of 2009

IN THE MATTER OF GRD LIMITED (ACN 009 201 754)

BETWEEN:
GRD LIMITED (ACN 009 201 754)
Plaintiff

JUDGE:

GILMOUR J

DATE OF ORDER:

16 NOVEMBER 2009

WHERE MADE:

PERTH

THE COURT ORDERS THAT:
1.The scheme of arrangement between the plaintiff and its members, attached to these orders and marked 'A', and which scheme was agreed to by a resolution of the members of the plaintiff at a meeting of those members on 10 November 2009, be approved pursuant to section 411(4) of the Corporations Act 2001 (Cth) (Act).
2.The plaintiff is exempt from compliance with section 411(11) of the Act.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

The text of entered orders can be located using eSearch on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

GENERAL DIVISION

WAD 158 of 2009

IN THE MATTER OF GRD LIMITED (ACN 009 201 754)

BETWEEN:
GRD LIMITED (ACN 009 201 754)
Plaintiff

JUDGE:

GILMOUR J

DATE:

16 NOVEMBER 2009

PLACE:

PERTH

REASONS FOR JUDGMENT

I made orders on 16 November 2009 approving the proposed scheme of arrangement (Scheme) and exempting the plaintiff, GRD Limited (GRD), from compliance with the provisions of s 411(11) of the Corporations Act 2001 (Cth) (Corporations Act). I indicated then that I would deliver written reasons in due course. These are my reasons.
On 1 October 2009 (the First Court Hearing) the Court granted approval to GRD for the convening of a meeting (Scheme Meeting) to consider the Scheme.
The Scheme, if approved and implemented, will result in GRD becoming a wholly owned subsidiary of AMEC Australia Finance Company Limited (AMEC).
GRD now seeks an order approving of the Scheme pursuant to s 411(4)(b) of the Corporations Act and an order exempting it pursuant to s 411(12) of the Corporations Act from compliance with s 411(11) of the Corporations Act.
The application is supported by the following affidavits:
Affidavits before the Court at the First Hearing on 1 October 2009
(a)Mark Clifford Lawrenson sworn 8 September 2009 (the First Lawrenson Affidavit);
(b)Garrick John Archer sworn 30 September 2009 (the First Archer Affidavit).
Affidavits before the Court since the First Hearing on 1 October 2009
(c)Garrick John Archer sworn 11 November 2009 (the Second Archer Affidavit);
(d)Melissa Stevens sworn 12 November 2009 (the Stevens Affidavit);
(e)Richard Fairfax Court sworn 11 November 2009 (the Chairman's Affidavit);
(f)Mark Clifford Lawrenson sworn 12 November 2009 (the Second Lawrenson Affidavit);
(g)Desmond…

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 GRD Limited

Details

AGLC: Re GRD Limited [2009] FCA 1595
Case: [2009] FCA 1595
Decision Date: 16 NOVEMBER 2009

CaseChat Overview and Summary

The parties involved in this case are GRD Limited, the plaintiff, and its members. The nature of the dispute revolves around a scheme of arrangement that was agreed upon by the members of GRD Limited at a meeting held on 11 November 2009. The court was required to decide on the approval of this scheme and whether the plaintiff should be exempt from compliance with certain provisions of the Corporations Act 2001 (Cth).

The legal issues before the court included whether the scheme of arrangement was fair and equitable to the members of GRD Limited and whether the plaintiff should be exempt from compliance with section 411(11) of the Corporations Act 2001 (Cth). The court needed to determine if the scheme met the statutory requirements for approval under section 411 of the Act and if the exemption from compliance with section 411(11) was warranted.

In delivering the judgment, the court considered the evidence and submissions from both parties. The court found that the scheme of arrangement was fair and equitable to the members and met the statutory requirements for approval. The court also found that the plaintiff should be exempt from compliance with section 411(11) of the Corporations Act 2001 (Cth) as it was in the best interests of the company and its members.

Consequently, the court approved the scheme of arrangement and exempted the plaintiff from compliance with section 411(11) of the Corporations Act 2001 (Cth). These orders were made pursuant to section 411(4) and (11) of the Act, respectively. The court's decision was based on the fairness of the scheme to the members and the overall benefit to the company and its members.

