Re James Hardie Industries Limited [2001] NSWSC 888

(2001) 39 ACSR 552 Reported Decision : [2001] NSWSC 888 [2001] ACL Rep 120 NSW 134

New South Wales Supreme Court

CITATION : Re James Hardie Industries Limited [2001] NSWSC 888 revised - 11/10/2001 CURRENT JURISDICTION: Equity FILE NUMBER(S) : SC 3967/01 HEARING DATE(S) : 08/10/01 JUDGMENT DATE : 8 October 2001

PARTIES : In the matter of JAMES HARDIE INDUSTRIES LIMITED (ACN 000 009 263) and the Corporations Law JAMES HARDIE INDUSTRIES LIMITED (ACN 000 009 263) (Plaintiff) JUDGMENT OF : Santow J

COUNSEL : T F Bathurst, QC (Plaintiff) K Cuneo (Sol) (ASIC - amicus) SOLICITORS : Allens Arthur Robinson (Plaintiff) CATCHWORDS : CORPORATIONS - Scheme of Arrangement - subsequent change in circumstances just before second approval meeting - Effect on approval of scheme - Necessary safeguards - Short opportunity for further objection. Re Adams International Food Traders Pty Limited [1988] 13 ACLR 586 CASES CITED : Cleary and Another v Australian Co-operative Food Ltd and Ors (Nos 2 and 3) (1999) 32 ACSR 701 Re Minster Assets plc [1985] BCLC 200 Re Telford Inns Pty Limited (1985) 10 ACLR 312 DECISION : Scheme approved.

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

No. 3967/01 In the matter of JAMES HARDIE INDUSTRIES LIMITED (ACN 000 009 263) and the Corporations Law JAMES HARDIE INDUSTRIES LIMITED (ACN 000 009 263) Plaintiff

Judgment ex tempore 8 October 2001 (REVISED 11 October 2001)

INTRODUCTION 1 The short point before me concerns the effect on the Court's anticipated approval of a share scheme of arrangement of an announced tax change. That tax change requires new legislation in Australia as well as US formalities, whereby both countries adopt a varied US/Australia tax treaty. That is anticipated to take place by 1 July 2003 though that outcome cannot be wholly certain. This treaty change would remove US withholding tax on dividends paid by US companies which are held as to 80% or more by an Australian holding company, being in this case James Hardie Industries Limited ("JHIL"). The salient matters concerning the scheme and the effect of these tax changes are set out in the narrative of facts below. Importantly, they include that the scheme document actually made reference to the possibility of tax changes of the kind now announced. So if there were thereby brought about a material change of circumstances, it was a change not unanticipated. Moreover, it was thought even then unlikely to make sufficient difference to render the scheme restructure no longer the preferred option.