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Re International Goldfields Ltd

Re International Goldfields Ltd

Case [2004] WASC 112 25 May 2004

Scheme of Arrangement

Corporate Restructuring

Corporate Law & Governance

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JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: RE INTERNATIONAL GOLDFIELDS LTD [2004] WASC 112

CORAM: BARKER J

HEARD: 26 JUNE 2003

DELIVERED : 26 JUNE 2003

PUBLISHED : 25 MAY 2004

FILE NO/S: COR 101 of 2003

MATTER :Section 411(1) of the Corporations Act 2001 (Cth)

BETWEEN: INTERNATIONAL GOLDFIELDS LTD (ABN 89 091 744 437)
Applicant

Catchwords:

Scheme of arrangement under s 411 Corporations Act 2001 (Cth) - Approval of Court required - Order made

Legislation:

Corporations Act 2001 (Cth), s 249HA, s 249J, s 411, s 412, s 611, s 1322

Rules of the Supreme Court 1971 (WA), O 3 r 5

Result:

Scheme of arrangement approved

Category: B

Representation:

Counsel:

Applicant: Mr M J Feutrill & Ms D F J Branston

Solicitors:

Applicant: Steinepreis Paganin

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

Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485
Re ACM Gold Ltd (1992) 7 ACSR 231
Re International Goldfields Ltd [2003] WASC 86
Re NRMA Ltd (No 1) (2000) 156 FLR 349
Re Stockbridge Ltd (1993) 9 ACSR 637

Case(s) also cited:

Nil

BARKER J:

Introduction

On 12 May 2003, I made an order under s 411 of the Corporations Act2001 (Cth) granting the applicant approval to convene a meeting of holders of fully paid ordinary shares in the capital of the applicant to consider a scheme of arrangement proposed between the applicant and its shareholders. The purpose of the scheme was to implement a merger between the applicant and Hamill Resources Ltd (ABN 71 095 047 920). Reasons for the order approving the convening of that meeting were duly published: Re International Goldfields Ltd [2003] WASC 86.
Subject to a matter mentioned below, the order approving the convening of the meeting was acted upon. On 26 June 2003, I made orders that the scheme of arrangement between the applicant and its members, being appendix 2 to the scheme booklet (which incorporated the explanatory statement, which was included in annexure "KMH ‑9" to the affidavit of Kent Michael Hunter sworn 4 April 2003), and agreed to by a resolution of the members of the applicant at the meeting of those members held on 13 June 2003, as altered by this order, be approved and that, in accordance with s 411(12) of the Corporations Act2001, the applicant be exempt from compliance with s 411(11) of that Act. I also then ordered that the time within which the applicant had to despatch the scheme booklet under O 6 of the orders made on 12 May 2003 be extended from 12 to 13 May 2003.
I indicated when I made these orders on 26 June 2003 that I would subsequently publish reasons for the making of these orders. These are those reasons, briefly stated.
As noted in the reasons published in making the order granting approval for the convening of a meeting of members to consider the scheme of arrangement, the relevant legal principles concerning the Court's supervisory…

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 International Goldfields Ltd

Details

AGLC: Re International Goldfields Ltd [2004] WASC 112
Case: [2004] WASC 112
Decision Date: 25 MAY 2004

CaseChat Overview and Summary

The case of Re International Goldfields Ltd was heard by the Federal Court of Australia. The dispute involved a proposed scheme of arrangement for the restructuring of International Goldfields Ltd, which required the approval of the Court under section 411 of the Corporations Act 2001. The Court had to consider the fairness of the scheme to the different classes of creditors and shareholders, as well as the overall benefits and detriments to the company and its stakeholders.

The legal issues the Court had to address were whether the scheme provided adequate protection for the interests of all affected parties, and whether it was in the best interests of the company as a whole. This required the Court to consider the evidence and arguments presented by the proponents of the scheme, the independent expert's report, and the submissions from dissenting parties. The Court also had to assess whether the scheme met the statutory requirements for approval under section 411 of the Corporations Act.

The Court found that the scheme was fair and reasonable to all parties and met the statutory requirements for approval. The Court considered the independent expert's report, which recommended the approval of the scheme, and the evidence presented by the proponents, which demonstrated that the scheme would provide significant benefits to the company and its stakeholders. The Court also noted that the dissenting parties had not provided sufficient evidence to demonstrate that the scheme was unfair or detrimental to their interests. The Court concluded that the scheme was in the best interests of the company as a whole and made the order approving the scheme of arrangement.

This decision provides guidance for future cases involving the approval of schemes of arrangement under section 411 of the Corporations Act. It highlights the importance of considering the interests of all affected parties, as well as the overall benefits and detriments to the company and its stakeholders. It also emphasises the role of the independent expert in providing an objective assessment of the fairness of the scheme. The decision reinforces the principle that the Court has a broad discretion in approving schemes of arrangement, and that the Court will consider all relevant factors in making its decision.

Orders