Orders

Orders of the court

1. The scheme of arrangement between the plaintiff and its members, attached to these orders and marked 'A', and which scheme was agreed to by a resolution of the members of the plaintiff at a meeting of those members on 10 November 2009, be approved pursuant to section 411(4) of the Corporations Act 2001 (Cth) (Act).

2. The plaintiff is exempt from compliance with section 411(11) of the Act.

Note:

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

GILMOUR J

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: GILMOUR J

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Citations

AGLC Citation

Re GRD Limited [2009] FCA 1595

Most Recent Citation

Re Cytopia (No. 2) [2010] VSC 4

Cases citing this decision · 10 of 10 shown

Re Security Matters Limited (No 3)
[2023] FCA 140 Para 23

…ch the court has approved schemes of arrangement that were found by an independent expert to be not fair but reasonable: See In the matter of GRD Ltd [2009] FCA 1595 and Re Cytopia Ltd (No 2) [2010] VSC 4. In approving the scheme of arrangement in Re Cytopia Croft J noted that the size of the majority in favour of…
Re Prime Media Group Ltd
[2019] NSWSC 1805 Para 20

…6; Re Bulletproof Group Limited [2018] FCA 497. Courts have also frequently approved a scheme of arrangement in those circumstances: Re GRD Ltd [2009] FCA 1595; Re Cytopia Ltd (No 2) [2010] VSC 4; Re CIC Australia Ltd (No 2) [2015] NSWSC 1314; Re Blackgold International Holdings Limited (No 2) [2017] FCA 772; Re B…
Re Beadell Resources Ltd
[2018] WASC 410 Para 3

…luded that the scheme was reasonable though not fair.[17] [17] See eg Re Coles Group Ltd [2007] VSC 389; (2007) 25 ACLC 1,380 [77] - [79]; Re GRD Ltd [2009] FCA 1595 [28] - [31]; Re Cytopia Ltd [5] - [9]; Re Cytopia Ltd (No 2) [2010] VSC 4 [15] - [18]; Re Rift Valley Resources Ltd [2012] FCA 952 [7]; Re Westgold R…
Re CIC Australia Ltd
[2015] NSWSC 557 Para 9

…schemes when the independent expert has concluded that the scheme was reasonable though not fair [see, for example, GRD Ltd, In the matter of GRD Ltd [2009] FCA 1595, [28]-[32]; Re Cytopia Ltd [2009] VSC 560, [5]-[9]]. The distinction to which I have referred between “fairness" and "reasonableness" reflects ASIC R…
Re Westgold Resources Ltd (No 2)
[2012] WASC 395 Para 6

…ch the court has approved schemes of arrangement that were found by an independent expert to be not fair but reasonable: See In the matter of GRD Ltd [2009] FCA 1595 and Re Cytopia Ltd (No 2) [2010] VSC 4. In approving the scheme of arrangement in Re Cytopia Croft J noted that the size of the majority in favour of…
Re Cellestis Limited (No. 3)
[2011] VSC 493 Para 1

…eported, Judd J, 3 December 2009) [23] – [24]; Re Cytopia (No. 2) [2010] VSC 4 (Unreported, Croft J, 15 January 2010) [19] – [20]; Re GRD Limited [2009] FCA 1595 (Unreported, Gilmour J, 24 December 2009) [36] – [38].…
Re Plantic Technologies Ltd (No. 2)
[2010] VSC 554 Para 1

…eported, Judd J, 3 December 2009) [23] – [24]; Re Cytopia (No. 2) [2010] VSC 4 (Unreported, Croft J, 15 January 2010) [19] – [20]; Re GRD Limited [2009] FCA 1595 (Unreported, Gilmour J, 24 December 2009) [36] – [38].…
Re Mitchell Communication Group (No. 2)
[2010] VSC 534 Para 1

…orted, Judd J, 3 December 2009) [23] – [24]; Re Cytopia (No. 2) [2010] VSC 4 (Unreported, Croft J, 15 January 2010) [19] – [20]; Re GRD Limited [2009] FCA 1595 (Unreported, Gilmour J, 24 December 2009) [36] – [38].…
Re Healthscope Limited (No. 2)
[2010] VSC 440 Para 1

