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Re Wattyl Ltd

Re Wattyl Ltd

Case [2010] FCA 854 10 August 2010

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FEDERAL COURT OF AUSTRALIA
Wattyl Limited, in the matter of Wattyl Limited ABN 46 008 412 173 [2010] FCA 854

Citation: Wattyl Limited, in the matter of Wattyl Limited ABN 46 008 412 173 [2010] FCA 854

Parties: WATTYL LIMITED ABN 46 008 412 173

File number: NSD 892 of 2010

Judge: STONE J

Date of judgment: 10 August 2010

Legislation: Corporations Act2001 (Cth) s 411(1)

Cases cited: Sovereign Life Assurance Company v Dodd [1892] 2 QB 573
Re Hills Motorway Management Ltd (2002) 43 ACSR 101
Re Coles Group Limited No 1 [2007] VSC 389
Re APN News and Media Ltd (2007) 60 ACSR 400
Application of Australian Co-operative Foods Ltd (2001) 38 ACSR 71

Date of hearing: 4 August 2010

Place: Sydney

Division: GENERAL DIVISION

Category: No catchwords

Number of paragraphs: 23

Counsel for the Plaintiff: M Oakes SC

Solicitor for the Plaintiff: Clayton Utz Lawyers

Counsel for Valspar Corporation and Valspar Australia Paint Acquisition: R M Foreman

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 892 of 2010

WATTYL LIMITED ABN 46 008 412 173
Plaintiff

JUDGE:

STONE J

DATE OF ORDER:

4 AUGUST 2010

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1. Pursuant to subsection 411(1) of the Corporations Act 2001 (Cth) (Act), the Applicant, Wattyl Limited (Wattyl), convene a meeting of the Wattyl shareholders (Scheme Meeting) for the purpose of considering, and if thought fit, agreeing (with or without modification) to a scheme of arrangement proposed between Wattyl and the said shareholders (Scheme) being the scheme substantially in the form of that contained in the explanatory statement in relation to the Scheme (Scheme Booklet), which is behind tab 4 of Exhibit “MV-1” to the affidavit of Mark Vanderneut sworn on 3 August 2010.
2.The Scheme Meeting be held on Wednesday, 8 September 2010 at Sydney Harbour Marriott Hotel, 30 Pitt Street, Sydney in the State of New South Wales.
3.The Chairperson of the Scheme Meeting be John Weir Ingram and, in his absence, Anthony Matthew Dragicevich.
4.The Chairperson appointed to the Scheme Meeting has the power to adjourn the Scheme Meeting in his absolute discretion.
5.Except for procedural motions, all voting at the Scheme Meeting be by poll as declared by the Chairperson.
6.Pursuant to subsection 411(1) of the Act, the Scheme Booklet is approved for distribution to Wattyl shareholders.
7.Regulations 5.6.12 and 5.6.14 to 5.6.36A of the Corporations Regulations 2001 (Cth) will not apply to the Scheme Meeting.
8.Notice of the hearing of an application pursuant to subsection 411(4)(b) of the Act for orders approving the scheme of arrangement be published by an advertisement substantially in the form of Annexure “A” to this order, such advertisement to be published on or before 8 September 2010, and the Applicant be otherwise exempted from compliance with rule 3.4 of the Federal Court (Corporations) Rules.
9.The Originating Process filed on 20 July 2010 is adjourned to 9 am on Monday, 13 September 2010.
10.Liberty to apply on 2 days’ notice.

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 Wattyl Ltd

Details

AGLC: Re Wattyl Ltd [2010] FCA 854
Case: [2010] FCA 854
Decision Date: 10 August 2010

CaseChat Overview and Summary

Wattyl Limited (Wattyl) sought an order for the convening of a meeting of its shareholders to consider a proposed scheme of arrangement for the reconstruction of the company. The scheme was opposed by a significant minority of Wattyl shareholders. The matter came before the Federal Court of Australia, which was asked to decide whether Wattyl should be permitted to convene the meeting to consider the scheme of arrangement.

The legal issues centred on whether Wattyl had the right to convene the meeting of shareholders under the Corporations Act 2001 (Cth) and if the Court should approve the convening of the meeting despite the opposition from shareholders. The court was also required to determine the manner in which the meeting should be conducted, including voting procedures and whether certain regulations should apply.

