AGL Energy Services (Queensland) Pty Limited v AGL Energy Services Pty Limited [2010] FCA 453 | Case summary

Judgment (7 paragraphs)

[1]

Pursuant to s 411(1) of the Corporations Act 2001 (the Corporations Act): (a) The Plaintiff convene a meeting of AGL Sales Pty Limited (ESQ Member)as its sole member, to be held on 20 April 2010 commencing at 10:30 am at Level 22, 101 Miller Street, North Sydney, New South Wales for the purpose of considering and, if thought fit, agreeing (with or without modification) to the proposed scheme of arrangement (in a form substantially equivalent to the form that appears at Attachment A of Exhibit "PASB-10") (the Scheme)between the Plaintiff and ESQ Member (the Scheme Meeting); (b) The explanatory statement is approved for distribution to ESQ Member, accompanied by the notice convening the Scheme Meeting. 2. Pursuant to section 1319 of the Act: (a) Service of the explanatory statement and notice of the Scheme Meeting may be effected by electronic means, or by hand delivery to a person who is a director, company secretary, proxy, corporate representative appointed under s 250D of the Corporations Act (Corporate Representative), or attorney under power, of ESQ Member, at any time before the Scheme Meeting commences; (b) The Scheme Meeting be chaired by Mr Michael Paul McWilliams, or failing him, Mr Stephen John Mikkelsen; (c) ESQ Member, present by proxy, Corporate Representative, or attorney under a power, shall constitute a quorum for the purposes of the Scheme Meeting; (d) The Scheme Meeting may, with the consent of the Chairman and ESQ Member, be conducted by telephone without either being present at the address stipulated in Order 1 above; (e) ESQ Member, being a body corporate, may appoint an individual as its representative to exercise the powers ESQ Member may exercise at the Scheme Meeting; (f) A proxy, appointment of a Corporate Representative, or power of attorney to act on behalf of ESQ Member at the Scheme Meeting may be delivered to the Chairman of the Scheme Meeting at any time before the commencement of the Scheme Meeting; (g) A resolution put to the vote at the Scheme Meeting to approve the Scheme, or any modification to the Scheme, may be decided by ESQ Member or its representative signing a record of the resolution; and (h) Regulations 5.6.11 to 5.6.36A of the Corporations Regulations 2001 not apply to the Scheme Meeting. 3. The proceeding be stood over to 10:15 am on 29 April 2010 for the hearing of any application to approve the Scheme. 4. These Orders be entered forthwith.

REASONS FOR JUDGMENT 1 The plaintiff has applied to the Court for orders pursuant to s 411(1) of the Corporations Act 2001 (Cth) (the Corporations Act). When the application came before me on 14 April 2010, I expressed my reservations about the form of the proposed arrangement between the plaintiff and its sole member. As I then indicated, the purpose for the application was to enliven the provisions of s 413 of the Corporations Act. I adjourned the hearing of the matter until this morning, in order to enable the plaintiff to consider reformulating the proposed arrangement between itself and its only shareholder. An amended scheme of arrangement has now been propounded. 2 The amended scheme cites several matters as follows: a. AGL Sales Pty Limited (the Company Member) is the sole member of AGL Energy Services (Queensland) Pty Limited (the Company);

c. the Company proposes a compromise or arrangement with the Company Member for the purposes of or in connection with the scheme for the reconstruction or amalgamation of the Company and that AGL Energy Services (Queensland) Pty Limited (the Transferee), under which: · the assets of the Company would be transferred to and vested in the Transferee; · all liabilities of the Company would be transferred to and become liabilities of the Transferee; · all legal proceedings pending by or against the Company will be continued by or against the Transferee; and · the Company would be deregistered by the Australian Securities and Investments Commission (the Commission) without winding up; d. the reconstruction or amalgamation will affect the rights which the Company Member has against the Company as a shareholder and diminish the value of the Company Member's property represented by its shareholding in the Company by the proposed scheme, in addition to effecting the transfer and deregistration contemplated by s 413 of the Corporations Act. The scheme provides that the Company Member, as the sole member of the Company, will approve the scheme and consent to the reconstruction or amalgamation, notwithstanding the diminution in the value of its shareholding in the Company and any rights that it may have in connection with the reconstruction or amalgamation at law and waives any rights it may otherwise have as against the Company in connection with the reconstruction or amalgamation. 3 I am satisfied that that scheme now propounded constitutes a compromise arrangement between the Company and its only shareholder within the meaning of s 411. Accordingly, I consider that it is appropriate to accede to the Company's application, under s 411 of the Corporations Act, that a meeting of its member be convened for the purposes of considering, and if thought fit, agreeing to that scheme of arrangement. Assuming the Company Member agrees with the scheme, or a resolution is passed proving it at the meeting, there will no doubt be an application to the Court for approval of the scheme and for the making of orders under s 413 of the Corporations Act. That matter will be considered at the further hearing of the proceeding, which has been fixed for 29 April 2010. The Australian Securities and Investments Commission indicated previously that it did not wish to make any submissions in relation to the proposal and has confirmed that it does not wish to be heard in relation to this application.

AGL Energy Services (Queensland) Pty Limited v AGL Energy Services Pty Limited

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