Equatorial Mining Pty Limited v Antofagasta Investment Company Limited

Judgment (9 paragraphs)

[1]

Pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth) (Act), the compromises and arrangements between each plaintiff and its respective member, in the form set out in Exhibit C in the proceeding (each an Arrangement and together the Scheme), be approved.
Each plaintiff lodge with the Australian Securities and Investment Commission (ASIC) a copy of the approved Scheme at the time of lodging a copy of these orders.
Pursuant to s 411(12) of the Act, each plaintiff be exempted from compliance with the requirements of s 411(11) of the Act in respect of order 1 above.
Pursuant to s 411(10) of the Act, these orders take effect, upon lodgement of an office copy thereof with ASIC, on and from 31 December 2013, with the intent that this date be the Merger Implementation Date for the purposes of the Scheme.
Pursuant to s 413(1) of the Act, the Scheme be implemented, on the Merger Implementation Date, commencing at 15.00 (Sydney time) (the Implementation Time), by the following steps taken in the following order, using the definitions in the Scheme and speaking as at that time: (a) first, all the Assets of EQM be transferred to and become the Assets of SGC; (b) second, all the Liabilities of EQM be transferred to and become the Liabilities of SGC; (c) third, all the Assets of SGC (including the Assets transferred to SGC under paragraph (a) above) be transferred to and become the Assets of AIC and the market value (determined as at the date of transfer) of the Assets, so transferred be applied to repay the loan as a reduction of the loan owing by SGC to AIC; (d) fourth, all the remaining Liabilities of SGC (including the Liabilities transferred to SGC under paragraph (b) above) be transferred to and become the Liabilities of AIC; and (e) fifth, thereafter, each of EQM and SGC be deregistered by ASIC without winding up.

Additional evidence 5 The following additional affidavits have been read: The affidavit of Russell Andrew Forsyth Stewart made 9 January 2014. Mr Stewart acted as Chairman of the two scheme meetings held on 20 December 2013. His affidavit deals with, amongst other things, the manner in which the meetings were held and the results of voting. Predictably, given the essentially in-house nature of the proposed reconstruction, the EQM scheme was approved by SGC (the sole member of EQM) and the SGC scheme was approved by AIC (the sole member of SGC) acting through a corporate representative appointed under s 250D of the Act for the purpose of the meetings. The affidavit of Ronald William Forster made 6 February 2014. Mr Forster is a partner of Minter Ellison, the solicitors for EQM and SGC in this proceeding. His affidavit deals with, amongst other things, lodgement of the explanatory statement with ASIC, and its registration; delivery of the notices of meeting and the explanatory statement to SGC's and AIC' s appointed corporate representative; and the receipt of a letter dated 6 February 2014 from ASIC, standing as a written statement for the purpose of s 411(17)(b) of the Act that ASIC has no objection to the schemes of arrangement. I note that copies of the written submissions, referred to in my earlier reasons (see [29]), were provided to ASIC prior to the present hearing. The affidavit of Ann Louise Donohue made 7 February 2014. Ms Donohue is a partner at Minter Ellison. Her affidavit deals with, amongst other things, the advertising of the present hearing and the non-receipt of any notice of intention to appear at this hearing.

Consideration 6 I have been provided with written submissions. Following the hearing, I marked the submissions as MFI 3. 7 I am satisfied that the meetings were convened and held as ordered. I have already referred to the passing of the requisite resolutions approving each scheme. The requirements of s 411(4)(a) of the Act have been satisfied. 8 I note ASIC's written statement that it has no objection to the schemes of arrangement. The requirement of s 411(17) of the Act has been satisfied in relation to each scheme. 9 I am satisfied that this hearing has been advertised, as ordered. No notice of appearance (as identified in the advertisement) has been received from any person seeking to oppose approval being granted to the schemes. 10 I am satisfied that orders should be made under s 411(4)(b) of the Act approving the EQM scheme and the SGC scheme. 11 The plaintiffs also seek orders under s 413(1) of the Act in respect of the implementation of the scheme for reconstruction. In my earlier reasons (see [27] - [29]), I noted that the issue of the Court's jurisdiction to make orders under s 413(1) had been raised in relation to the transfer of Assets and Liabilities to AIC. It is convenient to repeat [29] of my earlier reasons: EQM and SGC submit that, for the purposes of s 413(1) of the Act, AIC is a "company" and, specifically, a "transferee company", even though, under the definition of "company" in s 9 of the Act, AIC is not "a company registered under this Act". Alternatively, they submit that the scheme has incidents (namely, the transfer of property and liabilities from EQM to SGC) that will enliven the jurisdiction to make orders under s 413(1) to transfer property and liabilities from SGC to AIC to ensure that the reconstruction is fully and effectively carried out. The plaintiffs' submissions in this regard are articulated in written submissions and supplementary written submissions which I have marked MFI 1 and MFI 2 respectively. In my view, the determination of the question raised should be left to the second court hearing, when the relevant orders will be sought. My provisional view is that there is no jurisdictional impediment to the Court making the foreshadowed orders, if otherwise appropriate. 12 I remain of the view that there is no jurisdictional impediment to the Court making orders under s 413(1) of the Act in respect of the transfer of Assets and Liabilities to AIC, even though, under the definition of "company" in s 9 of the Act, AIC is not "a company registered under this Act". 13 In this case, it is not necessary for me to deal with the plaintiffs' primary submission that AIC is a "company" and, specifically, a "transferee company" for the purpose of s 413(1). This is because I am satisfied that the plaintiffs' alternative submission is correct. 14 To paraphrase the relevant text of s 413(1), the present application is for the approval of compromises or arrangements under Pt 5.1 of Ch 5 of the Act (the EQM scheme and the SGC scheme). The schemes have been proposed for the purposes of, or in connection with, a scheme for the reconstruction of Pt 5.1 bodies (EQM, SGC and AIC). Under the scheme for reconstruction, the whole of the undertaking and property of a body concerned in the scheme (EQM) is to be transferred to a company (SGC). SGC is a transferee company for the purposes of s 413(1). That being the case, the Court has power under s 413(1), when making orders approving the compromises or arrangements (the EQM scheme and the SGC scheme), to make orders that provide for "such incidental, consequential and supplemental matters as are necessary to ensure that the reconstruction or amalgamation is fully and effectively carried out": s 413(1)(g). The EQM scheme and the SGC scheme are integral with and fundamental to achieving the reconstruction that is sought. In order to ensure that the reconstruction is fully and effectively carried out, orders providing for the transfer of the Assets and Liabilities of SGC to AIC should be made. 15 There is an additional matter. Relying on s 411(10), the plaintiffs seek a condition that the orders to be made pursuant to s 411(4)(b) take effect on and from 31 December 2013, being the end of the last financial year of the Antofagasta group companies. I can see no impediment to conditioning the orders in that way. Under the terms of the scheme for reconstruction, this will be the Merger Implementation Date.

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Judgment (9 paragraphs)

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