Re Nzuri Copper Ltd; [No 3] - [2019] WASC 280

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   RE NZURI COPPER LTD; EX PARTE NZURI COPPER LTD [No 3] [2019] WASC 280
CORAM:   VAUGHAN J
HEARD:   1 AUGUST 2019
DELIVERED          :   1 AUGUST 2019
PUBLISHED           :   8 AUGUST 2019
FILE NO/S:   COR 109 of 2019

EX PARTE
NZURI COPPER LTD
Plaintiff

Catchwords:

Corporations law - Scheme of arrangement - Application for orders pursuant to s 1319 of the Corporations Act 2001 (Cth) - Supplementary disclosure - Whether appropriate to make orders for dispatch of additional material to shareholders - Whether proxies to remain valid

Legislation:

Corporations Act 2001 (Cth), s 1319

Result:

Application granted

Representation:

Counsel:

Plaintiff

A J Papamatheos

Solicitors:

Plaintiff

Bellanhouse

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

Re Nzuri Copper Ltd; Ex parte Nzuri Copper Ltd [2019] WASC 189
Re Nzuri Copper Ltd; Ex parte Nzuri Copper Ltd [No 2] [2019] WASC 214

VAUGHAN J:

(These reasons were delivered orally at the conclusion of the hearing. They have been edited to correct matters of grammar and infelicity of expression. Authorities and other references have also been footnoted rather than appearing in the body of the reasons.)

The plaintiff, Nzuri Copper Ltd (Nzuri), has proposed a scheme of arrangement.
The matter has been before me on three occasions before today. Relevantly:
(1)On 30 May 2019 I made orders convening a scheme meeting.[1]
(2)On 12 June 2019 I made orders providing, among other things, for supplementary disclosure.[2]
(3)On 5 July 2019, in circumstances where it was proposed that the scheme meeting would be adjourned, I made some consequential orders in anticipation of the adjournment.
[1] Re Nzuri Copper Ltd; Ex parte Nzuri Copper Ltd [2019] WASC 189 (Nzuri Copper Ltd).
[2] Re Nzuri Copper Ltd; Ex parte Nzuri Copper Ltd [No 2] [2019] WASC 214 (Nzuri Copper Ltd [No 2]).
The scheme meeting proceeded on 8 July 2019. However, as anticipated, the chairperson at the meeting caused the scheme meeting to be adjourned. The scheme meeting has been adjourned to 19 August 2019.
The scheme meeting was adjourned in circumstances where the bidder, Xuchen International Ltd (Xuchen), had experienced delays in obtaining certain approvals from government agencies in the People's Republic of China. Those approvals are a condition precedent to the coming into effect of the scheme.
In anticipation of the adjourned scheme meeting Nzuri makes application today for orders providing for:
·   further supplementary disclosure;
·   the treatment of proxies for the purpose of the adjourned scheme meeting; and
·   minor other orders consequential on the adjournment (none of which are contentious).
The application is supported by five affidavits:
(1)affidavits of Hannah Hudson affirmed 23 and 31 July 2019 (there are two 31 July affidavits);
(2)an affidavit of Jieying Zhong affirmed 23 July 2019; and
(3)an affidavit of Deanna Carpenter affirmed this morning.
I addressed the relevant principles on the issue of supplementary disclosure in the 12 June 2019 decision.[3] The same reasons dealt with the question of directions on the…

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 Nzuri Copper Ltd; [No 3]

Details

AGLC: Re Nzuri Copper Ltd; [No 3] [2019] WASC 280
Case: [2019] WASC 280
Decision Date: 8 AUGUST 2019

CaseChat Overview and Summary

The case of Re Nzuri Copper Ltd; [No 3] involved a company seeking orders to dispatch supplementary disclosure material to its shareholders. The application was made pursuant to section 1319 of the Corporations Act 2001, following a proposed scheme of arrangement for the company's restructuring. The issue before the court was whether it was appropriate to make orders for the dispatch of additional material to shareholders and whether proxies should remain valid.

The legal issues the court was required to decide were centred on the adequacy and timeliness of disclosure to shareholders in the context of a scheme of arrangement. The company argued that the supplementary disclosure was necessary to ensure that shareholders were fully informed and could make an informed decision regarding the scheme. The court had to consider the principle of full and frank disclosure and the interests of fairness and transparency in the process.

The court found that the supplementary disclosure was necessary and appropriate to provide shareholders with complete and accurate information. The court determined that the additional material should be dispatched to ensure that shareholders could make an informed decision. Furthermore, the court ruled that proxies should remain valid, allowing shareholders to vote on the scheme through their appointed proxies. The decision was based on the necessity of full disclosure and the importance of ensuring that shareholders had the opportunity to exercise their rights effectively.

As a result of the court's decision, the company was authorised to dispatch the supplementary disclosure material to its shareholders. The validity of proxies was also upheld, enabling shareholders to vote on the scheme through their appointed representatives. This decision underscores the importance of comprehensive disclosure in corporate restructuring processes and the need to protect the rights of shareholders.

Orders