Re Piedmont Lithium Ltd [No 3] - [2021] WASC 173

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   RE PIEDMONT LITHIUM LTD; EX PARTE PIEDMONT LITHIUM LTD [No 3] [2021] WASC 173
CORAM:   HILL J
HEARD:   5 MAY 2021
DELIVERED          :   5 MAY 2021
PUBLISHED           :  2 JUNE 2021
FILE NO/S:   COR 17 of 2021
MATTER                :IN THE MATTER OF PIEDMONT LITHIUM LTD

EX PARTE
PIEDMONT LITHIUM LTD
Plaintiff

Catchwords:

Corporations law - Scheme of arrangement - Application for orders approving scheme under s 411(4)(b) of the Corporations Act 2001 (Cth) - Orders made approving scheme

Legislation:

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

Result:

Orders made approving scheme

Category: B

Representation:

Counsel:

Plaintiff

Mr A J Papamatheos

Solicitors:

Plaintiff

Thomson Geer - Perth

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

Re Amcor Ltd [No 2] [2019] FCA 842
Re Auzex Resources Ltd [No 2] [2012] QSC 101
Re Avoca Resources Ltd [2011] FCA 208
Re Beadell Resources Ltd [No 2] [2019] WASC 53
Re CannPal Animal Therapeutics Ltd [No 2] [2021] WASC 83
Re Cortona Resources Ltd [No 2] [2013] FCA 302
Re 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 Pensana Metals Ltd [2020] WASC 17
Re Piedmont Lithium Ltd [2021] WASC 7
Re Piedmont Lithium Ltd [No 2] [2021] WASC 106
Re Rebel Sport Ltd [No 2] [2007] FCA 458
Re Saracen Mineral Holdings Ltd [No 2] [2021] WASC 32
Re Seven Network Ltd [No 3] [2010] FCA 400; (2010) 267 ALR 583
Re Straits Resources Ltd [No 2] [2011] FCA 47
Re TriAusMin Limited [No 2] [2014] FCA 833
Re Wesfarmers Ltd [No 2] [2018] WASC 357
Re Zenith Energy Ltd [No 3] [2020] WASC 289

HILL J:

The plaintiff, Piedmont Lithium Limited (Piedmont), applies for orders approving a proposed scheme of arrangement (Scheme). The background to the matter is set out in the judgment I delivered following the first court hearing.[1] At the first court hearing on 2 March 2021, I made orders for the Scheme meeting to be convened (First Orders). The Scheme meeting was scheduled to be held on 7 April 2021.
[1] Re Piedmont Lithium Ltd [2021] WASC 76.
On 25 March 2021, as a result of a capital raising undertaken by Piedmont, the plaintiff approached this court and requested a further hearing for orders to approve supplementary disclosure of documents and a postponement of the Scheme meeting. The matter came before me on 1 April 2021, where I made orders for approving the dispatch of a supplementary Scheme booklet and postponing the Scheme meeting (Supplementary Orders).[2]
[2] Re Piedmont Lithium Ltd [No 2] [2021] WASC 106.

Scheme Meeting

The Scheme meeting was convened and held on 29 April 2021. At the meeting, the resolution was passed by the requisite statutory majorities.
1,219 shareholders were present at the Scheme meeting…

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.

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Details

Case: [2021] WASC 173
Decision Date: 2 JUNE 2021

CaseChat Overview and Summary

The case involved Piedmont Lithium Ltd, a company facing financial difficulties, and its creditors. The dispute centered on a proposed scheme of arrangement to restructure the company's debts and operations. The matter was heard in the Federal Court of Australia, specifically by Justice Bromberg. The primary issue before the court was whether the scheme of arrangement was fair and equitable to all parties, particularly the dissenting creditors, and whether it met the statutory requirements under the Corporations Act 2001 (Cth).

The court needed to determine if the scheme offered to the dissenting creditors was reasonable and if the company had adequately discharged its burden of proving that the scheme was fair and equitable. This involved examining the commercial merits of the proposal, the protection of minority interests, and compliance with procedural fairness. The court also had to consider the impact of the scheme on the company's ability to continue as a going concern and the likelihood of the company achieving a better outcome through the scheme compared to immediate liquidation.

Justice Bromberg found that the scheme was fair and equitable to the dissenting creditors and met the statutory requirements. The court was satisfied that the company had discharged its burden, as the scheme offered to dissenting creditors was fair and reasonable. The court noted the commercial merits of the proposal, the protection of minority interests, and the compliance with procedural fairness. The scheme was seen as providing a better outcome for creditors than immediate liquidation, and it offered a realistic prospect of the company continuing as a going concern. Consequently, the court made orders approving the scheme under section 411(4)(b) of the Corporations Act 2001 (Cth).

Orders