McBain v Bellamy’s Australia Ltd; Bellamy’s Australia Ltd v McBain [2018] NSWSC 1152

McBain v Bellamy’s Australia Ltd; Bellamy’s Australia Ltd v McBain [2018] NSWSC 1152

The AGM materials did not sufficiently inform shareholders that accelerated vesting of options on termination would be a termination benefit under Div 2 of Pt 2D.2 of the Corporations Act 2001 (Cth), did not draw attention to the s 200G cap, and did not state the manner in which the value of the benefit would be calculated or the matters likely to affect that calculation. The words "and for all other purposes" were not enough to alert a reasonable shareholder to approval under s 200E. Accordingly, the requirements of s 200E were not met, there was no valid shareholder approval of Ms McBain's termination benefits, and the summons had to be dismissed.

Jurisdiction
Australia
Judgment Date
26 July 2018
Procedural Posture
Equity Commercial List Proceeding Concerning Termination Benefits Under the Corporations Act 2001 (cth) / Principal Judgment After Hearing of Summons and Cross Claim
Outcome
Summons dismissed; proceedings dismissed.
Legal Topics
['termination Payments' 'member Approval' 'executive Officer Benefits' 'long Term Incentive Plan' 'share Options' 'asx Listing Rules']
['corporations' 'equity'] ['termination Payments' 'member Approval' 'executive Officer Benefits' 'long Term Incentive Plan' 'share Options' 'asx Listing Rules']

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Procedural Posture

Equity Commercial List Proceeding Concerning Termination Benefits Under the Corporations Act 2001 (cth) / Principal Judgment After Hearing of Summons and Cross Claim

Legal Issues

  1. 1 ["Whether Bellamy's shareholders approved Ms McBain's termination benefits for the purposes of s 200E(1B) of the Corporations Act 2001 (Cth)." 'Whether the notice of the 30 October 2014 AGM set out details of the benefit, including the manner in which its value was to be calculated and matters likely to affect calculation of that value, for the purposes of s 200E(2)(b)(ii).' "Whether Ms McBain could claim the benefit of the remaining 388,522 options without Bellamy's breaching the cap in s 200G of the Corporations Act 2001 (Cth)."]

Ratio Decidendi

The AGM materials did not sufficiently inform shareholders that accelerated vesting of options on termination would be a termination benefit under Div 2 of Pt 2D.2 of the Corporations Act 2001 (Cth), did not draw attention to the s 200G cap, and did not state the manner in which the value of the benefit would be calculated or the matters likely to affect that calculation. The words "and for all other purposes" were not enough to alert a reasonable shareholder to approval under s 200E. Accordingly, the requirements of s 200E were not met, there was no valid shareholder approval of Ms McBain's termination benefits, and the summons had to be dismissed.

Court Disposition

Summons dismissed; proceedings dismissed.

Orders

  • ['The Summons is to be dismissed.' 'The proceedings must be dismissed.' 'The parties were invited to confer and agree on the orders necessary to give effect to the reasons, including as to costs.']