…eported, Judd J, 3 December 2009) [23] – [24]; Re Cytopia (No. 2) [2010] VSC 4 (Unreported, Croft J, 15 January 2010) [19] – [20]; Re GRD Limited [2009] FCA 1595 (Unreported, Gilmour J, 24 December 2009) [36] – [38].…
Re Cytopia Ltd (No 2)
[2010] VSC 4 Para 1

…report that Gilmour J[18] approached the matter in a similar way to Davies J[19] in this case. [16]See [2007] VSC 389 at paragraph [77]-[79]. [17][2009] FCA 1595. [18]See [28]-[31]. [19]See [5]-[9] of the Reasons.…

View all 10 citing cases →

Cases cited in this decision · 8 of 8 shown

Zenyth Therapeutics Ltd v Smith
[2006] VSC 436 Para 30

…The Court at the First Court Hearing was referred to the decision of Dodds-Streeton J in Zenyth Therapeutics Ltd v Smith (2006) 60 ACSR 548 and, in particular, at [109] - [114]: 109 In Re Rancoo Ltd , Hayne J referred to ASIC Policy Statement 75 and expressed reservations about the attribution of different meanings t…
Re Kalgoorlie Lake View Pty Ltd
[2005] FCA 1440 Para 21

…more recently been confirmed in Re NRMA Ltd (2000) 156 FLR 412 at [21]-[24], Re Hudson Conway Ltd (2000) 33 ACSR 657: Re Kalgoorlie Lake View Pty Ltd (2005) 56 ACSR 144.…
Re Glencore Nickel Pty Ltd
[2003] WASC 18 Para 5

…) have been made in a number of cases, including Re Hudson Conway Ltd 33 ACSR 657 at 668, Re Amcor Ltd 34 ACSR 199 at 209, Re Glencore Nickel Pty Ltd (2003) 44 ACSR 210 at 225 and Re Anaconda Nickel Holdings Pty Ltd (2003) 44 ACSR 229 at 240.…
Re Anaconda Nickel Holdings Pty Ltd
[2003] WASC 19 Para 5

…Ltd 33 ACSR 657 at 668, Re Amcor Ltd 34 ACSR 199 at 209, Re Glencore Nickel Pty Ltd (2003) 44 ACSR 210 at 225 and Re Anaconda Nickel Holdings Pty Ltd (2003) 44 ACSR 229 at 240.…
Re Timor Sea Petroleum NL
[2000] VSC 337 Para 23

…Apposite also is the observation of Warren J in Re Timor Sea Petroleum NL (2000) 35 ACSR 186 at [37]: The principle applied on an application for approval of a scheme to which no objection has been made is that if the court is satisfied that there has been an absence of oppression and that the relevant scheme is one…
Re NRMA Ltd (No 2)
[2000] NSWSC 408 Para 21

…d power: Re Alabama, New Orleans, Texas & Pacific Junction Railway Company [1891] 1 Ch 213 at 243. It has more recently been confirmed in Re NRMA Ltd (2000) 156 FLR 412 at [21]-[24], Re Hudson Conway Ltd (2000) 33 ACSR 657: Re Kalgoorlie Lake View Pty Ltd (2005) 56 ACSR 144.…
In re Hudson Conway Ltd
[2000] VSC 21 Para 5

…Orders under s 411(12) have been made in a number of cases, including Re Hudson Conway Ltd 33 ACSR 657 at 668, Re Amcor Ltd 34 ACSR 199 at 209, Re Glencore Nickel Pty Ltd (2003) 44 ACSR 210 at 225 and Re Anaconda Nickel Holdings Pty Ltd (2003) 44 ACSR 229 at 240.…
[1949] AC 462
[1949] AC 462 Para 22

…t is one which is capable of being accepted: see Re Dorman Long & Co Ltd [1934] Ch 635; Scottish Insurance Corp Ltd v Wilsons and Clyde Coal Co Ltd [1949] AC 462 at 486. [23] When it comes to appraising the fairness of a scheme, the Court does not determine that the scheme is intrinsically in the members' intere…

Legislation cited in this decision · 1

Corporations Act 2001 (Cth)
1 mention (from Para 1)

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION	WAD 158 of 2009

JUDGE:	GILMOUR J
DATE OF ORDER:	16 NOVEMBER 2009
WHERE MADE:	PERTH

JUDGE:	GILMOUR J
DATE:	16 NOVEMBER 2009
PLACE:	PERTH