David Jones Limited, in the matter of David Jones Limited (No 3) [2014] FCA 753

David Jones Limited, in the matter of David Jones Limited (No 3) [2014] FCA 753

Notwithstanding ASIC’s concerns regarding the potential for a collateral benefit to Mr Lew via the Country Road Bid and the absence of an independent expert's report prior to the Scheme Meeting, the Court found that the procedural requirements were met, disclosure (including supplementary disclosure) was sufficient in the circumstances, Mr Lew abstained from voting, the approval threshold was amply exceeded, and no shareholder opposed or sought adjournment. On this balance it was appropriate to approve the scheme under s 411(4)(b).

Parties
Plaintiff: David Jones Limited
Jurisdiction
Australia
Judgment Date
17 July 2014
Procedural Posture
Scheme of Arrangement Approval / Final Approval Hearing
Outcome
Scheme of arrangement approved
Legal Topics
Scheme of Arrangement, Collateral Benefit, Disclosure to Shareholders, Approval of Scheme, Integrity of Scheme Process
Corporations Law Scheme of Arrangement Collateral Benefit Disclosure to Shareholders Approval of Scheme Integrity of Scheme Process

Case Brief

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Parties

David Jones Limited

Plaintiff

Procedural Posture

Scheme of Arrangement Approval / Final Approval Hearing

Legal Issues

  1. 1 Whether the scheme of arrangement between David Jones Limited and its ordinary shareholders should be approved under s 411(4)(b) of the Corporations Act 2001 (Cth)
  2. 2 Whether the disclosure to shareholders was adequate in light of potential collateral benefits
  3. 3 Whether absence of an independent expert’s report on the Country Road Bid affected the fairness and reasonableness of the scheme

Ratio Decidendi

Notwithstanding ASIC’s concerns regarding the potential for a collateral benefit to Mr Lew via the Country Road Bid and the absence of an independent expert's report prior to the Scheme Meeting, the Court found that the procedural requirements were met, disclosure (including supplementary disclosure) was sufficient in the circumstances, Mr Lew abstained from voting, the approval threshold was amply exceeded, and no shareholder opposed or sought adjournment. On this balance it was appropriate to approve the scheme under s 411(4)(b).

Court Disposition

Scheme of arrangement approved

Orders

  • Pursuant to section 411(4)(b) of the Corporations Act 2001 (Cth), the scheme of arrangement between David Jones Limited and its ordinary shareholders, in the form contained in Annexure D of the scheme booklet (Exhibit 1), is approved.
  • Pursuant to section 411(12), exemption from section 411(11) in relation to the scheme.