10 June 2024

International Cases

Re. Cassini Resources Ltd; Ex Parte Cassini Resources Ltd.




Court is not bound to approve any scheme and have discretionary over the same

The Plaintiff, Cassini Resources Ltd (Cassini), applies for orders approving two proposed schemes of arrangement (Acquisition Scheme and Demerger Scheme). The issue raised in present case is whether the substantive and procedural requirements under Section 411(1) of the Corporations Act, 2001 had been satisfied.

The Court has a discretion to approve a scheme under Section 411(4)(b) and is not bound to approve a scheme just because the Court previously made orders for the convening of a meeting or because the statutory majorities have been achieved. That said, the court will usually approach the task on the basis that, shareholders are better judges of what is in their commercial interests than the court.

There is no evidence that, the shareholders voted for an improper purpose. Present Court is satisfied on the evidence that has been filed by Cassini that the members voted in good faith and for a proper purpose as: the purpose of the proposed Schemes is for an acquisition and associated demerger transaction of a kind ordinarily approved by the court, which do not involve the novel treatment of rights; (b) the independent expert opined that in the absence of an alternate proposal (and none has emerged), the Schemes are in the best interests of shareholders; and (c) neither ASIC nor any shareholder appeared at the second court hearing to object to approval of the proposed Schemes.

The proposed acquisition of Cassini and demerger was of such a nature that, there was no apparent reason that it should not receive approval, if the requisite voting majorities were achieved at the Scheme meetings. Nothing has occurred since the date of the first hearing to change this view. The shareholders who voted at the meetings overwhelmingly supported the proposed Acquisition and Demerger Schemes. No shareholder appeared to oppose the orders sought at the second court hearing. The proposed Schemes are fair and reasonable and are Schemes that sensible business people might consider to be of benefit to shareholders.

ASIC has provided a written statement to the effect that, it does not object to the Schemes pursuant to Section 411(17)(b) of the Act. As a result, the requirements of Section 411(17) have been satisfied. In any event, having regard to the nature of the proposed restructure, it cannot be said that, the Schemes were proposed to avoid the operation of chapter 6 of the Act. There is no evidence before the Court that, the proposed Schemes offend any aspect of public policy. Given the nature of the proposed Schemes, it could not be sensibly suggested that the Schemes offend public policy. The substantive and procedural requirements under Section 411(1) of the Act had been satisfied and present Court approves the proposed Schemes.

Tags : Amended scheme Approval

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