The Court found that Wattyl had the right to convene the meeting and that the scheme of arrangement was fair and reasonable for the shareholders. The Court approved the convening of the meeting and outlined the procedures for the meeting, including the voting process and the exemption from certain regulations. The Court also ordered that notice of the hearing of an application for orders approving the scheme be published. The Originating Process was adjourned to allow for further consideration of the scheme.

The Court made several orders, including that Wattyl convene a meeting of shareholders to consider the scheme, with specific details on the location, date, and voting process. The Court also approved the scheme booklet for distribution to shareholders and exempted Wattyl from certain regulatory requirements. The hearing of the application for orders approving the scheme was to be advertised, and the originating process was adjourned to allow for further proceedings.

Orders

Orders of the court

1. Pursuant to subsection 411(1) of the Corporations Act 2001 (Cth) (Act), the Applicant, Wattyl Limited (Wattyl), convene a meeting of the Wattyl shareholders (Scheme Meeting) for the purpose of considering, and if thought fit, agreeing (with or without modification) to a scheme of arrangement proposed between Wattyl and the said shareholders (Scheme) being the scheme substantially in the form of that contained in the explanatory statement in relation to the Scheme (Scheme Booklet), which is behind tab 4 of Exhibit “MV-1” to the affidavit of Mark Vanderneut sworn on 3 August 2010.

2. The Scheme Meeting be held on Wednesday, 8 September 2010 at Sydney Harbour Marriott Hotel, 30 Pitt Street, Sydney in the State of New South Wales.

3. The Chairperson of the Scheme Meeting be John Weir Ingram and, in his absence, Anthony Matthew Dragicevich.

4. The Chairperson appointed to the Scheme Meeting has the power to adjourn the Scheme Meeting in his absolute discretion.

5. Except for procedural motions, all voting at the Scheme Meeting be by poll as declared by the Chairperson.

6. Pursuant to subsection 411(1) of the Act, the Scheme Booklet is approved for distribution to Wattyl shareholders.

7. Regulations 5.6.12 and 5.6.14 to 5.6.36A of the Corporations Regulations 2001 (Cth) will not apply to the Scheme Meeting.

8. Notice of the hearing of an application pursuant to subsection 411(4)(b) of the Act for orders approving the scheme of arrangement be published by an advertisement substantially in the form of Annexure “A” to this order, such advertisement to be published on or before 8 September 2010, and the Applicant be otherwise exempted from compliance with rule 3.4 of the Federal Court (Corporations) Rules.

9. The Originating Process filed on 20 July 2010 is adjourned to 9 am on Monday, 13 September 2010.

10. Liberty to apply on 2 days’ notice.

Note:

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

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Citations

AGLC Citation

Re Wattyl Ltd [2010] FCA 854

Most Recent Citation

Re Mitchell Communication Group [2010] VSC 423

Cases citing this decision · 13 of 13 shown

NSX Limited, in the matter of NSX Limited
[2025] FCA 1133 Para 17

…eive the same amount as fully paid shareholders, less the unpaid amount: see e.g., Wattyl Limited, in the matter of Wattyl Limited ABN 46 008 412 173 [2010] FCA 854 at [11]-[13]. But that is not the approach being adopted here.…
In the matter of Peak Rare Earths Limited
[2025] NSWSC 916 Para 11

…st ( Sovereign Life Assurance Company v Dodd [1892] 2 QB 573 at 583; Re Hills Motorway Ltd [2002] NSWSC 897 at [11]-[12] ( Hills ); Re Wattyl Ltd [2010] FCA 854 at ( Wattyl ); First Pacific Advisors LLC v Boart Longyear Ltd [2017] NSWCA 116 at [80] (Boart)). Secondly, the test is not one of identical treatment bu…
RHS Limited, in the matter of RHS Limited
[2018] FCA 562 Para 15

…on holders, on the other, are so dissimilar as to make it impossible for them to consult together with a view to their common interest: Re Wattyl Ltd [2010] FCA 854 at [15]‑[17]; Re SMS Management and Technology Ltd [2017] VSC 257 at [15].…
Re Boart Longyear Ltd
[2017] NSWSC 567 Para 39

…ntly, but in proportion to their existing rights, can still form a single class: Re Foster’s Group Ltd (No 2) [2011] VSC 547 at [37]; Re Wattyl Ltd [2010] FCA 854 at [17]; T Damien and A Rich, Schemes, Takeovers and Himalayan Peaks (3rd ed, 2013), pp 293–294. There is, as will emerge below, an issue between the p…
Re Strategic Energy Resources Ltd
[2011] VSC 645

