Re Marengo Mining Ltd (No 2) - [2012] FCA 1498

FEDERAL COURT OF AUSTRALIA
Marengo Mining Ltd, in the matter of Marengo Mining Ltd (No 2) [2012] FCA 1498

Citation: Marengo Mining Ltd, in the matter of Marengo Mining Ltd (No 2) [2012] FCA 1498

Parties: MARENGO MINING LTD (ACN 099 496 474)

File number: WAD 287 of 2012

Judge: BARKER J

Date of judgment: 18 December 2012

Catchwords: CORPORATIONS – application pursuant to s 411 Corporations Act 2001 (Cth) – application to approve scheme of arrangement

Legislation: Corporations Act 2001 (Cth) s 249J, s 249J(3A), s 411(4), s 411(4)(a), s 411(4)(a)(ii), s 411(4)(b), s 411(17)(a), s 411(17)(b), s 412(1)(a), s 412(6)
Securities Act of 1933 (US) s 3(a)(10)
Federal Court (Corporations) Rules 2000 (Cth) R 2.6, R 2.11, R 2.12, R 3.4, Div 3

Cases cited: Marengo Mining Ltd, in the matter of Marengo Mining Ltd [2012] FCA 1220
Re Spark Infrastructure Holdings No 1 Ltd [2010] NSWSC 1497; (2010) 79 NSWLR 756

Date of hearing: 18 December 2012

Place: Perth

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 28

Counsel for the Plaintiff: Mr PI Jooste QC

Solicitor for the Plaintiff: Gilbert + Tobin

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

GENERAL DIVISION

WAD 287 of 2012

IN THE MATTER OF MARENGO MINING LTD

MARENGO MINING LTD (ACN 099 496 474)
Plaintiff

JUDGE:

BARKER J

DATE OF ORDER:

18 DECEMBER 2012

WHERE MADE:

PERTH

THE COURT ORDERS THAT:
1.Order 8 of the orders of this Court of 29 October 2012 is varied pursuant to Rules 1.32 and 39.05(c) of the Federal Court Rules 2011 (Cth) by inserting in order 8 the following words (in bold):
“No later than 6pm (WST) on Tuesday, 6^th November 2012, the Plaintiff (subject to the registration of the Scheme Booklet by ASIC pursuant to section 412(6) of the Act) dispatch documents comprising the:
(a) Scheme Booklet; and
(b) Notice of Court ordered Scheme Meeting and Proxy Form,
which are Annexures MAC-9 and MAC-11 to the Churchward Affidavit to all the Shareholders of the Plaintiff by ordinary pre paid post (or, in the case of overseas members, by airmail) at their addresses appearing on the Plaintiff's register of members or by the nominated notification means in accordance with section 249J of the Act on the closest practicable business day before the dispatch of documents.”
2.The scheme of arrangement between the plaintiff and the holders of fully-paid ordinary shares in the plaintiff being annexure 2 to the scheme booklet (comprising the explanatory statement) (“Scheme”) which was dispatched in accordance with the orders of this Court of 29 October 2012 and which Scheme was agreed to by a resolution of the members of the plaintiff passed in accordance with section 411(4)(a)(ii) of the Corporations Act 2001 (Cth) (the “Act”) at a meeting on 6 December 2012, be approved pursuant to section 411(4)(b) of the Act with the alteration pursuant to section 411(6) of the Act, that clause 7.2 of the Scheme be replaced with the following new clause 7.2:
“Marengo must,…

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 Marengo Mining Ltd (No 2)

Details

AGLC: Re Marengo Mining Ltd (No 2) [2012] FCA 1498
Case: [2012] FCA 1498
Decision Date

CaseChat Overview and Summary

The case before the Federal Court of Australia involves Marengo Mining Ltd, which sought approval for a scheme of arrangement with its shareholders, pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth). This was the second hearing in relation to the scheme, with the first hearing resulting in an order for the convening of a meeting of shareholders and the approval of the explanatory statement required by s 412(1)(a) of the Corporations Act. The key legal issues the Court needed to decide were whether the scheme meeting was properly convened in accordance with the Court's earlier order, if the procedural requirements of the scheme had been satisfied, and whether the Court should exercise its discretion to approve the scheme.

The Court found that all procedural matters had been satisfied, including the registration of the explanatory statement, and the despatch of the relevant documents to shareholders, with the exception of 91 cases where notification was made using the nominated notification means allowed by s 249J of the Corporations Act. The Court accepted that the delay in notification for these 91 shareholders was not due to Marengo Mining's fault, and the order convening the meeting was varied to allow for electronic notification. Additionally, the Court found that Marengo Mining had satisfied its notice obligations to the beneficial holders under Canadian National Instrument 54-101, despite the delay by Broadbridge US in despatching the meeting documents. The Court also accepted that the special statutory majorities were met, and the scheme had been advanced in good faith and was fair and reasonable. With regard to the Court's discretion, the Court was satisfied that all relevant matters had been brought to its attention, and the scheme met the requirements of s 411 of the Corporations Act.

In light of these findings, the Court approved the scheme in the terms proposed by Marengo Mining, with the amendment mentioned in respect of the date of lodgement. The Court's decision also noted that Marengo Mining intended to rely on the Court's approval for the purposes of claiming exemption under s 3(a)(10) of the Securities Act of 1933 (US) in connection with the implementation of the proposed scheme.

Orders