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Re Latin Resources Limited

Re Latin Resources Limited

Case [2024] WASC 513 22 January 2025

Scheme of arrangement

Demerger

Share scheme meeting

Option scheme meeting

Corporations Act 2001 (Cth) s 411(1)

Corporations Act 2001 (Cth) s 412(1)(a)

Corporate Law & Governance

Type to search within this case.

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   RE LATIN RESOURCES LIMITED; EX PARTE LATIN RESOURCES LIMITED [2024] WASC 513
CORAM:   STRK J
HEARD:   28 NOVEMBER 2024
DELIVERED          :   28 NOVEMBER 2024
PUBLISHED           :   22 JANUARY 2025
FILE NO/S:   COR 171 of 2024
MATTER:   IN THE MATTER OF LATIN RESOURCES LIMITED

EX PARTE
LATIN RESOURCES LIMITED
Plaintiff

Catchwords:

Corporations law - Scheme of arrangement - Share scheme - Option scheme - Application for orders convening scheme meetings under Corporations Act 2001 (Cth) s 411(1) - Share scheme meeting - Option scheme meeting - Demerger of wholly owned subsidiary - Demerger condition precedent - Demerger meeting - Performance rights - Loan funded shares - Ineligible foreign holders - Electing small scheme participants - Foreign regulatory approval required - Bridging loan facility - Whether the formal requirements of the Corporations Act 2001 (Cth) s 411(1) had been satisfied - Court's discretion enlivened - Orders made convening scheme meetings - Distribution of scheme booklet containing the explanatory statement required by the Corporations Act 2001 (Cth) s 412(1)(a) approved - Ancillary orders

Legislation:

Corporations Act 2001 (Cth)
Corporations Regulations 2001 (Cth)
Supreme Court (Corporations) (WA) Rules 2004 (WA)

Result:

Application granted
Orders made convening scheme meetings

Category: B

Representation:

Counsel:

Plaintiff	:	AJ Papamatheos SC & CE Joyce
Interested Party	:	K Sleiman

Solicitors:

Plaintiff	:	King & Wood Mallesons
Interested Party	:	Corrs Chambers Westgarth

Cases referred to in decision:

Allkem Ltd, the matter of Allkem Limited [2023] FCA 1397
Australian Securities Commission v Marlborough Gold Mines Ltd [1993] HCA 15; (1993) 177 CLR 485
Blackmores Limited, in the matter of Blackmores Limited [2023] FCA 624
Cortona Resources Limited, in the matter of Cortona Resources Limited [2012] FCA 1295
Coventry Resources Ltd, in the matter of Coventry Resources Ltd [2012] FCA 1252
Creso Pharma Limited [2019] WASC 472
CSR Limited, in the matter of CSR Limited [2010] FCAFC 34; (2010) 183 FCR 358
DDH1 Limited, in the matter of DDH1 Limited [2023] FCA 982
Essential Metals Limited, in the matter of Essential Metals Limited [2023] FCA 1101
Essential Metals Limited, in the matter of Essential Metals Limited [2023] FCA 240
Excelsior Gold Limited, in the matter of Excelsior Gold Ltd [2018] FCA 2064
First Pacific Advisors LLC v Boart Longyear Ltd [2017] NSWCA 116; (2017) 320 FLR 78
Gazal Corporation Limited, in the matter of Gazal Corporation Limited [2019] FCA 701
Healthscope Limited, in the matter of Healthscope Limited [2019] FCA 542; (2019) 139 ACSR 608
In the matter of Coca-Cola Amatil Limited [2021] NSWSC 270
In the matter of InvoCare Ltd [2023] NSWSC 1180
In the matter of Link Administration Holdings Limited [2022] NSWSC 650
In the matter of Opes Prime Stockbroking Ltd [2009] FCA 813; (2009) 179 FCR 20
In the matter of Tatts Group Limited [2017] VSC 552
Kangaroo Resources Ltd; Ex parte Kangaroo Resources Ltd [2018] WASC 327
OreCorp Limited, in the matter of OreCorp Limited [2023] FCA 1359
Re Advance Bank…

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 Latin Resources Limited

Details

AGLC: Re Latin Resources Limited [2024] WASC 513
Case: [2024] WASC 513
Decision Date: 22 JANUARY 2025

CaseChat Overview and Summary

The application before the Court was brought by Latin Resources Limited, an Australian corporation, against several parties, including various shareholders and the Australian Securities and Investments Commission (ASIC). The primary dispute centred around the company's proposed demerger of its wholly owned subsidiary, which was intended to be a condition precedent to the implementation of a share scheme. The application sought orders convening meetings of shareholders and members to approve the scheme under section 411(1) of the Corporations Act 2001 (Cth). The court had to determine whether the formal requirements of the Act had been satisfied and whether it should exercise its discretion to convene the meetings.

The key legal issues before the Court involved the satisfaction of formal requirements for convening meetings under section 411(1) of the Corporations Act 2001 (Cth), the distribution of an explanatory statement, and the eligibility of various participants in the scheme. The Court had to consider whether the explanatory statement was adequate, whether the meetings could proceed with the demerger as a condition precedent, and whether the scheme was fair and reasonable to all parties involved, particularly focusing on the eligibility of foreign holders and the need for foreign regulatory approval. Additionally, the Court examined the implications of a bridging loan facility on the scheme and the performance rights associated with the option scheme.

After careful consideration, the Court found that the formal requirements of the Act had been met. The Court determined that the explanatory statement was satisfactory and that convening the meetings was appropriate. The Court exercised its discretion to make orders convening the scheme meetings, and it approved the distribution of the scheme booklet containing the explanatory statement as required by section 412(1)(a) of the Corporations Act 2000 (Cth). The Court also made several ancillary orders to ensure the fairness and reasonableness of the scheme to all participants. The Court's decision was based on a comprehensive analysis of the statutory requirements, the fairness of the scheme, and the eligibility of the various stakeholders involved.

Orders