Village Roadshow Broadcasting Pty Ltd v Austereo Ltd - [1997] FCA 572

FEDERAL COURT OF AUSTRALIA

CORPORATIONS LAW - take-over offers - compulsory acquisition of minority shareholdings - rights of dissenting offerees - application by company for an order under s 1322(4)(d) of the Corporations Law to abridge period by which dissenting offerees may make application under s 701(6) with respect to notices given by the company under s 701(2) - whether “substantial injustice has been or is likely to be caused to any person” for the purposes of s 1322(6)(c) - consideration of the principles applicable to determining whether it is appropriate to abridge time periods to enable the compulsory acquisition to be completed earlier than otherwise would have occurred.

Corporations Law ss 701(2), 701(6), 701(9), 701(10), 1322(4)(d), 1322(6)

Corporations Regulations reg 602A

Elderslie Finance Corporation Ltd v Australian Securities Commission (1993) 11 ACSR 157
David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265
Gambotto v WCP Limited (1995) 182 CLR 432
Elkington v Shell Australia Ltd (1993) 32 NSWLR 11
Re Hoare & Co Ltd [1933] All ER Rep 105
Elkington v Vockbay Pty Ltd (1993) 10 ACSR 785

VILLAGE ROADSHOW BROADCASTING PTY LTD v AUSTEREO LIMITED
VG 3174 of 1997

GOLDBERG J
MELBOURNE
24 JUNE 1997

IN THE FEDERAL COURT OF AUSTRALIA )

)

VICTORIAN DISTRICT REGISTRY ) VG 3174 of 1997

)

GENERAL DIVISION )

BETWEEN:
VILLAGE ROADSHOW BROADCASTING PTY LTD
Applicant

AND:
AUSTEREO LIMITED
Respondent

JUDGE: GOLDBERG J

PLACE: MELBOURNE

DATE: 24 JUNE 1997

MINUTES OF ORDER

THE COURT ORDERS THAT:

Pursuant to s 1322(4)(d) of the Corporations Law the time after which the applicant shall serve a copy of the notice given by the applicant on or about 23 May 1997 under s 701(2) of the Corporations Law on the respondent Austereo Limited pursuant to s 701(10) of the Corporations Law and otherwise comply with such subsection shall be abridged to 4.15 pm on Tuesday 24 June 1997.

The applicant serve a copy of this order on the Australian Securities Commission.

A copy of this order be sent by post to each person listed in Schedule A to the order of the Court dated 20 June 1997.

The applicant pay the costs of the respondent, Austereo Limited of and incidental to this application including any reserved costs.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA )

)

VICTORIAN DISTRICT REGISTRY ) VG 3174 of 1997

)

GENERAL DIVISION )

BETWEEN:
VILLAGE ROADSHOW BROADCASTING PTY LTD
Applicant

AND:
AUSTEREO LIMITED
Respondent

JUDGE: GOLDBERG J

PLACE: MELBOURNE

DATE: 24 JUNE 1997

REASONS FOR JUDGMENT

GOLDBERG J:

On 13 March 1997 the applicant, Village Roadshow Broadcasting Pty Ltd (“Village Roadshow”), a wholly owned subsidiary of Village Roadshow Limited, announced a takeover offer for the whole of the issued capital in Austereo Limited (“Austereo”), to which it was not entitled, at $2.35 per share. On 20 March 1997, a Part A statement was registered with the Australian Securities Commission (“the Commission”)…

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: [1997] FCA 572
Decision Date: 24 JUNE 1997

CaseChat Overview and Summary

Village Roadshow Broadcasting Pty Ltd, a subsidiary of Village Roadshow Limited, initiated a takeover bid for Austereo Limited, a company in which Village Roadshow was not entitled to own shares. The bid, initially at $2.35 per share and later increased to $2.55, was accepted by approximately 83.91% of the offerees, giving Village Roadshow entitlement to 99.22% of Austereo's issued share capital. Village Roadshow aimed to complete the compulsory acquisition of the remaining shares by 30 June 1997 to secure significant taxation benefits for its group. The legal issues involved the interpretation and application of sections 701(2), 701(6), 701(9), 701(10), 1322(4)(d), and 1322(6) of the Corporations Law, particularly concerning the abridgment of time periods for dissenting offerees to make applications and the potential for causing substantial injustice to any person.

The court had to determine whether it was appropriate to abridge the time periods set by the Corporations Law, considering the principles applicable to such decisions. The primary consideration was whether the abridgment would cause substantial injustice to any person, as required by section 1322(6)(c) of the Corporations Law. The court examined whether the compulsory acquisition was fair and reasonable and whether the offeror had complied with statutory formalities. The court also took into account the recommendations of the independent directors and the submissions of the Australian Securities Commission, which did not oppose the application, noting that no substantial injustice would result from the abridgment. The court concluded that no substantial injustice would be caused by the abridgment, and thus, it was appropriate to make the orders sought by Village Roadshow to facilitate the compulsory acquisition by the specified date.

Orders