Capilano Honey Limited, in the matter of Capilano Honey Limited (No 2) [2018] FCA 1925

Capilano Honey Limited, in the matter of Capilano Honey Limited (No 2) [2018] FCA 1925

The Court approved the scheme because Capilano complied with the convening orders, shareholders approved the scheme by the statutory majorities, all conditions other than Court approval were met or waived, disclosure was full and fair, and the scheme was fair and reasonable. ASIC's refusal to provide a no objection letter did not prevent approval because the Court was satisfied that the arrangement was not proposed for the purpose of avoiding s 606, s 650C or any other Chapter 6 provision within s 411(17)(a). The Court also was not satisfied that ASIC's public policy concerns about the proprietary company and custodian structure outweighed the commercial judgment of fully informed...

Jurisdiction
Australia
Judgment Date
23 November 2018
Procedural Posture
Application to Approve a Scheme of Arrangement Under S 411(4)(b) of the Corporations Act 2001 (cth) / Second Court Hearing After Scheme Meeting
Outcome
Application granted; scheme approved.
Legal Topics
['schemes of Arrangement' 'takeovers' 'stub Equity' 'proprietary Companies' 'custodian Arrangements' 'asic No Objection Letter' 'chapter 6 Avoidance' 'public Policy']
['corporations Law'] ['schemes of Arrangement' 'takeovers' 'stub Equity' 'proprietary Companies' 'custodian Arrangements' 'asic No Objection Letter' 'chapter 6 Avoidance' 'public Policy']

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Procedural Posture

Application to Approve a Scheme of Arrangement Under S 411(4)(b) of the Corporations Act 2001 (cth) / Second Court Hearing After Scheme Meeting

Legal Issues

  1. 1 ['Whether the scheme was proposed for the purpose of enabling any person to avoid the operation of any of the provisions of Chapter 6 of the Corporations Act 2001 (Cth), including s 606 or s 650C.' 'Whether the use of a proprietary company and custodian arrangement for scrip consideration was contrary to public policy so that the Court should refuse approval.' 'Whether the statutory and procedural requirements for approval of the scheme under s 411(4)(b) were satisfied.']

Ratio Decidendi

The Court approved the scheme because Capilano complied with the convening orders, shareholders approved the scheme by the statutory majorities, all conditions other than Court approval were met or waived, disclosure was full and fair, and the scheme was fair and reasonable. ASIC's refusal to provide a no objection letter did not prevent approval because the Court was satisfied that the arrangement was not proposed for the purpose of avoiding s 606, s 650C or any other Chapter 6 provision within s 411(17)(a). The Court also was not satisfied that ASIC's public policy concerns about the proprietary company and custodian structure outweighed the commercial judgment of fully informed...

Court Disposition

Application granted; scheme approved.

Orders

  • ['Pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth), the scheme of arrangement between the plaintiff and its members set out in Tab 4, page 6 of exhibit RMS-1 be approved.' 'The plaintiff lodge these orders with the Australian Securities and Investments Commission as soon as practicable.' 'Pursuant to s...