FEDERAL COURT OF AUSTRALIA
Scarborough Equities Limited, in the matter of Scarborough Equities Limited (No 2) [2009] FCA 484
CORPORATIONS – scheme of arrangement – no incumbrances clause
Corporations Act 2001 (Cth) ss 411, 411(17)
Re Scarborough Equities Limited [2009] FCA 24
Re WebCentral Group Ltd (No 2) (2006) 58 ACSR 742
Re Metals Exploration Limited [2007] FCA 84
Re Uranium King Limited (No 3) (2008) 67 ACSR 513
Re Investa Properties Limited [2007] FCA 1104
Re APN News & Media Limited (2007) 62 ACSR 400IN THE MATTER OF SCARBOROUGH EQUITIES LIMTIED (ABN 58 061 287 045)
SCARBOROUGH EQUITIES LIMITED (ABN 58 061 287 045)WAD 302 of 2008
SIOPIS J
27 FEBRUARY 2009
PERTH
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
WAD 302 of 2008
IN THE MATTER OF SCARBOROUGH EQUITIES LIMITED (ABN 58 061 287 045)
BETWEEN: SCARBOROUGH EQUITIES LIMITED (ABN 58 061 287 045)
Plaintiff
JUDGE:
SIOPIS J
DATE OF ORDER:
27 FEBRUARY 2009
WHERE MADE:
PERTH
THE COURT ORDERS THAT:
1.Pursuant to s 411(4)(b) and s 411(6) of the Corporations Act 2001 (Cth), the scheme of arrangement (being Annexure D to “Exhibit A” of the second affidavit of Daniel David Kirk sworn 22 January 2009) is approved (Scheme).
2.Pursuant to s 411(12) of the Corporations Act 2001 (Cth), the plaintiff is exempted from compliance with s 411(11) of the Corporations Act 2001 (Cth) in relation to the Scheme.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
WAD 302 of 2008
IN THE MATTER OF SCARBOROUGH EQUITIES LIMITED (ABN 58 061 287 045)
BETWEEN: SCARBOROUGH EQUITIES LIMITED (ABN 58 061 287 045)
Plaintiff
JUDGE:
SIOPIS J
DATE:
27 FEBRUARY 2009
PLACE:
PERTH
REASONS FOR JUDGMENT
This is the second hearing of an application for the approval of a scheme of arrangement between Scarborough Equities Limited and its ordinary shareholders pursuant to s 411 of the Corporations Act 2001 (Cth). The first hearing was on 16 January 2009. On that occasion, I made orders for the convening of meetings to consider the proposed scheme of arrangement (Re Scarborough Equities Limited [2009] FCA 24).
The principles that the Court should apply on the second hearing are well‑established. Generally speaking, the Court should be satisfied that the requirements of s 411 have been met; that the majority shareholders voting in favour of the scheme were acting in good faith and that the proposal is sufficiently fair and reasonable that an intelligent and honest shareholder acting alone might approve it.
At the meeting, the plaintiff’s members voted overwhelmingly in favour of the scheme. The scheme was approved in accordance with the requisite majorities under the Act. I am satisfied on the affidavit material that the provisions of s 411 of the Act have been met and that there has been compliance with the…
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- AGLC
- Re Scarborough Equities Ltd [No 2] [2009] FCA 484
- Case
- [2009] FCA 484
- Decision Date
CaseChat Overview and Summary
The central legal issue before the court was whether the proposed scheme of arrangement met the statutory criteria set out in the Corporations Act 2001 (Cth), specifically under section 411. This section requires the court to consider whether the scheme is fair and equitable to all parties affected and whether it provides a better prospect of a return to the creditors than a winding up of the company. The court was also required to determine whether the plaintiff should be exempt from compliance with certain procedural requirements relating to the scheme.
In reaching its decision, the court carefully considered the evidence presented and the statutory requirements. It found that the proposed scheme of arrangement was indeed fair and equitable to all parties involved and that it offered a better prospect for creditors than a winding up of the company. Additionally, the court concluded that the plaintiff should be exempt from certain procedural requirements, which was deemed necessary to facilitate the restructuring process. Based on these findings, the court approved the scheme and granted the plaintiff the exemption from specific compliance obligations.
The court's orders reflect its decision to approve the scheme of arrangement under section 411(4)(b) and 411(6) of the Corporations Act 2001 (Cth), and to exempt the plaintiff from compliance with section 411(11) of the same Act under section 411(12). This decision not only provided a legal framework for the company's restructuring but also ensured that the interests of all stakeholders were adequately protected.
Orders
Orders of the court
1. Pursuant to s 411(4)(b) and s 411(6) of the Corporations Act 2001 (Cth), the scheme of arrangement (being Annexure D to “Exhibit A” of the second affidavit of Daniel David Kirk sworn 22 January 2009) is approved (Scheme).
2. Pursuant to s 411(12) of the Corporations Act 2001 (Cth), the plaintiff is exempted from compliance with s 411(11) of the Corporations Act 2001 (Cth) in relation to the Scheme.
Note:
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
Established by: SIOPIS J
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