Snowside Pty Ltd as trustee for the Snowside Trust v Boart Longyear Ltd

Snowside Pty Ltd as trustee for the Snowside Trust (the applicant) appealed to the Court of Appeal of New South Wales against a decision of the primary judge approving a scheme of arrangement under Part 5.1 of the *Corporations Act 2001* (Cth) proposed by Boart Longyear Ltd (the respondent). The dispute concerned whether the Court had the power to approve a scheme of arrangement with material alterations from the version considered and approved by the creditors at their meeting, particularly where that approval was expressed to be limited to alterations that did not affect the substance of the scheme.

The central legal issue before the Court of Appeal was the scope of the Court’s power under s 411(6) of the *Corporations Act 2001* (Cth) to approve a scheme of arrangement. Specifically, the Court had to determine whether this power extended to approving alterations that were material or substantial to the scheme, and whether such power could be exercised when the creditors’ approval was qualified by a condition that the alterations should not affect the substance of the scheme.

The Court of Appeal, comprising Bathurst CJ, Beazley P, and Leeming JA, dismissed the appeal. The Court reasoned that the primary judge was correct in holding that the power under s 411(6) was available even with material alterations. The Court affirmed that the statutory power to approve a scheme with modifications is broad and not confined to minor or insubstantial changes. The Court found that the creditors’ approval, even if expressed to be limited, did not fetter the Court’s statutory discretion under s 411(6) to approve the scheme with such modifications as it thought fit, provided the overarching requirements of the section were met.

Consequently, leave to appeal was granted, but the appeal was dismissed with costs.