FEDERAL COURT OF AUSTRALIA Barrick (Lawlers) Pty Ltd v Barrick Mining Company (Australia) Pty Ltd, in the matter of Barrick (Lawlers) Pty Ltd (No 2) [2016] FCA 110 File number: WAD 684 of 2015 Judge: BARKER J Date of judgment: 5 February 2016 Catchwords: CORPORATIONS – schemes of arrangement – second court hearing – approval granted Legislation: Corporations Act 2011 (Cth) s 411(4)(b), s 411(11), s 413 Cases cited: Barrick (Lawlers) Pty Ltd v Barrick Mining Company (Australia) Pty Ltd, in the matter of Barrick (Lawlers) Pty Ltd [2015] FCA 1510 Centro Properties Ltd and Another v PriceWaterhouseCoopers (2011) 86 ACSR 584; [2011] NSWSC 1465 Date of hearing: 5 February 2016 Registry: Western Australia Division: General Division National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Category: Catchwords Number of paragraphs: 11 Counsel for the Plaintiffs: Mr AJ Papamatheos Table of Corrections 19 February 2016 In the Legislation cited field on the cover page, two pieces of legislation were cited in error and have been removed. ORDERS WAD 684 of 2015 IN THE MATTER OF BARRICK (LAWLERS) PTY LTD (ACN 009 125 259), BARRICK (PLUTONIC) PTY LTD (ACN 004 680 997), BARRICK MINING SERVICES PTY LTD (ACN 050 037 673) AND BARRICK (DARLOT) PTY LTD (ACN 000 761 188) BETWEEN: BARRICK (LAWLERS) PTY LTD (ACN 009 125 259) First Plaintiff BARRICK (PLUTONIC) PTY LTD (ACN 004 680 997) Second Plaintiff BARRICK MINING SERVICES PTY LTD (ACN 050 037 673) (and others named in the Schedule) Third Plaintiff AND: BARRICK MINING COMPANY (AUSTRALIA) PTY LTD) (ACN 006 245 629) Defendant JUDGE: BARKER J DATE OF ORDER: 5 FEBRUARY 2016 THE COURT ORDERS THAT: 1. Pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth) (Act), the schemes of arrangement between each plaintiff and the defendant (the Schemes), in the form set out in Annexure DDK to the affidavit of Daniel David Kirk sworn 2 February 2016, be approved. 2. Pursuant to s 411(12) of the Act, each plaintiff be exempted from compliance with the requirements of s 411(11) of the Act. 3. Pursuant to s 413(1) of the Act (and using the definitions in the Schemes), as from the Effective Time, each of the following transactions will occur, in relation to each Scheme, in the order set out below: (a) Lawlers Scheme (i) first, all Assets of the first plaintiff (Barrick (Lawlers) Pty Ltd) will be transferred to and vested in the Transferee Company without the need for any further act or deed; (ii) secondly, all Liabilities of the first plaintiff will be transferred to and become Liabilities of the Transferee Company without the need for any further act or deed; (iii) thirdly, any legal proceedings pending by or against the first plaintiff will be continued by or against the Transferee Company without the need for any further act or deed, other than an amendment of the record of the relevant court or tribunal; (iv) fourthly, the first plaintiff will be deregistered by ASIC without winding up pursuant to s 413(1)(d) of the Act; (b) Plutonic Scheme (i) first, all Assets of the second plaintiff (Barrick (Plutonic) Pty Ltd) other than the Barrick (Plutonic) Excluded Assets will be transferred to and vested in the Transferee Company without the need for any further act or deed; (ii) secondly, all Liabilities of the second plaintiff other than the Barrick (Plutonic) Excluded Liabilities will be transferred to and become Liabilities of the Transferee Company without the need for any further act or deed; (iii) thirdly, any legal proceedings pending by or against the second plaintiff will be continued by or against the Transferee Company without the need for any further act or deed, other than an amendment of the record of the relevant court or tribunal; (c) MS Scheme (i) first, all Assets of the third plaintiff (Barrick Mining Services Pty Ltd) will be transferred to and vested in the Transferee Company without the need for any further act or deed; (ii) secondly, all Liabilities of the third plaintiff will be transferred to and become Liabilities of the Transferee Company without the need for any further act or deed; (iii) thirdly, any legal proceedings pending by or against the third plaintiff will be continued by or against the Transferee Company without the need for any further act or deed, other than an amendment of the record of the relevant court or tribunal; (iv) fourthly, the third plaintiff will be deregistered by ASIC without winding up pursuant to s 413(1)(d) of the Act; (d) Darlot Scheme (i) first, all Assets of the fourth plaintiff (Barrick (Darlot) Pty Ltd) other than the Barrick (Darlot) Excluded Assets will be transferred to and vested in the Transferee Company without the need for any further act or deed; (ii) secondly, all Liabilities of the fourth plaintiff other than the Barrick (Darlot) Excluded Liabilities will be transferred to and become Liabilities of the Transferee Company without the need for any further act or deed; (iii) thirdly, any legal proceedings pending by or against the fourth plaintiff will be continued by or against the Transferee Company without the need for any further act or deed, other than an amendment of the record of the relevant court or tribunal. 