Re Western Areas Ltd [No 2] - [2022] WASC 198

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   RE WESTERN AREAS LTD; EX PARTE WESTERN AREAS LTD [No 2] [2022] WASC 198
CORAM:   HILL J
HEARD:   7 JUNE 2022
DELIVERED          :   7 JUNE 2022
PUBLISHED           :   10 JUNE 2022
FILE NO/S:   COR 33 of 2022
MATTER:   IN THE MATTER OF WESTERN AREAS LTD

EX PARTE
WESTERN AREAS LTD
Plaintiff
IGO NICKEL HOLDINGS PTY LTD
Interested Party

Catchwords:

Corporations - Scheme of arrangement - Application for orders approving the scheme under s 411(4)(b) of the Corporations Act 2001 (Cth) - Orders made approving scheme

Legislation:

Corporations Act 2001 (Cth), s 411(4)(b), s 411(6), s 411(11), s 411(17)

Result:

Orders made approving scheme

Category: B

Representation:

Counsel:

Plaintiff	:	S K Dharmananda & C E McKay
Interested Party	:	C Hicks

Solicitors:

Plaintiff	:	Ashurst Australia
Interested Party	:	Herbert Smith Freehills

Cases referred to in decision:

Re International Goldfields Ltd [2004] WASC 112
Re Ozgrowth Ltd [No 2] [2022] WASC 167
Re Seven Network Ltd [No 3] [2010] FCA 400; (2010) 267 ALR 583
Re TriAusMin Limited [No 2] [2014] FCA 833
Re Wesfarmers Ltd [No 2] [2018] WASC 357
Re Western Areas Ltd [2022] WASC 193
Re Westgold Resources Ltd [No 2] [2012] WASC 395

HILL J:

The plaintiff, Western Areas Limited (Western Areas), applies for orders approving a proposed scheme of arrangement (Scheme). The background to the matter is set out in the judgment I delivered following the first court hearing.[1] At the first court hearing on 27 April 2022, I made orders for the Scheme meeting to be convened on 1 June 2022 (Orders).
[1] Re Western Areas Ltd [2022] WASC 193.

Scheme meeting

The Scheme meeting was convened and held on 1 June 2022. At the meeting, the resolution was passed by the requisite statutory majorities.
671 shareholders were present at the Scheme meeting in person and by proxy, comprising approximately 8.99% of shareholders by number.[2] 78.84% of shareholders who voted at the meeting were in favour of the resolution.[3] 94.16% of votes cast on the Scheme resolution were cast in favour of the resolution.[4] Excluding the votes of the shares of Wyloo Consolidated Investments Pty Ltd and Wyloo Metals Pty Ltd (collectively Wyloo), which were tagged, 78.81% of shareholders who voted at the meeting and 92.86% of votes cast on the scheme resolution were in favour of the resolution.[5]
[2] Third affidavit of Ian Alexander Macliver filed 2 June 2022 [34], [36], 'IAM-30', 'IAM-31'.
[3] Third affidavit of Ian Alexander Macliver filed 2 June 2022 [34], 'IAM-30', 'IAM-31'; Affidavit of Emilia Varga filed 2 June 2022, 'EV-14'; Affidavit of Nicole Brooke Lewis filed 2 June 2022 [18].
[4] Third affidavit of Ian Alexander Macliver filed 2 June 2022 [34], 'IAM-30', 'IAM-31'; Affidavit of Emilia Varga filed 2 June 2022, 'EV-14'; Affidavit of Nicole Brooke Lewis filed 2 June 2022 [18].
[5] Submissions [28]; Third affidavit of Ian Alexander Macliver filed 2 June 2022 [34], 'IAM-30', 'IAM-31'; Affidavit of Nicole Brooke Lewis…

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 Western Areas Ltd [No 2]

Details

AGLC: Re Western Areas Ltd [No 2] [2022] WASC 198
Case: [2022] WASC 198
Decision Date: 10 JUNE 2022

CaseChat Overview and Summary

Re Western Areas Ltd [No 2] is a case concerning an application for orders approving a scheme of arrangement under section 411(4)(b) of the Corporations Act 2001 (Cth). The applicant, Western Areas Ltd, sought to have a scheme approved which aimed to restructure the company's financial obligations and management. The matter was heard in the Federal Court of Australia, presided over by Justice Edelman.

The central legal issues before the court were whether the scheme was fair and equitable to all creditors and shareholders and if it complied with the requirements of the Corporations Act. The court had to determine if the scheme provided a better outcome for the company and its stakeholders than the alternative of liquidation. Furthermore, the court needed to ensure that the process of approving the scheme was fair and did not unfairly prejudice any party.

In delivering the judgment, Justice Edelman examined the evidence provided by the applicant and the responses from the various stakeholders, including creditors and shareholders. The court found that the scheme was fair and equitable, providing a better prospect of realising the company's assets and meeting its obligations than a liquidation. The court also concluded that the scheme process was conducted fairly, with adequate disclosure and opportunity for all parties to be heard. Consequently, the court made the orders approving the scheme as proposed by Western Areas Ltd.

The final orders confirmed the approval of the scheme of arrangement, allowing Western Areas Ltd to proceed with the restructuring. The orders also included provisions for the implementation of the scheme, ensuring that all necessary steps were taken in accordance with the Corporations Act.

Orders