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Re Ovato Print Pty Ltd

Re Ovato Print Pty Ltd

Case [2020] NSWSC 1882 21 December 2020

Schemes of Arrangement

Ancillary Relief

Creditors' Rights

Corporate Law & Governance

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Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Ovato Print Pty Ltd [2020] NSWSC 1882
Hearing dates: 18, 21 December 2020
Date of orders: 21 December 2020
Decision date: 21 December 2020
Jurisdiction: Equity - Corporations List
Before: Black J
Decision:
Orders approving creditors’ scheme and member’s schemes and ancillary orders.

Catchwords:
CORPORATIONS – Arrangements and reconstructions – Schemes of arrangement or compromise – Applications under s 411 of the Corporations Act 2001 (Cth) for orders approving proposed schemes of arrangement Single member schemes to obtain ancillary relief under s 413 of the Corporations Act – Where certain creditors wrote letters of objection but did not appear

Legislation Cited:
- Corporations Act 2001 (Cth), ss 411, 412, 413
- Fair Entitlements Guarantee Act 2012 (Cth)
Supreme Court (Corporations) Rules 1999 (NSW)

Cases Cited:
- Barrick (Australia Pacific Exploration) Pty Ltd v Barrick (PD) Australia Pty Ltd [2017] FCA 998
- Re Application of AGL Sydney Ltd (1994) 13 ACSR 597
- Re Atlas Iron Ltd (No 2) [2016] FCA 481
- Re BIS Finance Pty Ltd [2018] NSWSC 3
- Re Boart Longyear Ltd (No 2) (2017) 323 FLR 241; (2017) 122 ACSR 437; [2017] NSWSC 1105
- Re Buildmat (Australia) Ltd (1983) 1 NSWLR 291
- Re Capilano Honey Ltd (No 2) (2018) 132 ACSR 332; [2018] FCA 1925
- Re Centro Properties Ltd (in its capacity as responsible entity of Centro Property Trust) (2011) 86 ACSR 584; [2011] NSWSC 1465
- Re David Jones Ltd (No 3) (2014) 32 ACLC 14-037; [2014] FCA 753
- Re Investorinfo Ltd [2005] FCA 1848
- Re NRMA Ltd (2000) 156 FLR 349; (2000) 33 ACSR 595; [2000] NSWSC 82
- Re Opes Prime Stockbroking Ltd (2009) 179 FCR 20; (2009) 73 ACSR 385; [2009] FCA 813
- Re RBS Group (Australia) Pty Ltd (Unreported, 2 February 2012)
- Re Seven Network Ltd (No 3) (2010) 267 ALR 583; [2010] FCA 400
- Re Universal Liquors Pty Ltd (1990) 5 ACSR 104
- Royal Victorian Institute for the Blind Ltd v RBS.RVIB.VAF Ltd (2004) 206 ALR 581; 22 ACLC 897; [2004] FCA 735
- Stork ICM Australia Pty Ltd v Stork Food Systems Australia Pty Ltd (2007) 25 ACLC 208
- Xceed Resources Ltd [2014] FCA 170

Texts Cited:
T Damian & A Rich, Schemes, Takeovers and Himalayan Peaks, 3rd ed.

Category: Principal judgment
Parties: Ovato Print Pty Ltd (First Plaintiff)
Ovato Limited (Second Plaintiff)
Hannanprint NSW Pty Limited (Third Plaintiff)
Hannanprint Victoria Pty Limited (Fourth Plaintiff)
Inprint Pty Limited (Fifth Plaintiff)
Ovato Print Cairns Pty Ltd (First Defendant)
Ovato Packaging Pty Ltd (Second Defendant)
Ovato Creative Services Geebung Pty Ltd (Third Defendant)
The Independent Print Media Group Pty Limited (Fourth Defendant)
and 67 other Defendants
Representation:
Counsel:
Mr I Jackman SC/Ms S Scott (Plaintiffs)
Solicitors:
Ashurst Australia (Plaintiffs)

File Number(s): 2020/323408

Judgment

Nature of the application and background

The Plaintiffs, Ovato Print Pty Ltd (“Ovato Print”),…

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 Ovato Print Pty Ltd

Details

AGLC: In the matter of Ovato Print Pty Ltd [2020] NSWSC 1882
Case: [2020] NSWSC 1882
Decision Date: 21 December 2020

CaseChat Overview and Summary

The parties in this case were Ovato Print Pty Ltd, a single member company, and various creditors who had issued letters of objection but did not appear in court. The dispute centred on the company seeking approval for a proposed scheme of arrangement under section 411 of the Corporations Act 2001, which would allow the company to obtain ancillary relief under section 413. The court was required to decide whether the scheme should be approved despite the objections raised by certain creditors.

The legal issues before the court involved the interpretation and application of sections 411 and 413 of the Corporations Act. Specifically, the court had to determine whether the absence of the objecting creditors, who had not appeared in court, should be considered a significant factor in approving the scheme. Additionally, the court needed to weigh the interests of the company against those of the objecting creditors.

In determining the matter, the court held that the absence of the objecting creditors did not necessarily preclude approval of the scheme. The court reasoned that the primary purpose of the scheme was to provide a fair and equitable outcome for all parties involved, including the company and its creditors. The court found that the scheme offered a reasonable and practical solution to the company's financial difficulties and that the objecting creditors had not demonstrated that the scheme would be unfair or oppressive to them. Consequently, the court approved the scheme of arrangement, allowing the company to proceed with obtaining the necessary ancillary relief.

The final orders of the court were that the scheme of arrangement proposed by Ovato Print Pty Ltd be approved, and that the company be authorised to take all necessary steps to implement the scheme. The court also directed that the company provide appropriate notices to its creditors in accordance with the provisions of the Corporations Act.

Orders