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Re Sylvastate Ltd

Re Sylvastate Ltd

Case [2011] FCA 211 16 March 2011

Scheme of Arrangement

Jurisdiction

Bona Fide

Standing

Admissibility of Evidence

Corporate Law & Governance

Type to search within this case.

FEDERAL COURT OF AUSTRALIA
Sylvastate Limited, in the matter of Sylvastate Limited [2011] FCA 211

Citation: Sylvastate Limited, in the matter of Sylvastate Limited [2011] FCA 211

Parties: SYLVASTATE LIMITED (ACN 000 014 782)

File number: NSD 228 of 2011

Judge: STONE J

Date of judgment: 16 March 2011

Catchwords: CORPORATIONS – Corporations Act 2001 (Cth) – s 411(1) – scheme of arrangement – application for orders approving company convening meeting of shareholders to consider proposed scheme of arrangement and directions as to conduct of meeting

Legislation: Corporations Act 2001 (Cth) s 411

Cases cited: APN News & Media Limited (2007) 25 ACLC 784
Investa Properties Ltd [2007] FCA 1104
RePermanent Trustee Co Ltd (2003) 43 ACSR 601
Wattyl Limited, in the matter of Wattyl Limited [2010] FCA 854

Date of hearing: 10 March 2011

Place: Sydney

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 27

Counsel for the Plaintiff: M Oakes SC

Solicitor for the Plaintiff: DLA Phillips Fox Lawyers

Counsel for Whitefield Limited: A Zahra

Solicitor for Whitefield Limited: Anzarut & Holm Lawyers

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 228 of 2011

IN THE MATTER OF SYLVASTATE LIMITED (ACN 000 014 782)

Sylvastate Limited (ACN 000 014 782)
Plaintiff

JUDGE:

STONE J

DATE OF ORDER:

10 MARCH 2011

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1.Pursuant to s 411(1) Corporations Act 2001 (Cth), the plaintiff convene a meeting of members of the plaintiff (other than Whitefield Limited) (Members), for the purpose of considering and, if thought fit, agreeing (with or without modification) to the proposed scheme of arrangement between the plaintiff and its Members, being the scheme of arrangement substantially in the form set out in Appendix 3 of Exhibit 1 in the proceeding (Scheme Booklet).

2. The Scheme Booklet be approved for distribution to the Members.
3.The scheme meeting be held at Level 7, 20 Hunter Street, Sydney NSW 2000 on 15 April 2011 at 10.00 am.
4.David John Iliffe or, in his absence, Sam Armstrong, act as Chairperson of the scheme meeting.
5.The chairperson of the scheme meeting has the power to adjourn such meeting in his absolute discretion.
6.Regulations 5.6.12, and 5.6.14 to 5.6.36A, Corporations Regulations 2001 shall not apply to the scheme meeting.
7.The proceeding be stood over to 2.15 pm on 28 April 2011 before Stone J for the hearing of any application to approve the scheme of arrangement.

8. Liberty to restore on 2 days’ notice.
9. These orders be entered forthwith.
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 Federal Law Search on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 228 of 2011

IN THE MATTER OF SYLVASTATE LIMITED (ACN 000 014 782)

Sylvastate Limited (ACN 000 014 782)
Plaintiff

JUDGE:

STONE J

DATE:

16 MARCH 2011

PLACE:

SYDNEY

REASONS FOR JUDGMENT

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 Sylvastate Ltd

Details

AGLC: Re Sylvastate Ltd [2011] FCA 211
Case: [2011] FCA 211
Decision Date: 16 March 2011

CaseChat Overview and Summary

The case of Re Sylvastate Ltd involved an application by the plaintiff to convene a meeting of shareholders to consider a proposed scheme of arrangement under section 411(1) of the Corporations Act 2001 (Cth). The plaintiff sought orders approving the convening of the meeting and providing directions as to its conduct. The central issue before the court was whether the plaintiff had satisfied the legal requirements necessary for the approval of the scheme, including demonstrating that the scheme was bona fide and properly proposed, and that the Australian Securities and Investments Commission (ASIC) had been given an opportunity to examine the proposal.

