Re Goodyear Australia Limited; Kelly-Springfield Australia Pty Limited v Green & Ors [2002] NSWSC 53

Re Goodyear Australia Limited; Kelly-Springfield Australia Pty Limited v Green & Ors [2002] NSWSC 53

The Court held that 'fair value' under the Corporations Act is determined by valuing the company as a whole assuming 100% ownership, allocating value between classes (preference and ordinary shares) based on statutory criteria, then pro rata within each class. No additional premium for forcible taking is permitted for compulsorily acquired shares as this would violate s667C(1)(c) and statutory intention to prevent greenmailing. The offer price of $3.00 per share exceeded the expert's fair value range, satisfied statutory and constitutional requirements, and the application for compulsory acquisition was granted.

Jurisdiction
Australia
Judgment Date
14 February 2002
Procedural Posture
Application for Approval of Compulsory Acquisition of Shares / Judgment After Contested Hearing
Outcome
Application granted (compulsory acquisition approved)
Legal Topics
['takeover of Preference Shares' 'compulsory Acquisition' 'valuation Principles' 'acquisition on Just Terms' 'fair Value' 'allocation Between and Within Classes' 'judicial Restraint on Constitutional Issues']
['corporations Law' 'constitutional Law' 'statutory Interpretation'] ['takeover of Preference Shares' 'compulsory Acquisition' 'valuation Principles' 'acquisition on Just Terms' 'fair Value' 'allocation Between and Within Classes' 'judicial Restraint on Constitutional Issues']

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Procedural Posture

Application for Approval of Compulsory Acquisition of Shares / Judgment After Contested Hearing

Legal Issues

  1. 1 ["How should a separate class of preference shares be valued so that 'fair value' is paid upon compulsory acquisition under the Corporations Act?" "Does payment of 'fair value' amount to 'just terms' as required by s51(xxxi) Constitution of Australia if s51(xxxi) applies?" "Is a premium for forcible taking or special value allocation required or permissible in 'fair value'?"]

Ratio Decidendi

The Court held that 'fair value' under the Corporations Act is determined by valuing the company as a whole assuming 100% ownership, allocating value between classes (preference and ordinary shares) based on statutory criteria, then pro rata within each class. No additional premium for forcible taking is permitted for compulsorily acquired shares as this would violate s667C(1)(c) and statutory intention to prevent greenmailing. The offer price of $3.00 per share exceeded the expert's fair value range, satisfied statutory and constitutional requirements, and the application for compulsory acquisition was granted.

Court Disposition

Application granted (compulsory acquisition approved)

Orders

  • ['The application by Kelly-Springfield Australia Pty Limited for approval of acquisition of the preference shares in Goodyear Australia Limited is granted. See paragraphs 100 to 103.']