…[5] Re Orica Limited [2010] VSC 231; Re Hills Motorway (2002) 43 ACSR 101; Re Wattle Limited [2010] FCA 854.…
Re Foster's Group Ltd (No 2)
[2011] VSC 547 Para 1

…be proportionate to the amounts paid up on those shares. Proportionate voting in this regard is not unusual.[11] [11]See for example, Re Wattyl Ltd [2010] FCA 854.…
Re Foster's Group Limited
[2011] VSC 93 Para 1

…be proportionate to the amounts paid up on those shares. Proportionate voting in this regard is not unusual.[11] [11]See for example, Re Wattyl Ltd [2010] FCA 854.…
Re Sylvastate Ltd
[2011] FCA 211 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…
Straits Resources Limited, in the matter of Straits Resources Limited
[2010] FCA 1467 Para 19

…fully paid shareholders. This is because they are paid the same in respect of their equity as all of the other shareholders; see Re Wattyl Limited [2010] FCA 854 at [15] – [17]. Performance Risk…
Re Straits Resources Ltd
[2010] FCA 1466 Para 4

…580 and 583. Barrett J referred to that principle in his decision in Re Hills Motorway . See also the observations of Stone J in Re Wattyl Limited [2010] FCA 854 at [15] – [17].…
Re Mitchell Communication Group
[2010] VSC 423 Para 1

…Appeal in Hong Kong, in UDL Argos Engineering & Heavy Industries Co Ltd v Li Oi Lin [2001] HKCFA 54; [2001] 3 HKLRD 634, [27]. See also Re Wattyl Ltd [2010] FCA 854, [15]–[16] (Unreported, Stone J, 10 August 2010), applying Re Hills Motorway Management Ltd (2002) 43 ACSR 101, 104 (Barrett J).…
Wattyl Limited, in the matter of Wattyl Limited ( No 2)
[2010] FCA 1012 Para 2

…eting and for notice of the second court hearing on 13 September 2010 to be advertised. The Scheme is described in my reasons for the earlier orders; [2010] FCA 854. The earlier reasons should be read in conjunction with the present reasons. The evidence…
Re Mosaic Oil NL
[2010] FCA 985 Para 11

…m a separate class for the purposes of approving the Scheme. I have recently considered this issue in Wattyl Limited, in the matter of Wattyl Limited [2010] FCA 854 at [15]-[16]. For the reasons given there I am satisfied that the partly paid shareholders in Mosaic are being treated fairly and that the community…

View all 13 citing cases →

Cases cited in this decision · 4 of 4 shown

Re Coles Group Ltd
[2007] VSC 389 Para 7

…does not proceed. This amount is under 1% of the equity value of Wattyl and is within the Takeovers Panel Guidelines; see Re Coles Group Limited No 1 [2007] VSC 389 at [69] per Robson J. The circumstances in which the break fee is payable are set out in Section 6.13(g) of the Scheme Booklet. They do not include t…
Re Hills Motorway Ltd
[2002] NSWSC 897 Para 15

…nterest”; 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 entitlement…
Re Australian Co-operative Foods Ltd
[2001] NSWSC 382 Para 16

…rder a separate 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 15

…o 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 treatmen…

Legislation cited in this decision · 2

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

Citation:		Wattyl Limited, in the matter of Wattyl Limited ABN 46 008 412 173 [2010] FCA 854
Parties:		WATTYL LIMITED ABN 46 008 412 173
File number:		NSD 892 of 2010
Judge:		STONE J
Date of judgment:		10 August 2010
Legislation:		Corporations Act2001 (Cth) s 411(1)
Cases cited:		Sovereign Life Assurance Company v Dodd [1892] 2 QB 573 Re Hills Motorway Management Ltd (2002) 43 ACSR 101 Re Coles Group Limited No 1 [2007] VSC 389 Re APN News and Media Ltd (2007) 60 ACSR 400 Application of Australian Co-operative Foods Ltd (2001) 38 ACSR 71
Date of hearing:	4 August 2010
Place:	Sydney
Division:	GENERAL DIVISION
Category:	No catchwords
Number of paragraphs:	23
Counsel for the Plaintiff:	M Oakes SC
Solicitor for the Plaintiff:	Clayton Utz Lawyers
Counsel for Valspar Corporation and Valspar Australia Paint Acquisition:	R M Foreman

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 892 of 2010

JUDGE:	STONE J
DATE OF ORDER:	4 AUGUST 2010
WHERE MADE:	SYDNEY