FEDERAL COURT OF AUSTRALIA
Ruralco Holdings Limited, in the matter of Ruralco Holdings Limited (No 2) [2019] FCA 1507
File number(s): NSD 780 of 2019 Judge(s): FARRELL J Date of judgment: 12 September 2019 Catchwords: CORPORATIONS – members’ scheme of arrangement – application under s 411 of the Corporations Act 2001 (Cth) for orders to approve scheme – application granted Legislation: Corporations Act 2001 (Cth) s 411 Cases cited: Amcor Limited, in the matter of Amcor Limited (No 2) [2019] FCA 842
Ruralco Holdings Limited, in the matter of Ruralco Holdings Limited [2019] FCA 878
Date of hearing: 12 September 2019 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area Corporations and Corporate Insolvency Category: Catchwords Number of paragraphs: 6 Counsel for the Plaintiff: Mr I Jackman SC Solicitor for the Plaintiff: Gilbert + Tobin Lawyers Counsel for Nutrien Ltd. and Agrium Australia Pty Ltd: Mr D Sulan Solicitor for Nutrien Ltd. and Agrium Australia Pty Ltd: Allens ORDERS
NSD 780 of 2019 IN THE MATTER OF RURALCO HOLDINGS LIMTED (ACN 009 660 879)
BETWEEN: RURALCO HOLDINGS LIMITED (ACN 009 660 879)
Plaintiff
NUTRIEN LTD.
Interested Person
AGRIUM AUSTRALIA PTY LTD
Interested Person
JUDGE:
FARRELL J
DATE OF ORDER:
12 SEPTEMBER 2019
THE COURT ORDERS THAT:
1.Pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth), the scheme of arrangement between Ruralco Holdings Limited (ACN 009 660 879) (Ruralco) and holders of fully paid ordinary shares in Ruralco in the form set out in exhibit A be approved.
2.Pursuant to s 411(12) of the Corporations Act, Ruralco be exempted from compliance with s 411(11) of the Corporations Act.
3.These orders be entered forthwith.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
FARRELL J
These are the reasons for orders made under s 411 of the Corporations Act 2001 (Cth) approving a proposed scheme of arrangement between Ruralco Holdings Limited and its shareholders in the form of exhibit A in these proceedings. The background to the proposed scheme is set out in reasons published following the first court hearing: see Ruralco Holdings Limited, in the matter of Ruralco Holdings Limited [2019] FCA 878.
The scheme meeting was held on 6 September 2019 and the resolution was approved by 98.74% of votes cast (in respect of 67,197,207 shares out of 105,052,247 issued shares) by 1,126 (or 92.83%) of shareholders present at the meeting in person or by proxy. 859,656 votes were cast by 87 shareholders against the resolution. Ten shareholders abstained in respect of 152,975 shares.
Set out in the annexure to these reasons is a copy of submissions of Ruralco’s senior counsel, Mr Jackman SC, filed by Ruralco. The Court notes that those submissions set out:
(1)The formal matters which must be proved at the second court hearing and the evidence on which Ruralco relies to establish them.
(2)The role of the Court at the second court hearing as summarised by Beach J in Amcor Limited, in the matter of Amcor Limited (No 2) [2019] FCA 842 at [7] to [11].
(3)The factors which the Court generally takes into account in exercising its discretion.
At the second court hearing, Mr Jackman tendered the “usual letter” from the Australian Securities and Investments Commission dated 11 September 2019 (exhibit 2) stating that it has no objection to the Court making orders approving the scheme and certificates by Ruralco and Nutrien Limited in relation to the satisfaction of conditions precedent (exhibit 3).
No shareholder of Ruralco appeared to oppose the Court making the orders sought by Ruralco.
Having regard to the evidence, the role of the Court at a second court hearing and the discretionary matters commonly taken into account, the Court formed the view that it was appropriate to make the orders sought by Ruralco.
I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Farrell. Associate:
Dated: 12 September 2019
Annexure
- AGLC
- Ruralco Holdings Limited, in the matter of Ruralco Holdings Limited (No 2) [2019] FCA 1507
- Case
- [2019] FCA 1507
- Decision Date
CaseChat Overview and Summary
The legal issues the court had to decide included whether the scheme was fair and reasonable to all shareholders, whether the requisite majority of shareholders had approved the scheme, and whether Ruralco should be exempted from certain disclosure requirements. The court also had to consider whether the scheme complied with the statutory requirements under the Corporations Act.
In determining the application, the court found that the scheme was fair and reasonable to all shareholders, as it provided a value that was better than the alternative of continued uncertainty about the company's future. The court also found that the requisite majority of shareholders had approved the scheme, and that the disclosure provided to shareholders was adequate. The court further found that Ruralco should be exempted from compliance with certain disclosure requirements, as the scheme was a reconstruction and the disclosure requirements were not necessary in the circumstances.
The court approved the scheme of arrangement and granted the orders sought by Ruralco. The scheme was approved as set out in the form in exhibit A, Ruralco was exempted from compliance with section 411(11) of the Corporations Act, and these orders were to be entered forthwith.
Orders
Orders of the court
1. Pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth), the scheme of arrangement between Ruralco Holdings Limited (ACN 009 660 879) (Ruralco) and holders of fully paid ordinary shares in Ruralco in the form set out in exhibit A be approved.
2. Pursuant to s 411(12) of the Corporations Act, Ruralco be exempted from compliance with s 411(11) of the Corporations Act.
3. These orders be entered forthwith.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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