Barrick (Australia Pacific Exploration) Pty Limited v Barrick

Barrick (Australia Pacific Exploration) Pty Limited v Barrick - [2018] FCA 614 - FCA 2018 case summary — Zoe

[5]

EVIDENCE 5 Altona relies on the following materials: (a) the fifth affidavit of Mr Mannolini affirmed 29 March 2018 (Fifth Mannolini Affidavit), which confirms that: (i) an office copy of the orders granted by the Court on 16 February 2018 (Meeting Orders) was lodged with ASIC on 16 February 2018; (ii) a copy of the Scheme Book was registered at ASIC on 16 February 2018; and (iii) the second Court hearing was advertised in accordance with the Meeting Orders; (b) the second affidavit of Mr Maloney (Second Maloney Affidavit), Chairperson of the Scheme Meeting, affirmed on 27 March 2018, which deposes that: (i) a copy of the Scheme Book approved by the Court on 16 February 2018 was registered at ASIC on 16 February 2018; (ii) the Scheme Meeting was held in accordance with Altona's Constitution and the Act; (iii) Mr Maloney's interests in Altona were disclosed to the Scheme Meeting prior to the resolutions being proposed; and (iv) the statutory majorities were obtained in relation to the resolution to implement the Scheme (Scheme Resolution); (c) the affidavit of Ms McAuley affirmed on 29 March 2018 (McAuley Affidavit), which confirms the details relating to the dispatch of the Scheme Book to Altona's registered shareholders who have nominated, pursuant to s 249J of the Act, an email address for the purpose of receiving communications from Altona (Electronic Shareholders) in accordance with the Meeting Orders, and in which she confirms that she: (i) supervised the collation of proxies received by the share registry and reporting of the proxies to Altona on 24 March 2018; and (ii) collated the voting results of the 'tagged shareholders' who voted by proxy and at the Scheme Meeting (and Ms McAuley reports on the votes cast by those shareholders, as requested by ASIC on 16 February 2018); (d) the affidavit of Mr Scott affirmed on 28 March 2018 (Scott Affidavit), which confirms the details relating to the dispatch of the Scheme Book by post to Altona's registered shareholders in accordance with the Meeting Orders; (e) the third affidavit of Mr Cowden affirmed on 29 March 2018 (Third Cowden Affidavit), which notes the proxy solicitation campaign undertaken by Altona and the release of CMMC's 2017 audited annual financial statements; (f) the affidavit of Ms Lewis affirmed on 29 March 2018 (Lewis Affidavit), which confirms that she attended the Scheme Meeting as returning officer and recorded the votes cast in respect of the resolutions; (g) the second affidavit of Ms Nawata affirmed on 28 March 2018 (Second Nawata Affidavit) and the second affidavit of Mr O'Rouke (Second O'Rourke Affidavit) in relation to the satisfaction of certain conditions precedent required under clause 3.1 of the MID by CMMC and CMMC Australia; (h) the sixth affidavit of Mr Mannolini (Sixth Mannolini Affidavit) affirmed 3 April 2018, which confirms that: (i) the conditions precedent to the Scheme becoming effective, except for the Court's approval, have been satisfied or waived; and (ii) the ASIC has provided a notice in writing that it has no objection to the Scheme under s 411(17)(b) of the Act; (i) the affidavit of Mr Cohen, sworn on 3 April 2018, which deposes to his belief that the condition in cl 3.1(n) of the MID will be satisfied; and (j) the affidavits upon which Altona relied at the first Court hearing, which contain details of the Scheme and disclosure to members relating to the Scheme.

[7]

STANDARD OF REVIEW 9 In considering the principles which govern the Court's discretion to approve a scheme, Jacobson J in Re Seven Network Ltd (No 3) (2010) 267 ALR 583 (at [35]-[40]) referred to the following list of considerations set out by the Corporations and Markets Advisory Committee in its December 2009 Report and supporting authorities: (a) whether the members have voted in good faith and not for an improper purpose: Re Foundation Healthcare Ltd (No 2) (2002) 43 ACSR 680; (b) whether the proposal is fair and reasonable so that an intelligent and honest person who was a member of the relevant class, properly informed and acting alone, might approve it: Fowler Lindholm (2009) 178 FCR 563. This leading test of fairness was set out by Fry LJ in Re Alabama, New Orleans, Texas and Pacific Junction Railway Co [1891] 1 Ch 213 (at 247); (c) whether the plaintiff has brought to the attention of the Court all matters that could be considered relevant to the exercise of the Court's discretion: Re Permanent Trustee Co Ltd (2002) 43 ACSR 601; (d) whether there has been full and frank disclosure of all information material to the members' decision: Re NRMA Ltd (No 2) (at [30]); (e) whether minority shareholders would be oppressed by the scheme: Re Ranger Minerals Ltd; Ex parte Ranger Minerals Ltd (2002) 42 ACSR 582; and (f) whether the scheme offends public policy: CSR Ltd, Re of CSR Ltd (2010) 265 ALR 703 (at [51]-[56]) 10 The Court's jurisdiction in relation to an arrangement is supervisory. The Court is to be satisfied that there has been no oppression and the arrangement is one that is capable of being accepted. 11 The Court must be satisfied that the meeting to approve the scheme has been completed and that the resolution has been passed in accordance with the statutory requirements: Re Central Pacific Minerals NL [2002] FCA 239 per Emmett J (at [12]), and that the scheme is fair and reasonable to members in a general sense: Re Solution 6 Holdings Ltd (2004) 50 ACSR 113 (at [21]).

[12]

SECTION 411(17) CONSIDERATIONS 23 The Court's ultimate approval of the Scheme is dependent upon fulfilment of one of two alternative conditions set out in s 411(17) of the Act. 24 ASIC provided a written statement to the effect that it has no objection to the Scheme. Thus, the second alternative (s 411(17)(b) of the Act) was satisfied. Production of a 'no objection letter' usually brings an end to the issue of ASIC's objections, but the letter does not bring to an end the Court's discretion: Re Macquarie Private Capital A Ltd [2008] NSWSC 323 per Barrett J (at [29]). 25 If the Court were to find that the Scheme had been proposed for the purpose of avoiding the operation of a provision of Ch 6 (proscribed purpose) and that the existence of the proscribed purpose would work oppressively, unjustly or unfairly against Altona's members or some other interested party, that finding may be taken into consideration as part of the exercise of the Court's power to approve the Scheme under s 411(4)(b) of the Act: Re Coles Group (No 2) (2007) 215 FLR 411 per Robson J (at [75]-[78]). 26 As to the existence of the proscribed purpose, the Court is not to take an excessively rigid view but a liberal and practical approach. In Re ACM Gold Limited; Re Mt Leyshon Gold Mines Ltd (1992) 34 FCR 530 (at 538), O'Loughlin J observed that the 'proposition that ... [an] arrangement must be struck down if it, or any part of it, could have been implemented as a takeover scheme' was 'far too rigid'. 27 Where the directors of a target company consider a merger proposal is in the best interests of the members of the target company the implementation of the merger by a method that provides for the certainty of outcome (100% ownership by the bidder company) through a single process is a commercially rational reason for choosing a scheme of arrangement over a Ch 6 takeover. This reason for preferring a scheme of arrangement to a Ch 6 takeover is not a proscribed purpose: Re ACM Gold Ltd (at 541-543); Re Stockbridge Ltd (1993) 9 ACSR 637 (at 652-654). 28 There is no reason to conclude that the Scheme has been proposed for the proscribed purpose.

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Judgment (17 paragraphs)

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Legislation Cited (2)

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