4. Pursuant to s 413(1)(g) of the Act, as from the Effective Time (as defined in the Schemes), the defendant or any director or authorised employee of the defendant from time to time may sign all documents and do all things required to be done by the plaintiffs, or each of them, to complete or perfect the transfer of Assets and Liabilities of the respective plaintiffs provided for in these orders, whether by lodgement, registration, notification or otherwise. 5. Pursuant to s 413(1)(g) of the Act, from the Effective Time, the defendant may use, disclose and otherwise handle all information transferred and vested in it by each plaintiff provided always that the defendant shall receive the information upon the same terms as each plaintiff held the information and subject to the Liabilities of each plaintiff in respect of that information. 6. Liberty be reserved to the plaintiffs and each of them are able to apply for other or any consequential orders as may be considered necessary or desirable under s 413 of the Act. 7. These orders be entered forthwith. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT BARKER J: 1 On 5 February 2016, the Court made orders approving schemes of arrangement (Schemes) between each of the plaintiffs and its member under s 411(4)(b) of the Corporations Act 2001 (Cth), exempting compliance with the requirements of s 411(11), and consequential and related orders under s 413. 2 These are, briefly stated, the reasons for the making of those orders. 3 The Court made the orders primarily on the basis of the plaintiffs' outline of submissions dated 4 February 2016, signed by counsel for the plaintiffs, which were received at the hearing and marked "MF1". 4 Having regard to those submissions, the affidavit material upon which the Court relied in making orders at the first hearing on 24 December 2015 (as to which, see: Barrick (Lawlers) Pty Ltd v Barrick Mining Company (Australia) Pty Ltd, in the matter of Barrick (Lawlers) Pty Ltd [2015] FCA 1510), and the further affidavit material of Daniel David Kirk, Teressa Estelle Trezise, Eliza Jane Egan and Alison Jane Robertson, the Court was satisfied that there had been compliance with the procedural requirements governing the appeal of the Schemes under the Act. 5 In doing so, the Court noted evidence that the Australian Securities and Investments Commission (ASIC) had provided a "no objection" letter on 5 February 2016. 6 The Court was further satisfied that there was full and frank disclosure of matters that should be brought to the Court's attention. This included submissions concerning the potential for so-called "long-tail liabilities" and their interaction with the schemes of arrangement in this case. In that regard, counsel brought to the attention of the Court, in addition to those authorities cited in his submissions, the authority of Centro Properties Ltd and Another v PriceWaterhouseCoopers (2011) 86 ACSR 584 at [105]-[106]; [2011] NSWSC 1465. 7 In this case, any liability that the plaintiffs might have in respect of six workers' compensation claims that have been notified to the third plaintiff will be assumed by the transferee company. In those circumstances, the Court considered that no issue of concern regarding "long-tail liabilities" arose. 8 Whether the Schemes involved a "reconstruction" or an "amalgamation" or both was addressed in the submissions of counsel. The Court was satisfied that, regardless of whether they involved reconstructions or amalgamations or both, they may be approved. The Court accepted the particular submission made by counsel that while perhaps not substantial, there were nonetheless relevant undertakings in the case of each plaintiff company being transferred. 9 It is further noted that the second and fourth plaintiffs will be deregistered under the Act at a later date, whereas the other two plaintiff companies will be subject to orders that result in their deregistration. 10 In summary, the Court accepted the plaintiffs' submissions that: (1) the Court's directions of 24 December 2015 and the statutory requirements had been complied with, including the absence of an objection from ASIC; (2) the Schemes were fair in a general sense, and there was no reason for the Court to exercise its discretion against approval of the Schemes; (3) no creditors appeared to raise any issues unforeseen in the terms of the Schemes proposed and the orders under s 413, which were intended to involve a transfer of assets and liabilities (other than excluded assets and excluded liabilities) that did not adversely affect creditors' rights. 11 For those reasons, the Court was satisfied that it should exercise its discretion to approve the Schemes and make the other consequential orders proposed. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Barker. Associate: Dated: 5 February 2016 SCHEDULE OF PARTIES WAD 684 of 2015 Plaintiffs Fourth Plaintiff: BARRICK (DARLOT) PTY LTD (ACN 000 761 188)