Millennium CHPP Pty Ltd v Millennium Coal Pty Ltd [2011] FCA 4 | Case summary

THE COURT ORDERS THAT:

Pursuant to section 411(4)(b) Corporations Act 2001 (Act), the schemes of arrangement between each of the Twelfth and Twenty-First Plaintiffs and its respective members, in the form set out in Annexure 'A' to these orders (each a Scheme and together the Schemes), be approved.
Pursuant to Order 35 Rule 7 of the Federal Court Rules, order that Annexure 'A' to these Orders be substituted for Annexure 'A' to the Orders made on 16 December 2009, such substitution to be with effect on and from 16 December 2009.
Pursuant to section 411(12) of the Act, the Twelfth and Twenty-First Plaintiffs be exempted from compliance with the requirement of section 411(11) of the Act.
Pursuant to section 413(1) of the Act (and using the definitions in the Schemes), as from the Effective Time, each of the following transactions will occur, in relation to each Scheme, in the order set out below: (a) Excel Employment Services Scheme (i) first, all of the Assets of the Twelfth Plaintiff, Excel Employment Services (Excel Employment Services), will be transferred to and become the Assets of the Second Defendant, Peabody Australia Mining (Peabody Australia Mining); (ii) second, all of the Liabilities of Excel Employment Services will be transferred to and become the Liabilities of Peabody Australia Mining; and (iii) third, Excel Employment Services will be deregistered by ASIC without winding up pursuant to section 413(1)(d) of the Act; (b) North Goonyella Coal Mine Management Scheme (i) first, all of the Assets of the Twenty-First Plaintiff, North Goonyella Coal Mine Management Pty Ltd (North Goonyella Coal Mine Management), will be transferred to and become the Assets of the Seventh Defendant, Peabody (Bowen) Pty Ltd (Peabody (Bowen)); (ii) second, all of the Liabilities of North Goonyella Coal Mine Management will be transferred to and become the Liabilities of Peabody (Bowen); and (iii) third, North Goonyella Coal Mine Management will be deregistered by ASIC without winding up pursuant to section 413(1)(d) of the Act.
Pursuant to section 413(1)(c) of the Act, as and from the Effective Time (as defined in the Schemes), any legal proceedings pending by or against: (a) the Twelfth Plaintiff, Excel Employment Services, will be deemed continued by or against (as the case may be) the Second Defendant, Peabody Australian Mining; and (b) the Twenty-First Plaintiff, North Goonyella Coal Mine Management, will be deemed continued by or against (as the case may be) the Seventh Defendant, Peabody (Bowen), without the need for any further act or deed, other than appropriate amendment of the record of the relevant court or tribunal.
Pursuant to section 413(1)(g) of the Act, as from the Effective Time (as defined in the Schemes), the defendant to whom the relevant Assets or Liabilities of a plaintiff are transferred under a Scheme, or any director of that defendant from time to time, may sign all documents and do all things required to be done by the relevant plaintiff to complete or perfect the transfer of the Assets and Liabilities of that plaintiff provided for in these orders, whether by lodgement, registration, notification or otherwise.
Liberty be reserved to any party to apply for any further orders as may be considered necessary or desirable under section 413 of the Act.
These orders be entered forthwith.

