Kasbah Resources Limited, in the matter of Kasbah Resources Limited (No 2) [2016] FCA 1518

Kasbah Resources Limited, in the matter of Kasbah Resources Limited (No 2) [2016] FCA 1518

The application was dismissed because the expert supporting the Scheme acknowledged a fundamental error in valuation methodology and changed the opinion to 'not fair, but reasonable', so the basis on which shareholders had voted had substantially changed; merely adjourning would create uncertainty and require further expense. The objecting shareholders were awarded reasonable costs, including 50% of reserved costs, because their opposition and expert evidence brought about the abandonment of the Scheme in its current form and dismissal of the application.

Jurisdiction
Australia
Judgment Date
12 December 2016
Procedural Posture
Application for Court Approval of a Scheme of Arrangement / Second Court Hearing; Dismissal of Application and Costs
Outcome
The plaintiff's application for approval of the Scheme of Arrangement was dismissed with costs in favour of the objecting shareholders, including 50% of reserved costs.
Legal Topics
['scheme of Arrangement' 'costs' 'dismissal of Application']
['corporations'] ['scheme of Arrangement' 'costs' 'dismissal of Application']

Case Brief

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Procedural Posture

Application for Court Approval of a Scheme of Arrangement / Second Court Hearing; Dismissal of Application and Costs

Legal Issues

  1. 1 ["Whether the application for approval of the Scheme of Arrangement should be adjourned or dismissed after Kasbah's expert changed opinion from 'fair and reasonable' to 'not fair, but reasonable'." "Whether the plaintiff should pay the objecting shareholders' costs, including reserved costs."]

Ratio Decidendi

The application was dismissed because the expert supporting the Scheme acknowledged a fundamental error in valuation methodology and changed the opinion to 'not fair, but reasonable', so the basis on which shareholders had voted had substantially changed; merely adjourning would create uncertainty and require further expense. The objecting shareholders were awarded reasonable costs, including 50% of reserved costs, because their opposition and expert evidence brought about the abandonment of the Scheme in its current form and dismissal of the application.

Court Disposition

The plaintiff's application for approval of the Scheme of Arrangement was dismissed with costs in favour of the objecting shareholders, including 50% of reserved costs.

Orders

  • ["The plaintiff's application by originating process filed 20 September 2016, for approval of a Scheme of Arrangement between the plaintiff and its members, be dismissed." "The plaintiff is to pay the objecting shareholders' reasonable costs of and incidental to the conduct of their opposition to the application for...