FEDERAL COURT OF AUSTRALIA
Kidman Resources Limited, in the matter of Kidman Resources Limited [2019] FCA 1226
File number:
VID 733 of 2019
Judge:
O'CALLAGHAN J
Date of judgment:
30 July 2019
Date of publication of reasons:
7 August 2019
Catchwords:
CORPORATIONS – scheme of arrangement – first court hearing – orders sought under section 411(1) of the Corporations Act 2001 (Cth) for convening of meeting – whether directors who are to receive a substantial financial benefit if scheme is approved should decline to make a recommendation to the shareholders as to how they should vote – Re Gazal Corporation Limited [2019] FCA 701 and Re Ruralco Holdings Ltd [2019] FCA 878 not followed – orders made
Legislation:
Corporations Act 2001 (Cth) ss 411 and 412
Corporations Regulations 2001 (Cth) Schedule 8
Cases cited:
Re Amcor Ltd [2019] FCA 346
Re APN News and Media Limited [2007] FCA 770; (2007) 62 ACSR 400
Re CSR Ltd (2010) 183 FCR 358
Re Dyno Nobel Ltd [2008] VSC 154
Re Gazal Corporation Limited [2019] FCA 701
Re Healthscope Limited [2010] VSC 367
Re Healthscope Limited [2019] FCA 542
Re Hostworks Group Ltd [2008] FCA 64; (2008) 26 ACLC 137
Re Navitas Ltd (No 2) [2019] WASC 218
Re Nzuri Copper Ltd [2019] WASC 189
Re Ruralco Holdings Ltd [2019] FCA 878
Re Sino Gold Ltd [2009] FCA 1277; (2009) 74 ACSR 647
Re Spicers Limited [2019] FCA 731
Re Verdant Minerals Ltd [2019] FCA 556
Re Westfield Holdings Ltd [2004] NSWSC 458; (2004) 49 ACSR 734
Date of hearing:
30 July 2019
Registry:
Victoria
Division:
General Division
National Practice Area:
Commercial and Corporations
Sub-area:
Corporations and Corporate Insolvency
Category:
Catchwords
Number of paragraphs:
119
Counsel for the Plaintiff:
G J Ahern
Solicitor for the Plaintiff:
Maddocks
Counsel for the Interested Party (Wesfarmers Lithium):
P D Crutchfield QC
Solicitor for the Interested Party (Wesfarmers Lithium):
Allens
ORDERS
VID 733 of 2019
IN THE MATTER OF KIDMAN RESOURCES LIMITED
KIDMAN RESOURCES LIMITED
Plaintiff
JUDGE:
O'CALLAGHAN J
DATE OF ORDER:
30 July 2019
OTHER MATTERS:
A. The Court notes that the Australian Securities and Investments Commission (ASIC) was provided with at least 14 days’ notice of the hearing of this application.
B. The Court is satisfied that ASIC has had a reasonable opportunity to:
(a) examine the terms of the proposed scheme of arrangement to which the application relates and a draft explanatory statement relating to that arrangement; and
(b) make submissions to the Court in relation to the proposed scheme of arrangement and the draft explanatory statement.
C. The Court notes the letter from ASIC to Maddocks, the solicitors for the Plaintiff dated 29 July 2019, at Tab 1 to Exhibit “RS-2” to the affidavit of Ron Smooker sworn 30 July 2019 (Third Smooker Affidavit).
THE COURT ORDERS THAT:
1. Pursuant to rule 2.13(1) of the Federal Court (Corporations) Rules 2000 (Cth) (Rules), Wesfarmers Lithium Pty Ltd ACN 633 472 803 has leave to…
Continue reading Re Kidman Resources Ltd
Sign in free to access the full text
- AGLC
- Re Kidman Resources Ltd [2019] FCA 1226
- Case
- [2019] FCA 1226
- Decision Date
CaseChat Overview and Summary
The court was required to decide whether Wesfarmers Lithium should be granted leave to participate in the proceeding without becoming a party, and if so, under what conditions. Additionally, the court needed to determine the appropriate manner in which the meeting of shareholders should be convened and conducted, including the format and content of the notice and documentation to be sent to shareholders, the timing of the meeting, and the method of voting. The court also had to consider the necessity of certain procedural orders and the publication of an advertisement regarding the scheme.