The court considered the evidence presented and concluded that the plaintiff had met the necessary requirements for a first court hearing. Notably, the court was satisfied that the scheme was bona fide and properly proposed, and that ASIC had been provided with adequate notice and an opportunity to examine the proposal. ASIC had also provided a letter indicating it did not propose to appear at the first court hearing or oppose the scheme at that time. Based on this evidence and the reasons provided, the court granted the orders sought by the plaintiff.

The court's orders included convening a meeting of members to consider the proposed scheme, approving the scheme booklet for distribution to members, setting the date and location of the meeting, and appointing the chairperson of the meeting. The court also specified that certain regulations would not apply to the meeting and set a date for the hearing of any application to approve the scheme. The proceeding was to be stood over to allow for the consideration of the scheme's approval.

Orders

Orders of the court

1. Pursuant to s 411(1) Corporations Act 2001 (Cth), the plaintiff convene a meeting of members of the plaintiff (other than Whitefield Limited) (Members), for the purpose of considering and, if thought fit, agreeing (with or without modification) to the proposed scheme of arrangement between the plaintiff and its Members, being the scheme of arrangement substantially in the form set out in Appendix 3 of Exhibit 1 in the proceeding (Scheme Booklet).

2. The Scheme Booklet be approved for distribution to the Members.

3. The scheme meeting be held at Level 7, 20 Hunter Street, Sydney NSW 2000 on 15 April 2011 at 10.00 am.

4. David John Iliffe or, in his absence, Sam Armstrong, act as Chairperson of the scheme meeting.

5. The chairperson of the scheme meeting has the power to adjourn such meeting in his absolute discretion.

6. Regulations 5.6.12, and 5.6.14 to 5.6.36A, Corporations Regulations 2001 shall not apply to the scheme meeting.

7. The proceeding be stood over to 2.15 pm on 28 April 2011 before Stone J for the hearing of any application to approve the scheme of arrangement.

8. Liberty to restore on 2 days’ notice.

9. These orders be entered forthwith.

Note:

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

The Scheme provides that each Scheme Shareholder is deemed to have warranted that on the date of the transfer, all their shares will be “fully paid and free from all mortgages, charges, liens, encumbrances, pledges, security interests and other interests of third parties of any kind, whether legal or otherwise”. Provisions of that kind are common and have not been seen to constitute a problem: APN News & Media Limited at [57]–[63]; Investa Properties Ltd [2007] FCA 1104 at [21]. The warranty is disclosed in section 7.5 of the Scheme Booklet.Evidence necessary for a first court hearing I am satisfied from the evidence before me that the requirements necessary to be proved at a first court hearing in relation to an application under s 411(1) of the Corporations Act 2001 (Cth) have been met. In particular I am satisfied that the plaintiff is a Part 5.1 body, that the proposed Scheme is an “arrangement” within the meaning of s 411, that Mr Iliffe has consented to act as chairman of the meeting and Mr Armstrong has consented to act in his absence. I am satisfied that the Scheme is bona fide and properly proposed and that ASIC has been given an opportunity to examine the proposal and adequate notice of the first Court hearing date. The plaintiff has tendered a letter dated 9 March 2011 from ASIC stating that it does not propose to appear at the first Court hearing or to oppose the Scheme at that time. Conclusion On the basis of the evidence tendered at the hearing on 10 March 2010 and for the reasons given above, I made the orders sought by the plaintiff.

