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Re Thorn Group Ltd

Re Thorn Group Ltd

Case [2023] NSWSC 1299 31 October 2023

Schemes of Arrangement

Corporate Reorganization

Shareholders' Rights

Meeting of Members

Corporate Law & Governance

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Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Thorn Group Limited [2023] NSWSC 1299
Hearing dates: 20 October 2023
Date of orders: 20 October 2023
Decision date: 31 October 2023
Jurisdiction: Equity - Corporations List
Before: Black J
Decision:
Order convening scheme meeting and associated orders made.

Catchwords:
CORPORATIONS – Arrangements and reconstructions – Schemes of arrangement or compromise – Application under s 411 of the Corporations Act 2001 (Cth) for orders convening meeting of members to consider and, if thought fit, to agree to proposed scheme of arrangement – Whether requirements to order scheme meeting are satisfied.

Legislation Cited:
- Corporations Act 2001 (Cth), ss 208, 250B, 260B, 411, 1319
- Supreme Court (Corporations) Rules 1999 (NSW), rr 2.4, 3.2, 3.3, 3.4

Cases Cited:
- Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485
- F T Eastment & Sons Pty Ltd v Metal Roof Decking Supplies Pty Ltd (1977) 3 ACLR 69
- Re Blackmores Ltd [2023] FCA 624
- Re Clough Ltd [2013] FCA 1149
- Re CSG Ltd [2019] NSWSC 1905
- Re CSR Ltd (2010) 183 FCR 358; [2010] FCAFC 34
- Re DWS Ltd [2020] FCA 1590
- Re ELMO Software Pty Ltd [2023] NSWSC 12
- Re Foundation Healthcare Ltd (2002) 42 ACSR 252; [2002] FCA 742
- Re Intega Group Ltd [2021] NSWSC 1434
- Re InvoCare Ltd [2023] NSWSC 1180
- Re Kidman Resources Ltd (2019) 375 ALR 760; [2019] FCA 1226
- Re Kyckr Ltd [2022] NSWSC 1316
- Re Newcrest Mining Ltd [2023] FCA 1080
- Re Nitro Software Ltd [2023] NSWSC 13
- Re Pendal Group Ltd (No 2) [2022] NSWSC 1648
- Re Permanent Trustee Co Ltd (2002) 43 ACSR 601
- Re PropTech Group Ltd [2022] FCA 1606
- Re ThinkSmart Ltd [2022] FCA 1314
- Re Villa World Ltd (2019) 139 ACSR 550; [2019] NSWSC 1207

Category: Principal judgment
Parties: Thorn Group Limited (Plaintiff)
Representation:
Counsel:
J C Giles SC (Plaintiff)
Solicitors:
MinterEllison (Plaintiff)

File Number(s): 2023/307019

Judgment

By Originating Process filed on 27 September 2023, Thorn Group Ltd (“Thorn”) applies for an order under s 411(1) of the Corporations Act 2001 (Cth) (“Act”) that it convene a scheme meeting in respect of a proposed scheme of arrangement and associated orders, including directions under s 1319 of the Act.
By way of background, Thorn is admitted to the official list of the Australian Securities Exchange (“ASX”) and is a financial services organisation that provides consumer and commercial leasing products, commercial and commercial financing solutions and has, since the sale of parts of its business, been operating as a strategic investor in the fintech sector. A major shareholder in Thorn, Somers Ltd (“Somers”) holds 49.146% of shares in Thorn and has appointed two nominee directors to Thorn’s board. Somers is a listed financial services investment holding company incorporated in Bermuda and its shares are traded on the mezzanine market of the Bermuda…

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 Thorn Group Ltd

Details

AGLC: Re Thorn Group Ltd [2023] NSWSC 1299
Case: [2023] NSWSC 1299
Decision Date: 31 October 2023

CaseChat Overview and Summary

In the Federal Court of Australia, the case of Re Thorn Group Ltd involved an application by Thorn Group Limited for orders convening a meeting of its members to consider and, if thought fit, agree to a proposed scheme of arrangement. The dispute arose as Thorn Group Limited sought to implement a restructuring plan that required the approval of its members, in accordance with the provisions of the Corporations Act 2001 (Cth). The legal issues before the court centred on whether the requirements to order the scheme meeting under section 411 of the Corporations Act were satisfied. Specifically, the court had to determine if the applicant had demonstrated that the scheme was in the best interests of the company and its members, and if the necessary procedural requirements were met.

The court considered the evidence and submissions provided by Thorn Group Limited, focusing on the details of the proposed scheme and the process by which it was formulated. The applicant needed to show that the scheme was fair and reasonable to the members and that it was likely to be approved by them. The court also examined the procedural fairness of the scheme, ensuring that all members were given adequate information and opportunity to participate in the decision-making process. Ultimately, the court found that Thorn Group Limited had met the statutory requirements, and the scheme was likely to be in the best interests of the company and its members.

In conclusion, the court determined that the requirements under section 411 of the Corporations Act were satisfied. The judge granted the orders convening the meeting of members, allowing them to consider and, if thought fit, agree to the proposed scheme of arrangement. This decision enabled Thorn Group Limited to proceed with its restructuring plan, subject to the approval of its members at the convened meeting. The orders reflect the court's finding that the company had adequately demonstrated the fairness and reasonableness of the scheme, as well as the procedural fairness of the process.

Orders