REASONS FOR JUDGMENT 1 On 7 December 2009 I made orders pursuant to s 411(1) of the Corporations Act 2001 (Cth) that each of the plaintiffs convene a meeting of its members "for the purpose of considering and, if thought fit, agreeing (with or without modification)" to a scheme of arrangement proposed in respect of each plaintiff. The meetings were held in accordance with those orders and on 16 December 2009 I made orders pursuant to s 411(4)(b) of the Act approving the schemes (Schemes) involving each of the first to eleventh and thirteenth to twentieth plaintiffs and its respective members. I also made certain consequential orders. In my reasons published on 21 December 2009 (Earlier Reasons) I explained the nature of the Schemes and gave reasons for the orders made on 7 and 16 December 2009: Millennium CHPP Pty Ltd v Millennium Coal Pty Ltd [2009] FCA 1556. 2 On 28 May 2010 I made orders approving the schemes (Balance Schemes) involving the twelfth plaintiff, Excel Employment Services Pty Ltd and the twenty-first plaintiff, North Goonyella Coal Mine Management Pty Ltd (Balance Scheme Companies). These are my reasons for those orders. The Earlier Reasons provide background and explanations relevant to these reasons and should be read in conjunction with them. Before proceeding further, however, it is necessary, to correct an erroneous statement in my Earlier Reasons. 3 In the Earlier Reasons I referred to the orders made on 7 December 2009 for the calling of meetings of the Scheme companies. In the Earlier Reasons at [9] I stated: Evidence was adduced to show that, with the exception of two companies, meetings of the transferor companies were held. The exceptions were in respect of the twelfth plaintiff, Excel Employment Services Pty Ltd and the twenty-first plaintiff, North Goonyella Coal Mine Management Pty Ltd. 4 That statement was not correct. In fact meetings of all the Scheme companies were held. In all cases the relevant scheme was approved by the members; it was only the Court's approval of the Balance Schemes that was sought to be deferred. At the hearing on 16 December 2009, Mr Oakes, senior counsel for the plaintiffs was granted leave to stand over the applications in respect of the Balance Schemes to a later date. The reason for the delay was that additional employees (Employees) of each of those companies had been identified and it was proposed to transfer the Employees before proceeding with the Balance Schemes. 5 The hearing for the Court's approval of the Balance Schemes was held on 28 May 2010 at which time the plaintiffs adduced evidence sufficient to satisfy me that the difficulty concerning the Employees had been resolved and that all other necessary consents to the Balance Schemes had been obtained and were still current. The plaintiffs tendered a letter from the Australian Securities and Investments Commission (ASIC) dated 27 May 2010 stating that ASIC has no objection to the Balance Schemes and did not propose to appear at the hearing. At the hearing on 28 May 2010 the plaintiffs relied upon evidence tendered at the hearings on 7 and 16 December 2009 in addition to further affidavits read at that hearing. 6 The affidavit of Marisha Renee Hochen, sworn on 21 May 2010, addressed the issue of the Employees referred to in [4] above. Those issues were also addressed in two affidavits of Ferdinand Kruger sworn respectively on 21 May 2010 and 27 May 2010. Ms Hochen is a Senior Financial Accountant for Peabody Energy Australia Pty Ltd and is responsible for preparing the annual statutory accounts and financial balance sheets for the PEA group of companies. Ms Hochen deposed to the fact that the employment of each of the Employees had either been terminated or transferred to Peabody Energy Coal Pty Limited (PEAC) and that PEAC had taken over all liabilities associated with the Employees. 7 Ms Hochen's evidence was confirmed with additional detail in relation to two employees by the evidence of Ferdinand Kruger in his affidavit sworn on 21 May 2010. Mr Kruger is the Manager - Human Resources of Peabody Energy Australia Pty Ltd and has human resources responsibility for PEAC which is the principal employing entity for the Peabody group of companies. 8 Ms Hochen was also responsible for updating the Balance Sheets each of the Balance Scheme Companies and Peabody (Bowen) Pty Ltd and Peabody Australia Mining Limited (the Balance Transferee Companies). The Balance Sheets were exhibited to the affidavit of Shane Matthew Young sworn on 5 December 2009 which had been read at the hearing on 7 December. Ms Hochen testified that the updated Balance Sheets show that "the position of third party creditors is not materially worse than the position … set out in the Balance Sheets". 9 In her affidavit sworn on 25 May 2010, Janette Hewson, General Manager, Legal of Peabody Energy Australia Pty Ltd stated that she is the company secretary of each of the Balance Scheme Companies and the Balance Transferee Companies. Ms Hewson testified that "having regard to the Updated Balance Sheets" referred to by Ms Hochen, the boards of each of the Balance Scheme Companies had made resolutions in support of the Balance Schemes. She also testified that the Balance Transferee Companies were aware of the application for approval and did not wish to appear and were "content with any orders under section 413 … which may be necessary to effect the reconstruction contemplated by the Proposed Balance Schemes". 10 On the basis of the evidence presented at the hearings on 7 and 16 December 2009 and on 28 May 2010 I was satisfied that the Court should approve the Balance Schemes and that the orders sought by the plaintiffs pursuant to s 413 of the Corporations Act should be made. 11 Order 1 of the orders made on 28 May 2010 referred to "the schemes of arrangement between each of the Twelfth and Twenty-First Plaintiffs and its respective members, in the form set out in Annexure 'A'" to the orders. Order 2 was as follows: Pursuant to Order 35 Rule 7 of the Federal Court Rules, order that Annexure 'A' to these Orders be substituted for Annexure 'A' to the Orders made on 16 December 2009, such substitution to be with effect on and from 16 December 2009. 12 The reason for seeking an order in this form was explained in the affidavit of Peter William Stokes sworn on 28 May 2010. Mr Stokes explained that the plaintiffs had inadvertently tendered an outdated version of the Scheme Document for attachment to the orders made on 16 December 2009. Mr Stokes referred to the affidavit of Thomas McLean Washington which was sworn and filed in this proceeding on 14 December 2009. A copy of the Scheme Document was annexed to Mr Washington's affidavit. Mr Stokes testified that this was the version of the Scheme Document that was considered and approved by each of the members of the plaintiffs and which the plaintiffs intended to tender for attachment to the orders of 16 December 2009. It is this version that is attached to the orders made on 28 May 2010. In so far as the orders made on 16 December 2009 refer to the outdated version of the Scheme Document, I am satisfied that the orders do not reflect the intention of the court and that this was because of an accidental slip or omission as referred to in O 35 r 7(3) of the Federal Court Rules. In accordance with that rule it is appropriate that the slip or omission be corrected by making the order sought by the plaintiffs. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Stone.

Millennium CHPP Pty Ltd v Millennium Coal Pty Ltd

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