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Dominion Mining Limited, in the matter of Dominion Mining Limited [2010] FCA 1504

by Martha.Ware 11. May 2011 08:04

Facts

This case concerned an application by Dominion Mining Limited (“the Company”) for orders that the court convene a meeting of its members for the purpose of considering a scheme of arrangement between the Company and its shareholders: [1]. The proposed scheme will result in the Company becoming a wholly owned subsidiary of Kingsgate Consolidated Limited and will give the Company’s shareholders and option holders approximately 24% of Kingsgate. 

 

The prerequisites for the making of orders under s 411(1) of the Corporations Act 2001 have been satisfied, that is, it is clear that the Company is a Part 5.1 body as referred to in s 411: [10].

 

A copy of the proposed scheme booklet to be distributed to members and option holders has been provided to ASIC who has indicated that it does not intend to propose to make submissions or oppose the schemes: [11]. His Honour was taken through, in detail, the contents of the scheme booklet which discloses sufficient details of the scheme to enable persons affected by the scheme to make an informed decision: [12].

 

The schemes have been unanimously recommended by directors of the Company and KPMG has provided a detailed report expressing an opinion that the scheme is fair and reasonable: [13].

 

The court’s attention was drawn to a number of matters that may be relevant to its exercise of discretion: [15]. The question of whether to approve the scheme is a question to be considered by the court at a second hearing when approval of the scheme is sought if agreed to by the requisite majorities: [21]. Attention was also brought to the operation of s 3(a)(10) of the Securities Act 1933 of the United States.  That section provides for an exemption for the registration of offers and sale of securities where an exchange transaction is involved.  A condition of that exemption is that the court that approves such an exchange transaction is informed, that the issuer intends to rely on the court’s approval in order to obtain exemption in the United States, which has been done.  It is not, however, for the Court to express any view as to whether the procedures or processes are sufficient to satisfy the requirements for the exemptions in the US: [23].

 

Outcome

The court was satisfied that the proposed scheme booklet is adequate to disclose to the members of the Company information relevant to the making of their decision as to whether vote in favour or against the proposed resolutions at the meeting the Company seeks to convene.

 

 

Relevant paragraphs of Ford

[24.071], [24.150]

Tags:

Ford's Principles of Corporations Law



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