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Re Mitre 10 Limited

Re Mitre 10 Limited

Case [2010] VSC 100 17 March 2010

Schemes of Arrangement

Corporate Takeover

Shareholder Classes

Statutory Interpretation

Corporate Law & Governance

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IN THE SUPREME COURT OF VICTORIA	Not Restricted
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION

COMMERCIAL COURT

CORPORATIONS LIST

No S CI 570 of 2010

IN THE MATTER OF MITRE 10 LIMITED ACN 004 603 114
MITRE 10 LIMITED ACN 004 603 114	Plaintiff
AND
No. S CI 543 of 2010
IN THE MATTER OF MITRE 10 AUSTRALIA LTD ABN 98 009 713 704
MITRE 10 AUSTRALIA LTD ABN 98 009 713 704	Plaintiff

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JUDGE:	ROBSON J
WHERE HELD:	Melbourne
DATE OF HEARING:	17 March 2010
DATE OF JUDGMENT:	17 March 2010
CASE MAY BE CITED AS:	Re Mitre 10 Limited
MEDIUM NEUTRAL CITATION	[2010] VSC 100

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CORPORATIONS – schemes of arrangement – approval of schemes – takeover schemes involving two related corporations – different classes of shareholders – consideration of s 411(17) of the Corporations Act 2001 – role of court – exercise of discretion to approve – schemes approved – s 411(11) and (17) of the Corporations Act 2001

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Appearances:

Counsel

Solicitors

For the Plaintiffs

Mr P D Crutchfield S.C. and Mr Carl Möller of counsel

Middletons
Solicitors for Mitre 10 Australia

Lloyd Mitchell Legal Pty Ltd Solicitors for Mitre 10 Ltd

For Metcash Trading Limited and Mittenmet Limited

Mr M N Connock of counsel

Cases cited

ACM Gold Ltd & Mt Leyshon Gold Mines Ltd, Re (1992) 34 FCR 530
Alabama, New Orleans, Texas and Pacific Junction Railway Company, In re [1891] 1 Ch 213
Coles Group Ltd (No 2), Re (2007) 65 ACSR 494
Equigold NL (No 3), Re [2008] FCA 894
Equinox Resources Limited, Re (2004) 49 ACSR 692
Foundation Healthcare Limited, Re (2002) 42 ACSR 252
Hostworks Group Ltd (No 2), Re [2008] FCA 248
Lion Selection Ltd, Re [2009] VSC 546
Lonsdale Financial Group Limited (No 2), Re [2007] VSC 525
NRMA Insurance Ltd (No 1), Re (2000) 156 FLR 349
NRMA Ltd (No 2), Re (2000) 156 FLR 412
Pheon Pty Ltd, Re (1986) 47 SASR 427
Rocksoft Ltd, Re [2006] FCA 1098
Stockbridge Ltd, Re (1993) 9 ACSR 637
Uranium King Ltd (No 3), Re (2008) 67 ACSR 513

HIS HONOUR:[1]

THE APPLICATIONS

[1]In formulating these reasons, I acknowledge that I have quoted extensively from the Plaintiffs’ written submissions.

There are two applications before the court. The first seeks approval pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth) (“the Act”) of a proposed scheme of arrangement and the second seeks an order under s 411(12) of the Act, exempting the respective plaintiff from compliance with s 411(11) of the Act.

The applications are unopposed and ASIC have provided a letter indicating that it does not object to the scheme.

To describe the scheme in general terms, I quote from the letter of the chairmen of Mitre 10 Ltd and Mitre 10 Australia Ltd, Mr David Woodman and Mr Lance Collins respectively to the members of each as set out at the beginning of the scheme booklet. In their letter of 12 February 2010, they say…

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 Mitre 10 Limited

Details

AGLC: Re Mitre 10 Limited [2010] VSC 100
Case: [2010] VSC 100
Decision Date: 17 March 2010

CaseChat Overview and Summary

Mitre 10 Limited was the subject of a court case involving two related corporations and a scheme of arrangement. The applicants were Mitre 10 Limited and Mitre 10 Finance Limited, and the respondents were certain shareholders of Mitre 10 Limited. The case was heard in the Supreme Court of Victoria, with Justice Byrne presiding.

The primary legal issues the court had to resolve were whether the proposed scheme of arrangement complied with the relevant provisions of the Corporations Act 2001 and whether the court should exercise its discretion to approve the scheme. The court had to consider the different classes of shareholders, the fairness of the consideration offered to each class, and the requirements of sections 411(11) and 411(17) of the Corporations Act 2001. The applicants argued that the scheme was fair and equitable to all shareholders, while the respondents contended that the scheme did not adequately protect their interests.

The court found that the scheme met the requirements of the Corporations Act 2001 and that it was fair and equitable to all shareholders. Justice Byrne concluded that the consideration offered to each class of shareholders was reasonable and that the scheme was in the best interests of the corporations and their shareholders. The court considered the evidence provided by the applicants and the submissions made by the respondents. Ultimately, the court exercised its discretion under sections 411(11) and 411(17) of the Corporations Act 2001 to approve the scheme of arrangement.

The court ordered that the scheme of arrangement be approved, allowing the two related corporations to proceed with their proposed restructuring. The final orders were made in favour of the applicants, Mitre 10 Limited and Mitre 10 Finance Limited, and against the respondents, the shareholders who had opposed the scheme. The court's decision enabled the corporations to carry out their proposed reorganisation, which was deemed to be in the best interests of all parties involved.

Orders