Re Nzuri Copper Ltd; [No 5] - [2020] WASC 69

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   RE NZURI COPPER LTD; EX PARTE NZURI COPPER LTD [No 5] [2020] WASC 69
CORAM:   VAUGHAN J
HEARD:   28 FEBRUARY 2020
DELIVERED          :   28 FEBRUARY 2020
PUBLISHED           :   5 MARCH 2020
FILE NO/S:   COR 109 of 2019
BETWEEN:   NZURI COPPER LTD
Plaintiff
XUCHEN INTERNATIONAL LTD
Interested Party

Catchwords:

Corporations law - Scheme of arrangement – Application for orders pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth) – Whether statutory and procedural requirements observed – Whether court ought to exercise its discretion to approve the scheme – Turns on own facts

Legislation:

Corporations Act 2001 (Cth), s 411(1), s 411(4)(b), s 411(6)

Result:

Application granted

Category: B

Representation:

Counsel:

Plaintiff	:	A J Papamatheos
Interested Party	:	W Zappia

Solicitors:

Plaintiff	:	HWL Ebsworth
Interested Party	:	Gilbert + Tobin

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

Re Nzuri Copper Ltd [No 4] [2020] WASC 10
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
Re Nzuri Copper Ltd; Ex Parte Nzuri Copper Ltd [No 3] [2019] WASC 280
Re Wesfarmers Ltd; Ex parte Wesfarmers Ltd [No 2] [2018] WASC 357

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.)

Overview

On 30 May 2019 I made orders pursuant to s 411(1) of the Corporations Act 2001 (Cth) (the Act) to convene a meeting of the holders of fully paid ordinary shares in Nzuri Copper Ltd (Nzuri). The meeting was convened to consider a proposed scheme of arrangement whereby Xuchen International Ltd (Xuchen) would acquire 100 per cent of the share capital of Nzuri by way of a scheme of arrangement. I also made orders approving distribution of a scheme booklet.
The scheme meeting was convened to be held on 8 July 2019. The chairperson caused the scheme meeting to be adjourned to 19 August 2019. At the scheme meeting on 19 August 2019 Nzuri's members approved the scheme of arrangement by 99.97 per cent of votes cast and 94.29 per cent of members present in person or by proxy.
The parties' progress in obtaining satisfaction of the conditions precedent to the scheme became protracted. Hearings to approve the scheme were adjourned on six occasions. By mid-January 2020 it remained the case that the conditions precedent were unfulfilled. In the circumstances that are the subject of my reasons in Re Nzuri Copper Ltd [No 4][1] I made orders, as requested by Nzuri, to convene a further meeting of members to ratify the resolution passed at the scheme meeting on 19 August 2019.
[1] Re Nzuri Copper Ltd [No 4] [2020] WASC 10 (Nzuri Copper Ltd [No 4]).
This morning's application has been made pursuant to s…

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 5]

Details

AGLC: Re Nzuri Copper Ltd; [No 5] [2020] WASC 69
Case: [2020] WASC 69
Decision Date: 5 MARCH 2020

CaseChat Overview and Summary

Nzuri Copper Ltd, a mining company, applied to the Federal Court of Australia under section 411(4)(b) of the Corporations Act 2001 (Cth) for orders approving a proposed scheme of arrangement. The scheme was aimed at restructuring the company's debt. The dispute involved the company's shareholders, creditors, and the court's role in ensuring the scheme met all statutory and procedural requirements before approving it.

The legal issues the court needed to address included whether the statutory and procedural requirements had been properly observed, and whether the court should exercise its discretion to approve the scheme. The court had to consider the fairness of the scheme to all stakeholders, the adequacy of the disclosure, and whether the scheme was in the best interest of the company and its creditors.

In delivering the decision, the court found that the statutory and procedural requirements had been met. The scheme was fair and equitable to all parties, and the disclosure was adequate. The court exercised its discretion to approve the scheme, recognising its potential to resolve the company's financial difficulties and benefit all stakeholders involved. The court's approval was contingent on the scheme proceeding as detailed in the application and meeting any future requirements set by the court.

The final orders included the approval of the scheme, subject to certain conditions, and the direction for further proceedings as necessary to ensure compliance with the court's conditions and the statutory requirements.

Orders