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Re Simeon Wines Ltd

Re Simeon Wines Ltd

Case [2002] SASC 204 21 June 2002

Scheme of Arrangement

Approval of Scheme

Fairness and Reasonableness

Corporate Law & Governance

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SIMEON WINES LTD
[2002] SASC 204
Civil (Ex Tempore)

LANDER J. This is an application by Simeon Wines Ltd to approve a scheme of arrangement made between it and its members at a meeting convened pursuant to an order made by this court on 8 May 2002.
The application is made pursuant to s 411 of the Corporations Act 2001 (Cth) (the Act) which is contained in Part 5.1 of the Act. Section 411(1) allows the court, on the application of a Part 5.1 body, to order a meeting of the members of the body to be convened in such manner and to be held in such place or places as the court directs for the purpose of approving any scheme of arrangement.
On 10 April 2002 Simeon Wines applied to this Court for an order for the convening of such a meeting in order to propose to its members a scheme of arrangement which it had entered into with Brian McGuigan Wines Ltd.
An order was made by a Master of this Court on 7 May 2002. The orders were:
“1.That the plaintiff shall summon and convene a meeting (“the Meeting”) of all of the members of the plaintiff for the purpose of considering, and if it thought fit, agreeing (with or without modification) to a Scheme of Arrangement to be made between the plaintiff and its members the terms of which are set forth in an [explanatory memorandum annexed to the order]...
2.That the Meeting be held on 14th June 2002 at the Adelaide Convention Centre…
3.     That the Meeting be convened by sending on or before 15 May 2002;
(i)     a written notice in the form or to the effect of the Notice of Meeting set forth in the document annexed [to the order which was a notice convening the Meeting]…
(ii)    The form of proxy, the form of which is set forth in the document, [also annexed to the order].
4.     That each Notice sent to convene the Meeting should be accompanied by the following:
(i)     a copy of the Explanatory Statement… subject to the correction of typographical errors and the inclusion of information that cannot be established prior to the sealing of the order…
(ii)   such additional information as ought to be given to members of the plaintiff in relation to any event which may occur after the making of this order and before the despatch of the Notice.
5.That… the Meeting be convened and conducted in accordance with the Constitution of the plaintiff.
6.That Mr John Gilbert Branson, or failing him Mr Neil Ronald MacKenzie, be the Chairman of Meeting.”
That application and that order are the initiating proceedings in relation to an application under s411(6) of the Act for the approval of this Court to a compromise or arrangement under s411(1) of the Act.
The plaintiff has, for the purpose of this application, relied upon an affidavit of Mr Noack, company secretary of the plaintiff. It has also relied upon oral…

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 Simeon Wines Ltd

Details

AGLC: Re Simeon Wines Ltd [2002] SASC 204
Case: [2002] SASC 204
Decision Date: 21 June 2002

CaseChat Overview and Summary

Simeon Wines Ltd applied to the South Australian Supreme Court for approval of a scheme of arrangement between the company and its members, pursuant to s 411 of the Corporations Act 2001 (Cth). The court had previously ordered a meeting of the members to consider the scheme, which was proposed to facilitate a merger with Brian McGuigan Wines Ltd. The application required the court to determine whether the scheme complied with procedural requirements and was fair and reasonable to the members.

The primary legal issues were whether the procedural requirements of the Corporations Act were satisfied and whether the scheme was fair and reasonable to the members. The court considered whether the meeting was properly convened and held, and if the requisite majority of members had approved the scheme. Additionally, the court had to ensure that the scheme did not enable any person to avoid the operation of any provisions of Chapter 6 of the Act, and that ASIC had no objection to the arrangement.

The court found that all procedural requirements had been met, as evidenced by the affidavit of the company secretary and the attendance and voting of members. The court also found that the scheme was fair and reasonable to the shareholders, based on the independent expert’s report and the substantial majority of votes in favor of the scheme. The court noted that ASIC had no objection to the arrangement. The court was satisfied that the scheme would benefit the shareholders of both companies and increase earnings per share for Simeon Wines Ltd shareholders.

In light of these findings, the court approved the scheme of arrangement, allowing Simeon Wines Ltd to become a subsidiary of Brian McGuigan Wines Ltd. The court also noted that the scheme would need to comply with United States securities laws, and that the company intended to seek an exemption under the Securities Act 1933. The court made an order approving the scheme of arrangement as set forth in the explanatory statement annexed to the affidavit of Michael Heinz Noack.

Orders