Decision

Reasons for decision

I am satisfied that the Scheme is bona fide and properly proposed and that ASIC has been given an opportunity to examine the proposal and adequate notice of the first Court hearing date. The plaintiff has tendered a letter dated 9 March 2011 from ASIC stating that it does not propose to appear at the first Court hearing or to oppose the Scheme at that time. Conclusion On the basis of the evidence tendered at the hearing on 10 March 2010 and for the reasons given above, I made the orders sought by the plaintiff.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Citations

AGLC Citation

Re Sylvastate Ltd [2011] FCA 211

Most Recent Citation

Re Tatts Group Ltd (No 2) [2017] VSC 770

Cases citing this decision · 9 of 9 shown

Duxton Dairies (Cobram) Pty Ltd, in the matter of Duxton Dairies (Cobram) Pty Ltd
[2025] FCA 1118 Para 22

…cal treatment but of commonality of interest: Re Hills Motorway Ltd [2002] NSWSC 897 at [12]; Re Wellcom Group Ltd [2019] FCA 1655; Re Sylvastate Ltd [2011] FCA 211 at [21]; Boart at [92]-[94], [99]. Courts have typically taken a cautious approach to fracturing classes: Re Opes Prime Stockbroking Ltd (2009) 179 F…
In the matter of Peak Rare Earths Limited
[2025] NSWSC 916 Para 42

…e test is not one of identical treatment but of community of interest ( Hills at [1 2]; Re Wellcom Group Ltd [2010] FCA 1655 at [42]; Re Sylvasta [2011] FCA 211 at [21], Boart at [92]-[94], [99]). Thirdly, the focus is not on differentiation but its effects ( Hills at [12]; Wattyl at [15]-[16]). Fourthly, courts…
Re PNX Metals Ltd
[2024] WASC 281 Para 1

…o be class creating where the shareholder has the same legal rights as all other target members under the proposed scheme.[33] [33] Re Sylvestate Ltd [2011] FCA 211 [5].…
Re Tatts Group Ltd (No 2)
[2017] VSC 770

…[64]See for example: Re Viscopy Limited [2017] NSWSC 1516 ( Viscopy ) at [12] (per Black J), Re Sylvastate Ltd [2011] FCA 211 and Re Linton Park Plc [2008] BCC 17.…
Re BIS Finance Pty Ltd
[2017] NSWSC 1713 Para 23

…ional Harvester Co of Australia Pty Ltd [1953] VLR 669 at 672; NRMA above at 628; Re AWB Ltd [2010] VSC 456 at [4]; Re Sylvastate Ltd [2011] FCA 211 at [25]; Atlas Iron at [38]–[39], [48]. Mr Sheahan points out, and I accept, that the Senior Scheme falls within that concept at least so far as it provides for a tr…
Re Boart Longyear Ltd
[2017] NSWSC 567 Para 69

…nce in legal rights, as distinct from a commercial interest, so as to require the creation of a separate class. The decision in Re Sylvastate Ltd [2011] FCA 211 at [22] involved a finding that there was no material difference in the interests of a shareholder from that of other shareholders, not a finding that an…
Sylvastate Limited, in the matter of Sylvastate Limited (No 2)
[2011] FCA 441 Para 2

…state will become a subsidiary of Whitefield. The details of the Scheme and my reasons for making those orders ( earlier reasons ) are to be found at [2011] FCA 211.…
Re RP Data Ltd
[2011] FCA 228 Para 1

…(2007) 62 ACSR 400 at 412-413. His Honour’s approach has been followed in numerous decisions of this Court. See for instance Re Sylvastate Limited [2011] FCA 211 at [24] Re Provet Holdings Ltd [2010] FCA 1388 at [14] and Re Adelaide Bank [2007] FCA 1582 at [33]. Proxies…
Re Tower Australia Group Ltd
[2011] FCA 224 Para 14

…(2007) 62 ACSR 400 at 412-413. His Honour’s approach has been followed in numerous decisions of this Court. See for instance Re Sylvastate Limited [2011] FCA 211 at [24] Re Provet Holdings Limited [2010] FCA 1388 at [14] and Re Adelaide Bank Limited [2007] FCA 1582 at [33].…

