Capilano Honey Limited, in the matter of Capilano Honey Limited [2018] FCA 1568

Capilano Honey Limited, in the matter of Capilano Honey Limited [2018] FCA 1568

There is a sufficient nexus between the HoldCo Share Offer and the scheme, so it forms part of the arrangement for s 411 purposes, entitling it to the s 708(17) disclosure exemption, and does not contravene s 113(3). Any fairness and public policy concerns relating to custodian arrangements and proprietary company scrip can be sufficiently considered via disclosure and at the second court hearing. Thus, it is just and appropriate to convene the scheme meeting and approve the despatch of scheme documents.

Jurisdiction
Australia
Judgment Date
18 October 2018
Procedural Posture
Scheme of Arrangement Application / Leave to Convene Shareholders' Meeting (first Court Hearing)
Outcome
Application to convene shareholders' scheme meeting granted; directions and dispensation granted as specified.
Legal Topics
['scheme of Arrangement' 'capital Raising' 'disclosure Requirements' 'custodian Arrangements' 'takeovers']
['corporations'] ['scheme of Arrangement' 'capital Raising' 'disclosure Requirements' 'custodian Arrangements' 'takeovers']

Case Brief

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Procedural Posture

Scheme of Arrangement Application / Leave to Convene Shareholders' Meeting (first Court Hearing)

Legal Issues

  1. 1 ["Whether the HoldCo Share Offer forms part of the 'arrangement' under s 411 of the Corporations Act" 'Whether the offer is exempt from disclosure under s 708(17) of the Corporations Act' 'Whether the use of a custodian is consistent with public policy and fairness' 'Whether shareholders are ‘absolutely entitled’ to shares held by a custodian for capital gains tax rollover relief']

Ratio Decidendi

There is a sufficient nexus between the HoldCo Share Offer and the scheme, so it forms part of the arrangement for s 411 purposes, entitling it to the s 708(17) disclosure exemption, and does not contravene s 113(3). Any fairness and public policy concerns relating to custodian arrangements and proprietary company scrip can be sufficiently considered via disclosure and at the second court hearing. Thus, it is just and appropriate to convene the scheme meeting and approve the despatch of scheme documents.

Court Disposition

Application to convene shareholders' scheme meeting granted; directions and dispensation granted as specified.

Orders

  • ['The Plaintiff (Capilano Honey Limited) to convene a meeting of holders of ordinary shares to consider, and if thought fit, approve the scheme of arrangement on 15 November 2018.' 'Documents including the scheme booklet, proxy and election forms approved for dispatch to scheme participants by specified methods.'...