JUDGE:	Sifris J
WHERE HELD:	Melbourne
DATE OF HEARING:	13 December 2017
DATE OF JUDGMENT:	20 December 2017
CASE MAY BE CITED AS:	In the matter of Tatts Group Limited (No 2)
MEDIUM NEUTRAL CITATION:	[2017] VSC 770

---

CORPORATIONS – Scheme of arrangement – Whether appropriate to approve Scheme – Amendment to the Scheme – Procedural irregularities – Adequacy of disclosure – Final disclosure in many cases less than 10 days before meeting – Low voter turnout – All conditions precedent fulfilled – Scheme approved – s 411 Corporations Act 2001 (Cth).

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	P. D. Crutchfield QC with E. R. Tadros	Clayton Utz
For Tabcorp	A. C. Archibald QC with C. Archibald	Herbert Smith Freehills

HIS HONOUR:

A Introduction

By originating process dated 7 July 2017 filed under the Supreme Court (Corporations) Rules 2013 (Vic) (Rules), the plaintiff (Tatts) sought orders for a meeting of its members (Shareholders) to be convened and held to consider and, if thought fit, to approve a proposed scheme of arrangement (Scheme) between Tatts and its shareholders (Scheme Meeting).[1]
[1]The orders were sought pursuant to s 411 of the Corporations Act 2001 (Cth) (Act).

The commercial purpose of the Scheme is to give effect to the merger of Tatts and Tabcorp Holdings Limited (Tabcorp) by the acquisition of all of the shares in Tatts by Tabcorp in exchange for shares in Tabcorp and cash.[2]
[2]Details of the Scheme are set out in the affidavit of Anne Elizabeth Tucker sworn 6 September 2017 (Second Tucker Affidavit) and in the Scheme Booklet at tab 3 of exhibit AET-7 to the fourth affidavit of Anne Elizabeth Tucker sworn 28 September 2017 (Fourth Tucker Affidavit).

On 8 September 2017, I ordered that Tatts convene and hold a Scheme Meeting on 18 October 2017 to consider and, if thought fit, approve the Scheme, and that the further hearing of the originating process be adjourned to Associate Justice Randall on 23 October 2017 and to me on 24 October 2017 (First Orders).[3]
[3]On 18 September 2017 I published reasons for my decision, [2017] VSC 552. In approving the Scheme I have also had regard to those reasons (Reasons).

On 28 September 2017, I ordered that the Scheme Meeting be adjourned to 30 November 2017, and that the further hearing of the originating process be adjourned to Associate Justice Gardiner on 4 December 2017 and me on 5 December 2017 (Second Orders). The adjournment, pursuant to s 1319 of the Act, was necessary because of outstanding competition issues.[4]
[4]I refer to paragraphs [20]-[22] of the Reasons.

On 28 November 2017, I…

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 Tatts Group Ltd (No 2)

Details

AGLC: Re Tatts Group Ltd (No 2) [2017] VSC 770
Case: [2017] VSC 770
Decision Date: 20 December 2017

CaseChat Overview and Summary

The matter before the court involved the consideration of a scheme of arrangement proposed by Tatts Group Limited. The court was tasked with deciding whether the scheme should be approved, taking into account the procedural irregularities, adequacy of disclosure, and other factors. This case highlights the complexity of corporate restructuring and the court’s role in ensuring fairness and compliance with statutory requirements. The legal issues centred on whether the procedural irregularities and inadequate disclosure were significant enough to prevent the approval of the scheme. The court had to balance these concerns against the fact that all conditions precedent had been met and the benefits of the scheme for creditors and other stakeholders.

The court’s analysis revealed that while there were procedural irregularities and instances of late disclosure, these did not undermine the overall fairness of the scheme. The irregularities, though present, were not so severe as to render the process unfair. Moreover, the court noted that the low voter turnout did not impact the validity of the approval process. The court held that the procedural shortcomings did not outweigh the fulfilment of all conditions precedent and the benefits that the scheme would bring to the company’s creditors and other stakeholders. Consequently, the court determined that the scheme should be approved.

The reasoning of the court was grounded in the statutory framework provided by the Corporations Act 2001. The court considered the specific provisions of section 411, which allows for the approval of schemes of arrangement under certain conditions. The court held that, despite the procedural issues, the scheme met the necessary criteria for approval. The final orders of the court reflected this conclusion, approving the scheme of arrangement proposed by Tatts Group Limited.

Orders