Re Kangaroo Resources Ltd; Ex Parte Kangaroo Resources Ltd [No 2] - [2018] WASC 388

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   RE KANGAROO RESOURCES LTD; EX PARTE KANGAROO RESOURCES LTD [No 2] [2018] WASC 388
CORAM:   VAUGHAN J
HEARD:   3 DECEMBER 2018
DELIVERED          :   3 DECEMBER 2018
PUBLISHED           :   11 DECEMBER 2018
FILE NO/S:   COR 171 of 2018

EX PARTE
KANGAROO RESOURCES LTD
Plaintiff

Catchwords:

Corporations law - Scheme of arrangement - Proposed cash acquisition - Application for orders approving scheme under s 411(b) of the Corporations Act 2001 (Cth)

Legislation:

Corporations Act 2001 (Cth), s 411, s 412

Result:

Application granted

Category: B

Representation:

Counsel:

Plaintiff	:	A J Papamatheos
Interested Party (PT Bayan Resources Tbk)	:	S K Dharmanada SC

Solicitors:

Plaintiff	:	Hopgood Ganim Lawyers (Perth)
Interested Party (PT Bayan Resources Tbk)	:	Allens (Perth)

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

BCBC Singapore PTE Ltd v PT Bayan Resources TBK [No 4] [2018] WASC 338
Re EcoBiotics Ltd [No 2] [2017] FCA 1031
Re Investor Info Ltd [2005] FCA 1848; (2005) 24 ACLC 44
Re Kangaroo Resources Ltd; Ex parte Kangaroo Resources Ltd [2018] WASC 327
Re Prime Infrastructure Holdings Ltd [2010] NSWSC 1337
Re TriAusMin Ltd [No 2] [2014] FCA 833
Re Wesfarmers Ltd; Ex parte Wesfarmers Ltd [No 2] [2018] WASC 357

VAUGHAN J:

(These reasons were delivered orally at the conclusion of the hearing. They have been edited to correct matters of grammar and infelicity of expression. Authorities and other references have also been footnoted rather than appearing in the body of the reasons.)

Overview

On 16 October 2018 I made orders pursuant to s 411(1) of the Corporations Act 2001 (Cth) to convene a meeting of the holders of ordinary shares in Kangaroo Resources Ltd (Kangaroo) other than its majority shareholder PT Bayan Resources Tbk (PT Bayan). The meeting was convened to consider a proposed scheme of arrangement. I also made orders approving distribution of a scheme booklet.
PT Bayan holds some 56.05% of Kangaroo’s ordinary shares. The proposed scheme of arrangement provides for PT Bayan to acquire the remainder of the ordinary shares for a consideration of $0.15 per share.
The scheme meeting was held on 26 November 2018. Kangaroo's members (other than PT Bayan) approved the scheme of arrangement by 99.9% of votes cast and 98.58% of members present in person or by proxy.
This morning’s application is made pursuant to s 411(4)(b) of the Act for orders approving the scheme. I will make orders approving the proposed scheme of arrangement with minor alterations. These are my reasons for those orders.

Background and additional evidence

Incorporation of earlier reasons

I gave reasons for my 16 October 2018 orders in Re Kangaroo Resources Ltd; Ex parte Kangaroo Resources Ltd.[1]
[1] Re Kangaroo Resources Ltd; Ex parte Kangaroo Resources Ltd [2018] WASC 327.
I do not intend to repeat what was said in those reasons. These reasons should be read with and as if they incorporated the earlier reasons. In particular, I rely on what was stated in the earlier reasons…

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.

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Details

Case: [2018] WASC 388
Decision Date: 11 DECEMBER 2018

CaseChat Overview and Summary

Kangaroo Resources Ltd applied to the Federal Court for orders approving a proposed scheme of arrangement involving a cash acquisition. The scheme involved the company's restructuring through a court-approved process, under section 411(b) of the Corporations Act 2001 (Cth). The primary issue before the court was whether the scheme was fair and reasonable to the company's creditors and members. The court also needed to determine if the scheme complied with the statutory requirements of the Corporations Act.

The court examined whether the scheme provided adequate protection to the company's creditors and members, ensuring their interests were fairly represented. The judge considered the benefits of the scheme to the company as a whole and whether the proposed acquisition would provide value for the company's stakeholders. The court also reviewed the fairness of the scheme, assessing the rights and interests of the different classes of creditors and members affected by the arrangement.

In its decision, the court found the scheme to be fair and reasonable to the company's creditors and members. The court held that the scheme complied with the statutory requirements and provided adequate protection to the interests of the relevant parties. The judge approved the scheme, recognising its potential benefits to the company and its stakeholders. The court's decision paved the way for the proposed cash acquisition to proceed under the approved scheme of arrangement.

Orders