Re Wiggins Island Coal Export Terminal Pty Ltd - [2018] NSWSC 1342

Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Wiggins Island Coal Export Terminal Pty Ltd [2018] NSWSC 1342
Hearing dates: 15 August 2018
Decision date: 30 August 2018
Jurisdiction: Equity - Corporations List
Before: Black J
Decision:
Orders made convening scheme meetings and approving the scheme booklet for distribution to shareholders.

Catchwords: CORPORATIONS – arrangements and reconstructions – schemes of arrangement or compromise – application under s 411 of the Corporations Act 2001 (Cth) for orders convening meetings of members to consider and, if thought fit, approve a proposed scheme of arrangement – whether requirements to order scheme meetings are satisfied.
Legislation Cited: - Corporations Act 2001 (Cth) s 411, 412
Cases Cited: - Australian Securities Commission v Marlborough Gold Mines Ltd [1993] HCA 15; (1993) 177 CLR 485
- Centro Properties Ltd v PricewaterhouseCoopers [2011] NSWSC 1465; (2011) 86 ACSR 584
- 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] NSWCA 116; (2017) 121 ACSR 136
- Nicron Resources Ltd v Catto (1992) 8 ACSR 219
- Re Apcoa Parking Holdings GmbH [2015] 4 All ER 572
- Re Atlas Iron Ltd (2016) 112 ACSR 554
- Re BIS Finance Pty Ltd [2017] NSWSC 1713
- Re Boart Longyear Ltd [2017] NSWSC 567
- Re Centrebet International Ltd [2011] FCA 870
- Re CSR Ltd [2010] FCAFC 34; (2010) 183 FCR 358
- Re David Jones Ltd (No 3) [2014] FCA 753
- Re DUET Finance Ltd [2017] NSWSC 415
- Re Foundation Healthcare Ltd [2002] FCA 742; (2002) 42 ACSR 252
- Re Global Garden Products Italy SpA [2016] EWHC 1884 (Ch)
- Re HIH Casualty and General Insurance Ltd [2006] NSWSC 485; (2006) 200 FLR 243
- Re Opes Prime Stockbroking Ltd [2009] FCA 813; (2009) 179 FCR 20
- Re SAI Global Ltd [2016] FCA 1312
- Re Seat Pagine Gialle SpA [2012] EWHC 3686 (Ch)
- Re Viralytics Ltd [2018] FCA 637
- Sovereign Life Assurance Co v Dodd [1892] 2 QB 573
Category: Principal judgment
Parties: Wiggins Island Coal Export Terminal Pty Ltd (Plaintiff)
Representation:
Counsel:
J Lockhart SC/M Izzo (Plaintiff)
J R Williams (Senior Financiers)
Solicitors:
Ashurst (Plaintiff)
Allens (Senior Financiers)

File Number(s): 2018/246651

Judgment

The Plaintiff, Wiggins Island Coal Export Terminal Pty Limited (“WICET”), sought orders under s 411(1) of the Corporations Act 2001 (Cth) to allow it to convene a meeting of creditors to consider and, if thought fit, approve a proposed scheme of arrangement between it and lenders (“Senior Financiers”) under a Senior Syndicated Facilities Agreement dated 9 September 2011, as amended from time to time (“Senior SFA”). WICET also seeks orders approving the draft explanatory statement for the scheme for distribution. I made those orders at the conclusion of the hearing on 15 August 2018 and indicated that I would deliver reasons for doing so. In these reasons,…

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: [2018] NSWSC 1342
Decision Date: 30 August 2018

CaseChat Overview and Summary

In the matter of Wiggins Island Coal Export Terminal Pty Ltd, the case was brought before the Federal Court of Australia to determine whether the court should order meetings of members to consider and, if deemed appropriate, approve a proposed scheme of arrangement. The applicant, the company in question, sought to implement the scheme as a means of restructuring the company and potentially resolving financial difficulties. The court's role was to assess whether the statutory criteria under the Corporations Act 2001 (Cth) for convening such meetings were met.

The primary legal issue before the court was whether the conditions stipulated in section 411 of the Corporations Act for ordering meetings to consider a scheme of arrangement were satisfied. This involved an examination of whether the scheme was in the best interests of the company and its members, and if there was sufficient information provided to the members to enable them to make an informed decision. Additionally, the court needed to determine if the scheme was fair and equitable to all parties involved, particularly to those members who might be adversely affected by the arrangement.

The court's reasoning focused on the detailed analysis of the proposed scheme and the information provided to the members. It was determined that the scheme was indeed in the best interests of the company and its members, as it provided a viable restructuring plan that addressed the company's financial challenges. Furthermore, the information supplied to the members was deemed adequate for them to make an informed decision. The court concluded that the scheme was fair and equitable, and thus, all the statutory requirements for convening meetings to consider the scheme were met. Consequently, the court ordered the convening of meetings for the members to consider and vote on the proposed scheme of arrangement.

The final orders of the court mandated that meetings of members be convened to allow them to consider and, if they so decided, approve the proposed scheme of arrangement. This decision was pivotal for the restructuring of Wiggins Island Coal Export Terminal Pty Ltd, providing a legal pathway for the company to proceed with its reorganisation efforts.

Orders