The court granted Wesfarmers Lithium leave to be heard in the proceeding without becoming a party, subject to certain conditions. The court ordered that the Plaintiff convene a meeting of its shareholders to consider and vote on the scheme, specifying the date, time, and location of the meeting. The court provided detailed directions for the convening of the meeting, including the format and content of the notice and documentation to be sent to shareholders, depending on their election to receive communications electronically and their residency status. The court also set out the method of voting on the resolution to approve the scheme, the timing for the delivery of proxy forms, and the conduct of the meeting. The court further directed the publication of an advertisement regarding the scheme and adjourned the further hearing of the originating process.
The court’s orders ensure that the scheme meeting is conducted in a fair and transparent manner, providing all shareholders with the necessary information and opportunity to participate in the decision-making process. The detailed procedural directions address the specific needs of different categories of shareholders, facilitating their engagement in the meeting. The court's decision enables the proceeding to progress while balancing the interests of all parties involved.
Orders
Orders of the court
1. Pursuant to rule 2.13(1) of the Federal Court (Corporations) Rules 2000 (Cth) (Rules), Wesfarmers Lithium Pty Ltd ACN 633 472 803 has leave to be heard in the proceeding without becoming a party to it.
2. Pursuant to s 411(1) of the Corporations Act 2001 (Cth) (Act), the Plaintiff convene and hold a meeting (Scheme Meeting) of the holders of ordinary shares in the Plaintiff (Scheme Shareholders):
(a) to consider, and, if thought fit, to approve (with or without any alterations or conditions) the scheme of arrangement (Scheme) proposed to be made between the Plaintiff and its shareholders, the terms of which are as set out in Annexure B to these orders; and
(b) to be held at RACV Club, Level 2, Bourke Room 2 & 3, 501 Bourke Street, Melbourne, Victoria on 5 September 2019 commencing at 10.00am (Melbourne time).
3. The Scheme Meeting be convened by sending on or before 6 August 2019:
(a) in the case of Scheme Shareholders who have elected to receive shareholder communications electronically by way of email (Email Shareholders), and whose registered address is in Australia, an email substantially in the form at Tab 22 of Exhibit “GJP-1” to the affidavit of George Pizzey sworn on 26 July 2019 (Pizzey Affidavit) and which contains links to:
(i) an electronic copy of a document substantially in the form of the scheme booklet, a draft of which is at Tab 4 of Exhibit “RS-2” to the Third Smooker Affidavit (Scheme Booklet), which contains, among other things, the Notice of Scheme Meeting at Attachment 4 to the Scheme Booklet and the Notice of General Meeting at Attachment 5 to the Scheme Booklet; and
(ii) an online portal or website that is accessible by the Email Shareholder and which enables the Email Shareholder to lodge their proxy for the Scheme Meeting and the General Meeting and voting instructions online; and
(b) in the case of Email Shareholders, and whose registered address is outside Australia, an email substantially in the form at Annexure “RS-5” to the further affidavit of Ron Smooker sworn on 30 July 2019 (Fourth Smooker Affidavit), and which contains links to:
(i) an electronic copy of a document substantially in the form of the scheme booklet, a draft of which is at Tab 4 of Exhibit “RS-2” to the Third Smooker Affidavit (Scheme Booklet), which contains, among other things, the Notice of Scheme Meeting at Attachment 4 to the Scheme Booklet and the Notice of General Meeting at Attachment 5 to the Scheme Booklet; and
(ii) an online portal or website that is accessible by the Email Shareholder and which enables the Email Shareholder to lodge their proxy for the Scheme Meeting and the General Meeting and voting instructions online; and
(iii) a ‘Foreign Resident capital gains withholding – vendor declaration form’, in the form at Annexure “RS-3” to the Fourth Smooker Affidavit (Foreign Resident Declaration Form); and
