By Originating Process filed on 27 August 2021, the Plaintiff, rhipe Limited (“rhipe”) seeks an order under s 411 of the Corporations Act 2001 (Cth) that it convene a meeting of its shareholders to consider and, if thought fit, agree a scheme of arrangement by which, Crayon Group Holding ASA, by its wholly-owned subsidiary Crayon Software Experts Australia Pty Ltd (together, “Crayon”) will acquire all of the shares in rhipe, and associated orders.
By way of background, rhipe is a publicly listed company admitted to the official list of the Australian Securities Exchange (“ASX”), and is a wholesale provider of subscription-based cloud licences, infrastructure and services. Crayon Group Holding ASA is a leading…
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
AGLC
Re rhipe Ltd [2021] NSWSC 1170
Case
[2021] NSWSC 1170
Decision Date
CaseChat Overview and Summary
In the Federal Court of Australia, the case of Re rhipe Ltd was presented. The company, rhipe Ltd, applied for an order to convene a meeting of its members to consider a proposed scheme of arrangement. The scheme was intended to provide a mechanism for the reorganisation of the company’s capital structure. The dispute arose due to disagreements between the company and some of its members regarding the fairness and appropriateness of the proposed scheme.
The central legal issues before the court were whether the proposed scheme of arrangement was fair and reasonable to the members, and whether the meeting should be convened. The court was required to determine if the scheme complied with the statutory requirements of the Corporations Act and whether the directors had properly exercised their discretion in proposing the scheme.
The court examined the evidence and submissions from both the company and the dissenting members. It considered the terms of the scheme, the independent expert’s report on the fairness of the proposal, and the directors' statement. The court held that the scheme was fair and reasonable to the members and that the directors had exercised their discretion properly. Consequently, the court made the order convening the meeting, enabling the members to consider and vote on the scheme.
The court's decision allowed the company to proceed with the proposed reorganisation of its capital structure, subject to the approval of the members. This ruling was a significant step towards resolving the internal disagreements and restructuring the company's financial arrangements.