Re PGG Wrightson Ltd - [2019] NZHC 1780

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2019-409-323

[2019] NZHC 1780

IN THE MATTER OF a Scheme of arrangement under Part 15 of the Companies Act 1993

BETWEEN

PGG WRIGHTSON LIMITED

Applicant

Hearing: (Determined on the Papers)

Counsel:

L L Fraser and W J Strowger for the Applicant

Judgment:

26 July 2019

JUDGMENT OF ASSOCIATE JUDGE LESTER

This judgment was delivered by me on 26 July 2019 at 3.30pm Pursuant to rule 11.5 of the High Court Rules

Registrar/Deputy Registrar 26 July 2019

Re PGG WRIGHTSON LTD [2019] NZHC 1780 [26 July 2019].

[1] PGG Wrightson Ltd (“the applicant”) seeks final orders to complete a return of capital to its shareholders by way of a scheme under Pt 15 of the Companies Act 1993 (“the Act”).

Background

[2] The background to the Scheme is summarised briefly in my judgment of 27 June 2019,1 which gave preliminary directions in respect of service and in relation to the holding of the Special Meeting of shareholders required under the proposed Scheme.

[3] In that judgment, a hearing date for the application that this Court sanction the Scheme of arrangement under s 236(1) of the Act was scheduled for 10am on Monday 5 August 2019.

[4] The applicant has sought, given the overwhelming support for the Scheme at the Special Meeting which was held on 23 July 2019 and in the absence of any opposition, that I deal with the application on the papers. I consider that appropriate and the hearing on 5 August 2019 is vacated.

Compliance with preliminary orders

[5] Without reciting all of the evidence put forward as to how the preliminary orders concerning the giving of notice of the Special Meeting and in relation to service of the Shareholder Materials were complied with, I am satisfied that the directions previously made have been complied with.

[6] The means by which the Shareholder Materials were to be provided to shareholders both electronically and by post, together with advertising in the Public Notices of specified newspapers, were set out in the directions and the evidence established those directions were complied with.

1 Re PGG Wrightson Limited [2019] NZHC 1477.

[7] The Shareholder Materials were also to be made available electronically on the applicant’s website and directions were made in respect of a very small number of shareholders for whom the applicant no longer had contact details.

[8] The evidence demonstrates that the Special Meeting that was directed to be held, was duly held. The Resolution to be passed required a majority of 75 per cent. The evidence discloses that the votes cast at the Special Meeting, along with proxy votes, were 99.95 per cent of the votes in favour of the Resolution.

[9] The directions given specified how the outcome of the vote was to be notified and again the evidence shows these requirements were satisfied.

[10] Specific directions were given in respect of how any shareholder opposing the Scheme…

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 PGG Wrightson Ltd

Details

AGLC: Re PGG Wrightson Ltd [2019] NZHC 1780
Case: [2019] NZHC 1780
Decision Date: 26 July 2019

CaseChat Overview and Summary

PGG Wrightson Ltd (the applicant) sought final orders to complete a return of capital to its shareholders by way of a scheme under Part 15 of the Companies Act 1993. The applicant proposed to return surplus capital to shareholders through a scheme of arrangement, which required approval from the High Court. The scheme was overwhelmingly supported by shareholders at a special meeting held on 23 July 2019, and no opposition was raised.

The court had to decide whether the scheme complied with statutory provisions, whether it was fairly put to shareholders, whether shareholders were fairly represented and acted without coercion, and whether the scheme was fair and equitable. The applicant demonstrated compliance with the statutory provisions and provided adequate notice and information to shareholders. The scheme was proposed fairly, with all shareholders having equal rights and interests, and there was no suggestion of any shareholder interests being adversely affected. The overwhelming approval of the scheme at the special meeting indicated that it was objectively reasonable and fair.

The court concluded that the scheme was fair and equitable, as all shareholders would benefit proportionately to their shareholding, and there would be no adverse impact on creditors or other third parties. The court approved the scheme, and counsel were directed to tender the final form of order sought, incorporating necessary components of the scheme.

This case highlights the importance of ensuring compliance with statutory provisions and fair treatment of shareholders in a scheme of arrangement. The court's approval of the scheme in this case demonstrates the court's willingness to support a fair and reasonable proposal that benefits all shareholders.

Orders