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The court had previously made orders calling a scheme meeting under Pt 5.1 of the Corporations Act 2001 (Cth). The scheme was for the acquisition of Aldridge by AWH (an entity listed on ASX) and another company, Vetter, so that Aldridge became their incorporated joint venture vehicle. The scheme was passed at the meeting.
ASIC issued a statement under s 411(17)(b) stating it did not oppose the scheme. The court cannot approve a scheme unless s 411(17) has been complied with. Section 411(17)(a) and (b) are alternatives and while the ASIC statement is not binding on the court, it removes the requirement that the court be satisfied that the scheme is not for a prohibited purpose: [12-14]. There is still a residual judicial discretion under s 411(4)(b) in this respect. To the extent that it was necessary, the court was satisfied.
The current application was for approval of the scheme by the court with one additional condition under s 411(6) such that lodgement of the court order with ASIC not occur until after AWH’s securities be reinstated on ASX. This was because part of the scheme involved unlisted shares in Aldridge being converted to shares in AWH which would be tradeable after a twelve month escrow period. Section 411(6) empowers the court to grant approval to a scheme subject to conditions or alterations it considers just.
At [21-2] the judgment discusses five propositions relevant to the exercise of that power:
the condition is minor and does not affect the details of the scheme,
the discretion must be exercised at the time the scheme is being approved,
the condition assists the smooth working of the scheme without affecting its substance,
the condition has the effect of putting the scheme into a form consistent with meeting and voting procedures and the regime set out in the Explanatory Memorandum, and
while the discretion is large, the condition should so novel as to be beyond the reasonable contemplation of shareholders at the time they met and voted.
The reinstatement of AWH’s listing was held to not be within Aldridge’s power. If the Effective Date of the Scheme were to be before relisting there would be an impediment to it being effective. Otherwise, the scheme remained unchanged and there was no disadvantage to members to have the additional condition.
The court was therefore satisfied that the condition should be imposed.
An order was also sought and made under s 413(1)(f) to provide for the consideration under the scheme to be held in escrow by Vetter for the twelve month period to eliminate performance risk. Vetter submitted to the court’s jurisdiction in this regard.
Relevant paragraphs of Ford
[24.020], [24.050], [24.060], [24.071], [24.170]