Re Kumarina Resources Ltd

The case of Re Kumarina Resources Ltd involved the plaintiff company, Kumarina Resources Ltd, and its members, including the Objectors, who contested a proposed scheme of arrangement under the Corporations Act 2001 (Cth). The Objectors objected to the scheme on the basis that the necessary approval for the scheme had not been met and sought to have the scheme disapproved by the Court. The Federal Court was tasked with determining whether the 75% majority vote requirement had been satisfied and whether the Court should exercise its discretion to refuse approval of the scheme.

The primary legal issues before the Court were whether the Objectors' shares should have been classified into different classes of shareholders and if the Court should exclude these shares when determining whether the 75% approval threshold had been met. The Objectors argued that, as their interests were affected differently by the scheme, they should form separate classes of shareholders and that their votes should not be counted towards the 75% approval threshold. The Court considered the definition of "class" under section 411 of the Corporations Act and relevant case law, particularly Re Opes Prime Stockbroking Ltd (No 2), which held that differences in rights, rather than interests, determined whether separate classes of creditors were required.

The Court found that the Objectors' shares did not form separate classes, as the difference in their interests did not translate to a difference in their rights. The Court adopted a practical business-like approach and held that the Objectors' shares could be counted towards the 75% approval threshold. The Court was satisfied that the approval threshold had been met, and therefore, it approved the scheme of arrangement.

The Court approved the scheme of arrangement between the plaintiff and its members and exempted the plaintiff from compliance with section 411(11) of the Corporations Act. The Court ordered that the plaintiff lodge a copy of the orders with the Australian Securities and Investments Commission as soon as practicable. The orders were to be entered forthwith, in accordance with Rule 39.32 of the Federal Court Rules 2011.