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Re Pensana Metals Ltd

Re Pensana Metals Ltd

Case [2020] WASC 17 23 January 2020

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JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   RE PENSANA METALS LTD; EX PARTE PENSANA METALS LIMITED [No 2] [2020] WASC 17
CORAM:   HILL J
HEARD:   22 JANUARY 2020
DELIVERED          :   22 JANUARY 2020
PUBLISHED           :   23 JANUARY 2020
FILE NO/S:   COR 215 of 2019

EX PARTE
PENSANA METALS LIMITED
Plaintiff

Catchwords:

Corporations law - Scheme of arrangement - Application for orders approving scheme under s 411(b) of the Corporations Act 2001 (Cth) - Low shareholder turnout at scheme meeting - Orders made approving scheme

Legislation:

Corporations Act 2001 (Cth), s 411

Result:

Orders made approving scheme

Category: B

Representation:

Counsel:

Plaintiff

Mr S K Dharmananda SC & Ms K J Hall

Solicitors:

Plaintiff

DLA Piper Australia - Perth

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

Ex parte Pensana Metals Limited [2019] WASC 479
Re Auzex Resources Ltd [No 2] [2012] QSC 101
Re Avoca Resources Ltd [2011] FCA 208
Re Cortona Resources Ltd [No 2] [2013] FCA 302
Re Decimal Software Limited; in the matter of Decimal Software Limited [No 2] [2018] FCA 2040
Re Foundation Healthcare Ltd [No 2] [2002] FCA 973; (2002) 43 ACSR 680
Re Great Artesian Oil and Gas Ltd [No 2] [2008] FCA 1169
Re International Goldfields Ltd [2004] WASC 112
Re Rebel Sport Ltd [No 2] [2007] FCA 458
Re Seven Network Ltd [No 3] [2010] FCA 400; (2010) 267 ALR 583
Re Straits Resources Ltd [No 2] [2011] FCA 47
Re Wesfarmers Ltd; Ex parte Wesfarmers Ltd [No 2] [2018] WASC 357
TriAusMin Limited, in the matter of TriAusMin Limited [No 2] [2014] FCA 833

HILL J:

The plaintiff, Pensana Metals Ltd (Pensana), applies for orders approving a proposed scheme of arrangement (Scheme). The background to the matter is set out in the judgment that I gave following the first court hearing.[1] At the first court hearing, I made orders for the Scheme meeting to be convened.
[1] Ex parte Pensana Metals Limited [2019] WASC 479.
The Scheme meeting was convened and held on 15 January 2020. At this meeting, the resolution was passed by the requisite statutory majorities.
103 shareholders were present at the Scheme meeting in person and by proxy, comprising approximately 6.41% of the total number of shareholders by number and 37.08% of the voting shares in the plaintiff.[2] 91.26% of shareholders who voted at the meeting were in favour of the resolution.[3] 99.43% of votes cast on the resolution were cast in favour of the resolution.[4]
[2] Affidavit of Scott Adrian Mison filed 20 January 2020 [5] - [6].
[3] Affidavit of Scott Adrian Mison filed 20 January 2020 [9].
[4] Affidavit of Scott Adrian Mison filed 20 January 2020 [8].

Approval of Scheme

This matter came back before me for the second court hearing on 22 January 2020.
In addition to the affidavits that were relied upon at the first hearing, Pensana relied on the following additional affidavits:
(a)a second affidavit of Michael Ng filed 16 January 2020, the chairperson of…

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 Pensana Metals Ltd

Details

AGLC: Re Pensana Metals Ltd [2020] WASC 17
Case: [2020] WASC 17
Decision Date: 23 JANUARY 2020

CaseChat Overview and Summary

In the matter of Pensana Metals Limited, the applicant, the court was asked to consider an application for orders approving a scheme of arrangement under section 411(b) of the Corporations Act 2001. The primary issue at hand was the adequacy of shareholder participation in the scheme meeting, given that the turnout was notably low. The applicant argued that despite the low turnout, the scheme should still be approved as it had the support of the requisite majority of shareholders who attended and voted.

The court focused on whether the low participation rate rendered the scheme invalid or whether the approval of the scheme could proceed under the specific provisions of section 411(b). The court determined that the low turnout did not invalidate the scheme, provided that the scheme had been fairly conducted and that the shareholders who participated and voted in favour of the scheme represented the necessary majority as required by the Corporations Act. The court concluded that the scheme met all statutory requirements and was fair to all shareholders, including those who did not participate.

Consequently, the court approved the scheme of arrangement and made the orders sought by the applicant. This decision allows Pensana Metals Limited to proceed with the restructuring as proposed under the scheme, subject to the court's conditions. The court's approval hinges on the assurance that the scheme was fairly conducted and that the requisite majority was achieved among the participating shareholders.

Orders