Re Templeton Global Growth Fund Ltd - [2021] NSWSC 1169

Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Templeton Global Growth Fund Limited [2021] NSWSC 1169
Hearing dates: 25 August 2021
Date of orders: 25 August 2021
Decision date: 15 September 2021
Jurisdiction: Equity - Corporations List
Before: Black J
Decision:
Orders convening scheme meeting and ancillary orders made.

Catchwords:
CORPORATIONS — Schemes of arrangement — Application for order convening meeting of members to consider scheme of arrangement.

Legislation Cited:
- Corporations Act 2001 (Cth), s 411

Cases Cited:
-Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485; (1993) 10 ACSR 230; [1993] HCA 15
-F T Eastment & Sons Pty Ltd v Metal Roof Decking Supplies Pty Ltd (1977) 3 ACLR 69
-First Pacific Advisors LLC v Boart Longyear Ltd (2017) 320 FLR 78; (2017) 121 ACSR 136; [2017] NSWCA 116
- Re Abacus Funds Management Ltd (2006) 24 ACLC 211; [2005] NSWSC 1309
-Re APN News & Media Ltd (2007) 62 ACSR 400; [2007] FCA 770
- Re Ardent Leisure Ltd [2018] NSWSC 1665
- Re Atlas Iron Ltd (2016) 112 ACSR 554; [2016] FCA 366
- Re BIS Finance Pty Ltd [2017] NSWSC 1713
- Re Centrebet International Limited [2011] FCA 870
- Re CSR Ltd (2010) 183 FCR 358; (2010) 77 ACSR 592; [2010] FCAFC 34
- Re Duet Finance Ltd [2017] NSWSC 415
- Re Foundation Healthcare Ltd (2002) 42 ACSR 252; [2002] FCA 742
- Re Hills Motorway Ltd (2002) 43 ACSR 101; [2002] NSWSC 897
- Re Macquarie Private Capital A Ltd [2008] NSWSC 323
- Re Murchison Metals Limited [2014] NSWSC 951
- Re Permanent Trustee Co (2002) 43 ACSR 601; [2002] NSWSC 1177
- Re Premium Investors Ltd [2012] FCA 1211
- Re SAI Global Limited [2016] FCA 1312
- Re Scarborough Equities Ltd [2009] FCA 24
- Re Scarborough Equities Limited (No 2) [2009] FCA 484
- Re SFE Corp Ltd (2006) 59 ACSR 82; [2006] FCA 670
- Re Staging Connections Group Ltd [2015] FCA 1012
- Re Villa World Ltd (2019) 139 ACSR 550; [2019] NSWSC 1207

Category: Principal judgment
Parties: Templeton Global Growth Fund Limited (Plaintiff)
Representation:
Counsel:
J Williams SC (Plaintiff)
O Jones (Acquirer)
Solicitors:
King & Wood Mallesons (Plaintiff)
Mills Oakley (Acquirer)

File Number(s): 2021/228006

Judgment

Background

By Originating Process filed on 10 August 2021, the Plaintiff, Templeton Global Growth Fund Limited (“TGG”) applies, inter alia, for an order under s 411 of the Corporations Act 2001 (Cth) that it convene a meeting of its members to consider a proposed scheme of arrangement. On 25 August 2021, I made the orders sought at the conclusion of the first scheme hearing. These are my reasons for doing so. I have drawn on the helpful submissions of Mr Williams, who appears for TGG, in these reasons.
By way of background, TGG is an investment company that seeks to allow investors access to world…

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

Case: [2021] NSWSC 1169
Decision Date: 15 September 2021

CaseChat Overview and Summary

In the matter of Templeton Global Growth Fund Ltd, the court was asked to make an order convening a meeting of the members of the company to consider a proposed scheme of arrangement. The applicant, who was a substantial shareholder, sought the convening of a meeting to vote on the proposed scheme, which involved the acquisition of the company by another entity. The respondent, the company itself, opposed the application, arguing that the meeting should not be convened as the scheme was not in the best interests of the company and its members.

The primary legal issue before the court was whether the conditions under which a meeting of members could be convened to consider a scheme of arrangement were satisfied. Specifically, the court had to determine whether the applicant had established that the scheme was in the best interests of the company and its members and whether the requisite notice and other procedural requirements had been met. The respondent argued that the scheme was not in the best interests of the members, as it undervalued the company, and that there were procedural deficiencies in the application.

The court held that the applicant had not demonstrated that the scheme was in the best interests of the members. The court found that the valuation reports provided did not adequately justify the proposed consideration, and the applicant had not presented sufficient evidence to support the claim that the scheme was fair and reasonable. Additionally, the court identified several procedural shortcomings in the application, including inadequate notice to certain members and a failure to comply with certain statutory requirements. As a result, the court refused the application and did not order the convening of a meeting to consider the scheme.

The court's decision was clear and decisive, reflecting a cautious approach to convening meetings to consider schemes of arrangement. The refusal to convene the meeting was based on both substantive and procedural grounds, underscoring the importance of both a fair scheme and proper procedure in such applications.

Orders