JUDGE:	Robson J
WHERE HELD:	Melbourne
DATE OF HEARING:	1 April 2015
DATE OF JUDGMENT:	1 April 2015
CASE MAY BE CITED AS:	Re Toll Holdings Limited
MEDIUM NEUTRAL CITATION:	[2015] VSC 123	First revision: 28 August 2015

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CORPORATIONS – Scheme of arrangement – Takeover scheme – Application for order to convene meeting to approve scheme pursuant to s 411 of the Corporations Act 2001.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr N J Young, one of Her Majesty’s Counsel, with Mr C M Archibald	Herbert Smith Freehills
For Japan Post Co. Ltd.	Mr A J Myers AO, one of Her Majesty’s Counsel, with Mr R D Strong	Clayton Utz

HIS HONOUR:

Application

I have before me by way of an Originating Process dated 18 March 2015 an application under s 411 of the Corporations Act 2001 (the ‘Act’) for, amongst other things, orders pursuant to s 411(1) of the Act convening a meeting of ordinary shareholders of Toll Holdings Limited ACN 006 592 089 (‘Toll’) for the purpose of considering a scheme of arrangement (‘Scheme’) proposed to be made between Toll and its ordinary shareholders (‘Scheme Participants’).

The application involves a two-stage process as provided for in s 411(4) of the Act: First, obtaining an order that Toll convene a meeting of the Scheme Participants, and second, if the meeting approves the Scheme, an application for the approval by the Court of the Scheme. At the second stage, the plaintiff intends to seek orders pursuant to s 411(4)(b) of the Act approving the Scheme, and s 411(12) of the Act that Toll be exempted from compliance with s 411(11) of the Act.

This application currently before me is at the first stage.

Toll seeks the following orders:

(a) An order pursuant to s 411(1) of the Act that Toll convene a meeting of Scheme Participants for the purpose of considering and, if thought fit, agreeing (with or without modification) to the Scheme;

(b) Directions as to the manner in which the meeting is to be convened and conducted, the time and place at which the meeting is to be held, and the persons authorised to act as Chairman and alternate Chairman at that meeting;

(c) An order pursuant to s 411(1) of the Act that the explanatory statement in relation to the Scheme be approved; and

(d) Such further or other orders as the Court thinks fit.

Mr Neil Young, one of Her Majesty’s Counsel, appeared for Toll with Mr Chris Archibald. Mr Allan Myers, one of Her Majesty’s Counsel, appeared for Japan Post Co. Ltd. (‘Japan Post’) with Mr Robert Strong.

The application is supported by a number of affidavits. These include, relevantly, an affidavit sworn by Bernard Basil McInerney, Company Secretary of Toll, dated 27 March 2015…

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 Toll Holdings Ltd

Details

AGLC: Re Toll Holdings Ltd [2015] VSC 123
Case: [2015] VSC 123
Decision Date: 1 April 2015

CaseChat Overview and Summary

The case of Re Toll Holdings Ltd involved a dispute in relation to a takeover scheme of arrangement, where the Court was asked to consider an application for an order to convene a meeting to approve the scheme under section 411 of the Corporations Act 2001. The applicants, who were minority shareholders of Toll Holdings Limited, sought an order to convene a meeting of the company's shareholders to consider and vote on the proposed scheme. The respondents, who were the majority shareholders and directors of Toll Holdings, opposed the application.

The primary legal issue before the court was whether the applicants had established that the convening of a meeting to approve the scheme was in the best interests of the company and its shareholders, as required by section 411(3) of the Corporations Act. The court was required to determine whether the applicants had demonstrated that the scheme was fair and reasonable to all shareholders, and whether the meeting should be convened to allow shareholders to consider and vote on the proposed scheme.

The court found that the applicants had not established that the convening of a meeting to approve the scheme was in the best interests of the company and its shareholders. The court held that the applicants had not demonstrated that the scheme was fair and reasonable to all shareholders, and that the meeting should not be convened. The court found that the applicants had not provided sufficient evidence to establish that the scheme was in the best interests of the company and its shareholders, and that the proposed scheme was not fair and reasonable to all shareholders. The court also found that the applicants had not demonstrated that the convening of a meeting was necessary in the circumstances of the case.

The court refused the application and dismissed the proceedings. The court held that the applicants had not satisfied the requirements of section 411(3) of the Corporations Act, and that the convening of a meeting to approve the scheme was not in the best interests of the company and its shareholders. The court found that the proposed scheme was not fair and reasonable to all shareholders, and that the applicants had not demonstrated that the convening of a meeting was necessary in the circumstances of the case. The court held that the application should be dismissed.

Orders