View all 9 citing cases →

Cases cited in this decision · 6 of 6 shown

Re Wattyl Ltd
[2010] FCA 854 Para 21

…In Wattyl Limited, in the matter of Wattyl Limited [2010] FCA 854 I considered the issues involved in determining whether fully paid shareholders and partly paid shareholders asked to vote in respect of a proposed scheme of arrangement comprised one or two classes. In relation to those circumstances I said at [15…
Re Investa Properties Ltd
[2007] FCA 1104 Para 3

…rovisions of that kind are common and have not been seen to constitute a problem: APN News & Media Limited at [57]–[63]; Investa Properties Ltd [2007] FCA 1104 at [21]. The warranty is disclosed in section 7.5 of the Scheme Booklet. Evidence necessary for a first court hearing…
Re Permanent Trustee Co Ltd
[2002] NSWSC 1177 Para 17

…In an application under s 411, the plaintiff has a duty of disclosure as described by Barrett J in Re Permanent Trustee Co Ltd (2003) 43 ACSR 601 at [7]: The fact that the application is ex parte is not without some significance. The absence of any defendant or contradictor sharpens the duty of the [plaintiff]. While…
Re Hills Motorway Ltd
[2002] NSWSC 897 Para 21

…erest”; Sovereign Life Assurance Company v Dodd [1892] 2 QB 573 at 583 per Bowen LJ. As Barrett J commented in Re Hills Motorway Management Ltd (2002) 43 ACSR 101 at 104: The test is thus not one of identical treatment. It is one of community of interest. The court must ask itself whether the rights and entitlements…
Re Australian Co-operative Foods Ltd
[2001] NSWSC 382 Para 21

…meeting in respect of groups which in fact have the requisite community of interest; Application of Australian Co-operative Foods Ltd (2001) 38 ACSR 71 at 88 per Santow J.…
[1892] 2 QB 573
[1892] 2 QB 573 Para 21

…different “as to make it impossible for them to consult together with a view to their common interest”; Sovereign Life Assurance Company v Dodd [1892] 2 QB 573 at 583 per Bowen LJ. As Barrett J commented in Re Hills Motorway Management Ltd (2002) 43 ACSR 101 at 104: The test is thus not one of identical treatment.…

Legislation cited in this decision · 2

Corporations Act 2001 (Cth)
411 2 mentions (from Para 1)
Corporations Regulations 2001 (Cth)
1 mention

Citation:		Sylvastate Limited, in the matter of Sylvastate Limited [2011] FCA 211
Parties:		SYLVASTATE LIMITED (ACN 000 014 782)
File number:		NSD 228 of 2011
Judge:		STONE J
Date of judgment:		16 March 2011
Catchwords:		CORPORATIONS – Corporations Act 2001 (Cth) – s 411(1) – scheme of arrangement – application for orders approving company convening meeting of shareholders to consider proposed scheme of arrangement and directions as to conduct of meeting
Legislation:		Corporations Act 2001 (Cth) s 411
Cases cited:		APN News & Media Limited (2007) 25 ACLC 784 Investa Properties Ltd [2007] FCA 1104 RePermanent Trustee Co Ltd (2003) 43 ACSR 601 Wattyl Limited, in the matter of Wattyl Limited [2010] FCA 854
Date of hearing:	10 March 2011
Place:	Sydney
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	27
Counsel for the Plaintiff:	M Oakes SC
Solicitor for the Plaintiff:	DLA Phillips Fox Lawyers
Counsel for Whitefield Limited:	A Zahra
Solicitor for Whitefield Limited:	Anzarut & Holm Lawyers

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 228 of 2011

JUDGE:	STONE J
DATE OF ORDER:	10 MARCH 2011
WHERE MADE:	SYDNEY

JUDGE:	STONE J
DATE:	16 MARCH 2011
PLACE:	SYDNEY