(c) in the case of Scheme Shareholders who are not Email Shareholders and whose registered address is in Australia, the following documents by pre-paid post addressed to the relevant addresses recorded in the Plaintiff’s register:
(i) a document substantially in the form of the Scheme Booklet, which contains, among other things, the Notice of Scheme Meeting at Attachment 4 to the Scheme Booklet and the Notice of General Meeting at Attachment 5 to the Scheme Booklet;
(ii) a personalised electronic proxy form for the Scheme Meeting, substantially in the form at Tab 9 of Exhibit “RS-1” to the affidavit of Ron Smooker sworn 26 July 2019 (Second Smooker Affidavit) (Scheme Proxy Form); and
(iii) a personalised electronic proxy form for the General Meeting, substantially in the form at Tab 5 of Exhibit “RS-2” to the Third Smooker Affidavit (General Proxy Form); and
(iv) a reply paid envelope for the return of the Proxy Forms;
(d) in the case of Scheme Shareholders who are not Email Shareholders and whose registered address is outside Australia, the following documents by airmail addressed to the relevant addresses recorded in the Plaintiff’s register:
(i) a document substantially in the form of the Scheme Booklet, which contains, among other things, the Notice of Scheme Meeting at Attachment 4 to the Scheme Booklet and the Notice of General Meeting at Attachment 5 to the Scheme Booklet;
(ii) a personalised Scheme Proxy Form; and
(iii) a personalised General Proxy form; and
(iv) a return envelope for the return of the Proxy Forms; and
(v) a Foreign Resident Declaration Form.
4. Subject to these Orders, the Scheme Meeting be convened, held and conducted in accordance with the provisions of:
(a) Part 2G.2 of the Act (save for any applicable replaceable rule) that apply to a meeting of the Plaintiff’s members; and
(b) the Plaintiff’s constitution that apply in relation to meetings of member and that are not inconsistent with Part 2G.2 of the Act.
5. Voting on the resolution to approve the Scheme is to be conducted by way of a poll as declared by the Chairperson.
6. A Proxy Form in respect of the Scheme Meeting will be valid and effective if, and only if, it is completed and delivered in accordance with its terms by 10.00am (Melbourne time) on 3 September 2019.
7. Mr George John Pizzey, or failing him, Mr Aaron Mark Colleran, be Chair of the Scheme Meeting.
8. The Chair of the Scheme Meeting shall have the power to adjourn the meeting to such time, date and place as he considers appropriate.
9. Compliance with rule 2.15 of the Rules is dispensed with.
10. Compliance with rule 3.4 and Form 6 of the Rules is dispensed with.
11. The Plaintiff publish in The Australian newspaper once on or before 29 August 2019 an advertisement substantially in the form of Annexure A to these Orders.
12. The further hearing of the Originating Process is adjourned to a hearing before Justice O’Callaghan on 12 September 2019 at 10.15am (Melbourne time).
13. There is liberty to apply.
14. Pursuant to rule 39.34 of the Federal Court Rules 2011 (Cth), these orders be entered forthwith.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
ANNEXURE A
Notice of Second Court Hearing
Notice of hearing to approve compromise or arrangement
TO all the members of Kidman Resources Limited (ACN 143 526 096) (Kidman)
TAKE NOTICE that at 10.15am on 12 September 2019 the Federal Court of Australia (Victorian Registry) at 305 William Street Melbourne VIC 3000 will hear an application by Kidman seeking the approval of a compromise or arrangement between Kidman and its members if agreed to by a resolution to be considered, and, if thought fit, passed at a meeting of such members to be held on 5 September 2019 at RACV Club, Level 2, Bourke Room 2 & 3, 501 Bourke Street, Melbourne, Victoria, commencing at 10.00am (Melbourne time).
If you wish to oppose the approval of the compromise or arrangement, you must file and serve on Kidman a notice of appearance, in the prescribed form, together with any affidavit on which you wish to rely at the hearing. The notice of appearance and affidavit must be served on Kidman at its address for service by 5.00pm on 11 September 2019.
The address for service of Kidman is: c/o Maddocks Lawyers, Collins Square, Tower Two, Level 25, 727 Collins Street, Melbourne, Victoria, 3008 [Ref: Ron Smooker].
ANNEXURE B
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
Full text does not contain this section.