Corvette Resources Limited, In the matter of Corvette Resources Limited [2010] FCA 78 (9 February 2010)

Last Updated: 16 February 2010

FEDERAL COURT OF AUSTRALIA

Corvette Resources Limited, In the matter of Corvette Resources Limited

[2010] FCA 78

Citation:		Corvette Resources Limited, In the matter of Corvette Resources Limited
Parties:		CORVETTE RESOURCES LIMITED
File number:		WAD 221 of 2009
Judge:		GILMOUR J
Date of judgment:		9 February 2010
Legislation:		Corporations Act 2001 (Cth) s 411
Cases cited:		GRD Limited, In the matter of GRD Limited (2009) FCA 1595
Date of hearing:	21 December 2009, 9 February 2010
Place:	Perth
Division:	GENERAL DIVISION
Category:	No Catchwords
Number of paragraphs:	8
Counsel for the Plaintiff:	Mr G Young
Solicitor for the Plaintiff:	Steinepreis Paganin

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION	WAD 221 of 2009

IN THE MATTER OF CORVETTE RESOURCES LIMITED
(ABN 83 103 006 542)

CORVETTE RESOURCES LIMITED (ABN 83 103 006 542) Plaintiff

JUDGE:	GILMOUR J
DATE OF ORDER:	9 FEBRUARY 2010
WHERE MADE:	PERTH

THE COURT ORDERS THAT:

1. The Scheme of Arrangement between the plaintiff and its members; and being Appendix 2 to the Scheme Booklet (which incorporates the Explanatory Statement) which is included in Annexure “PBM-11” to the affidavit of Patrick Bernard McManus sworn 4 December 2009 and agreed to by a resolution of the members of the plaintiff at a meeting of its members on 28 January 2010, be approved.
2. The plaintiff be exempted from compliance with s 411(11) of the Act.
3. An office copy of this Order be lodged with the Australian Securities and Investments Commission within 14 days.
4. These orders have effect from the date of this order.
   

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION	WAD 221 of 2009

IN THE MATTER OF CORVETTE RESOURCES LIMITED
(ABN 83 103 006 542)

CORVETTE RESOURCES LIMITED (ABN 83 103 006 542) Plaintiff

JUDGE:	GILMOUR J
DATE:	9 FEBRUARY 2010
PLACE:	PERTH

REASONS FOR JUDGMENT

1. The plaintiff has applied for orders approving a scheme of arrangement (Scheme).
2. On 21 December 2009 the Court granted leave to Corvette to convene a meeting for the purpose of considering and, if thought fit, approving the Scheme. The purpose of the Scheme is to implement a merger in accordance with Part 5.1 of the Corporations Act 2001 (Cth) between Corvette and Tianshan Goldfields Limited, a publicly listed company listed on the ASX. The Scheme is in a customary form with an exchange of listed shares whereby the members of Corvette will receive two new Tianshan shares for each of their shares in Corvette, which are to be transferred to Tianshan. If approved and implemented, the Scheme will result in Corvette becoming a wholly-owned subsidiary of Tianshan.
3. I am satisfied that the formal requirements of Part 5.1 of the Corporations Act have been met. In particular, I am satisfied that the requirements of s 411 of the Corporations Act have been met.
4. The Scheme meeting was held on 28 January 2010. The Scheme has been overwhelmingly approved by members satisfying the majority requirements under s 411(4)(a)(ii) of the Corporations Act. ASIC was served on 4 February 2010 with a certified copy of the minutes of the shareholders meeting and has had a reasonable time to examine the terms of the Scheme and to make submissions to the Court. ASIC has, however, provided written notice that it does not intend to appear at today’s hearing and that it has no objection to the Scheme.
5. There is no evidence to suggest that the Scheme has been proposed other than in good faith and for a proper purpose. There is nothing in Corvette’s constitution which is contrary to the Scheme. The conditions precedent to the implementation of the Scheme, save for that which requires its approval by this Court have been either satisfied or waived. In the independent expert’s report, forming part of the Scheme booklet and which is annexed to the affidavit of Casey Jessie Grimshaw sworn 2 February 2010, the independent expert has concluded that the Scheme is “not fair but reasonable” and that, in the circumstances, is in the best interests of the Scheme participants.
6. The independent expert arrived at this conclusion after considering a number of factors in assessing the reasonableness of the Scheme including:

(a) Corvette’s need for cash in the immediate term and Tianshan’s strong cash position and the fact that there are no other assets to apply those funds towards;

(b) the creation of a large Merged Entity which may place the Merged Entity in a stronger position to take further strategic acquisitions in the minerals exploration industry; and

(c) the likely increasing liquidity of the proposed merged groups securities.

7. This application, in that respect, is similar to the position in the case of GRD Limited (2009) FCA 1595 and what I had to say there at paras [28]-[31] is apt to this case so far as it concerns the independent expert’s conclusion that the Scheme is not fair but reasonable. I am satisfied that the Scheme is in the best interests of the scheme participants.
8. There will be orders approving the Scheme in terms of Corvette’s minute of proposed orders dated 5 February 2010.
   

I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour.

Associate:

Dated: 9 February 2010