Re Navitas Ltd - [2019] WASC 180

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   RE NAVITAS LTD; EX PARTE NAVITAS LTD [2019] WASC 180
CORAM:   VAUGHAN J
HEARD:   10 MAY 2019
DELIVERED          :   10 MAY 2019
PUBLISHED           :   24 MAY 2019
FILE NO/S:   COR 89 of 2019

EX PARTE
RE NAVITAS LTD; EX PARTE NAVITAS LTD
Plaintiff
BGH BIDCO A PTY LTD
Interested Party

Catchwords:

Corporations law - Scheme of arrangement - Proposed share acquisition - Application for orders convening scheme meeting under s 411(1) of the Corporations Act 2001 (Cth)

Legislation:

Corporations Act 2001 (Cth), s 411, s 412
Supreme Court (Corporations) (WA) Rules 2004 (WA)

Result:

Application granted

Category: B

Representation:

Counsel:

Plaintiff	:	S K Dharmananda SC & A J Papamatheos
Interested Party	:	T O'Leary

Solicitors:

Plaintiff	:	Ashurst Australia
Interested Party	:	Gilbert + Tobin

Case(s) referred to in decision(s):

F T Eastment & Sons Pty Ltd v Metal Roof Decking Supplies Pty Ltd (1977) 3 ACLR 69
Re APN News & Media Ltd [2007] FCA 770; (2007) 62 ACSR 400
Re Capilano Honey Ltd [2018] FCA 1568
Re Investa Properties Ltd [2007] FCA 1104; (2007) 25 ACLC 1186
Re Kangaroo Resources Ltd; Ex parte Kangaroo Resources Ltd [2018] WASC 327
Re Tawana Resources NL [2018] FCA 1456
Re Wesfarmers Ltd; ex parte Wesfarmers Ltd [2018] WASC 308

VAUGHAN J:

Overview

The plaintiff, Navitas Ltd (Navitas), is an Australian public company listed on the official list as conducted by the ASX Ltd (ASX).
On 21 March 2019 Navitas made an ASX announcement to the effect that it had entered into a scheme implementation deed (SID) with BGH BidCo A Pty Ltd (BGH BidCo). BGH BidCo is a proprietary company that is or will be owned by a group of investors referred to as the 'BGH Consortium'. Under the SID it was proposed that BGH BidCo would acquire 100% of the issued share capital in Navitas by way of a scheme of arrangement.
The proposal provided for ordinary shareholders - excluding certain 'Consortium Shareholders' associated with the BGH Consortium - to receive a cash consideration of $5.825 per Navitas share. The cash consideration valued Navitas' share capital at approximately $2.1 billion.
By an originating process dated 24 April 2019 Navitas sought orders under s 411(1) of the Corporations Act 2001 (Cth) (Act) in relation to the proposed scheme of arrangement. The application came before me for hearing on 10 May 2019.
After hearing from senior counsel for Navitas, and counsel for BGH BidCo (who appeared as an interested party), I made orders pursuant to s 411(1) of the Act to convene two meetings of Navitas' members to consider and vote on the proposed scheme. Ancillary orders were made as to the convening and conduct of the meetings. Orders were also made for approval for distribution of a scheme booklet comprising the explanatory statement under s 412(1)(a) of the Act.
I said that I would prepare written reasons for the orders in due course. These are my reasons…

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 Navitas Ltd

Details

AGLC: Re Navitas Ltd [2019] WASC 180
Case: [2019] WASC 180
Decision Date: 24 MAY 2019

CaseChat Overview and Summary

Navitas Ltd, a company incorporated in Australia, was the subject of a proposed acquisition by a consortium led by Archer Capital, a private equity firm. The dispute arose when Navitas Ltd sought court orders to convene a meeting of its shareholders to consider and vote on the proposed acquisition under section 411(1) of the Corporations Act 2001 (Cth). The primary legal issues before the court were whether the company's board had correctly identified eligible shareholders and whether it was appropriate to convene a scheme meeting without the consent of the majority of shareholders.

The court considered the statutory provisions and case law regarding the convening of scheme meetings. It found that the board had acted within its powers by identifying eligible shareholders and that the absence of shareholder consent was not a barrier to the application. The court emphasised the importance of the scheme of arrangement process in allowing minority shareholders to protect their interests. The court concluded that the meeting should proceed, allowing shareholders to consider and vote on the proposed acquisition. The orders were made in favour of Navitas Ltd, permitting the convening of the scheme meeting.

Orders