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[2015] FCA 95
Federal Court of Australia
2015-02-05
Ward J, Yates J
Original judgment source is linked above.
Solicitor for the Plaintiff: Herbert Smith Freehills
Solicitor for the Defendants: Herbert Smith Freehills
15 June 2015 In paragraph 25, "I accept that the nineteenth century" has been replaced with "I accept that in the nineteenth century"
15 June 2015 In paragraph 42, "effectively carry out of the scheme" has been replaced with "effectively carry out the scheme"
15 June 2015 In paragraph 46, "lodge" has been replaced with "lodged"
IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1172 of 2014
IN THE MATTER OF FIDUCIAN PORTFOLIO SERVICES LIMITED ABN 13 073 854 931 BETWEEN: FIDUCIAN PORTFOLIO SERVICES LIMITED
AND: FIDUCIAN INVESTMENT MANAGEMENT SERVICES LIMITED ACN 602 441 814
JUDGE: YATES J DATE OF ORDER: 5 FEBRUARY 2015 WHERE MADE: SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1172 of 2014
IN THE MATTER OF FIDUCIAN PORTFOLIO SERVICES LIMITED ABN 13 073 854 931 BETWEEN: FIDUCIAN PORTFOLIO SERVICES LIMITED
AND: FIDUCIAN INVESTMENT MANAGEMENT SERVICES LIMITED ACN 602 441 814
JUDGE: YATES J DATE: 20 FEBRUARY 2015 PLACE: SYDNEY
REASONS FOR JUDGMENT 1 On 22 December 2014, I published my reasons for making orders that a meeting of the plaintiff's members be convened to consider and, if thought fit, agree to a scheme of arrangement in connection with which the plaintiff proposes to restructure the Fiducian Group, of which it is currently the holding company: Fiducian Portfolio Services Limited v Fiducian Investment Management Services Limited [2014] FCA 1396 (my first reasons). These reasons should be read with my first reasons. I will adopt the same abbreviations. 2 Under the restructure, the Fiducian Superannuation Service will be retained by the plaintiff (as a wholly-owned subsidiary of NewCo) and the plaintiff's other businesses will be transferred to other companies in the Fiducian Group - FIM and FSL. 3 The plaintiff's members approved the scheme at the meeting. The plaintiff now seeks an order under s 411(4)(b) of the Act that the scheme be approved by the Court. 4 To give effect to the restructure, the plaintiff also seeks orders under s 413(1) of the Act providing for: the transfer of certain of its property and liabilities to FIM; and the transfer of certain of its property and liabilities to FSL. 5 The plaintiff and NewCo will also enter into and complete a share sale agreement in respect of the plaintiff's shares in FFS, FBS, HBA and MAA, which will be transferred to NewCo: Exhibit E. The transfer of the property and liabilities contemplated by the proposed s 413(1) orders is conditioned on the plaintiff and NewCo doing this. The plaintiff and NewCo have given certain covenants, by way of deed poll, to each scheme shareholder in relation to that transaction: Exhibit B. 6 The transfer of the property and liabilities by the proposed orders is also conditioned on the plaintiff, NewCo, FSL, FFS, FBS, FIM, HBA and MAA entering into a deed of cross-guarantee in favour of each creditor of any member of the Fiducian Group that is a "Group Entity" as defined in the deed, and the lodgement of the executed deed, together with the required certificate, with ASIC: Exhibit D. The companies have entered into a deed poll in favour of each such creditor and each scheme shareholder in relation to that matter: Exhibit C. 7 Practically speaking, if the scheme is approved under s 411(4)(b) and the s 413(1) orders are made, the transfers of the property and liabilities, and the completion of the share sale agreement, will take place, and the deed of cross-guarantee will be entered into, on 1 March 2015. 8 My first reasons explain the scheme, the nature of the business currently conducted by the Fiducian Group, and the purpose and effect of the proposed restructure. I will not repeat that explanation.
The evidence 9 The plaintiff read the following affidavits: (a) Robert Edward Bucknell affirmed 2 February 2015. Mr Bucknell is the chairman of directors of the plaintiff. He was the chairman of the meeting at which the members approved the scheme. Mr Bucknell gave evidence concerning the holding of the scheme meeting and the voting thereat. (b) Peter Renda affirmed 2 February 2015. Mr Renda is employed by Computershare Investor Services Pty Limited (Computershare), which maintains the plaintiff's register of members. He holds the position of Relationship Manager. Computershare was retained by the plaintiff to provide services in relation to the scheme meeting. Mr Renda gave evidence concerning the dispatch of the scheme booklet and proxy form to members; the receipt and recording of proxy votes; the preparation of a proxy summary report; the registration of attendees at the scheme meeting; and voting at the scheme meeting. (c) Two affidavits of Benjamin David Hely affirmed 3 February 2015 and 5 February 2015 respectively. Mr Hely is an employed solicitor with the plaintiff's solicitors, Herbert Smith Freehills. Mr Hely gave evidence concerning the provision of a statement in writing for the purposes of regulation 5.6.13 of the Corporations Regulations 2001 (Cth), in relation to the sending of notices of the scheme meeting to members; the registration of the scheme booklet (explanatory statement) on 5 December 2014; the advertising of the second court hearing to be held on 5 February 2015; and the satisfaction or waiver of conditions precedent to the scheme taking effect.
The scheme 10 The scheme, which provides for the scheme shareholders to exchange their shares in the plaintiff for shares in NewCo on a one-for-one basis, was approved by 93.94% of the members present and voting either in person or by proxy at the meeting. These members represented 99.84% of the votes cast on the resolution. Therefore, the statutory majorities required under s 411(4)(a)(ii) of the Act have been attained. I am satisfied that the meeting was convened in accordance with the orders made on 5 December 2014. 11 I am satisfied that the scheme is fair and reasonable having regard to: the voting at the meeting; the recommendation of the directors ([14] of my first reasons); the opinions expressed in the independent expert's report ([15] of my first reasons); and the information contained in the scheme booklet. 12 ASIC has provided a letter in which it has advised that it has no objection to the scheme: see s 411(17)(b) of the Act. 13 The second court hearing has been advertised in accordance with the orders made on 5 December 2014. No person has come forward to oppose the scheme. 14 All relevant conditions precedent to the scheme have been either satisfied or waived. 15 I am satisfied that the scheme should be approved under s 411(4)(b) of the Act.
The s 413(1) orders 16 Section 413(1) of the Act provides: Where an application is made to the Court under this Part for the approval of a compromise or arrangement and it is shown to the Court that the compromise or arrangement has been proposed for the purposes of, or in connection with, a scheme for the reconstruction of a Part 5.1 body or Part 5.1 bodies or the amalgamation of 2 or more Part 5.1 bodies and that, under the scheme, the whole or any part of the undertaking or of the property of a body concerned in the scheme (in this section called the transferor body) is to be transferred to a company (in this section called the transferee company), the Court may, either by the order approving the compromise or arrangement or by a later order, provide for all or any of the following matters: (a) the transfer to the transferee company of the whole or a part of the undertaking and of the property or liabilities of the transferor body; (b) the allotting or appropriation by the transferee company of shares, debentures, policies or other interests in that company that, under the compromise or arrangement, are to be allotted or appropriated by that company to or for any person; (c) the continuation by or against the transferee company of any legal proceedings pending by or against the transferor body; (d) if the transferor body is a company - the deregistration by ASIC, without winding up, of the transferor body; (e) the provision to be made for any persons who, within such time and in such manner as the Court directs, dissent from the compromise or arrangement; (f) the transfer or allotment of any interest in property to any person concerned in the compromise or arrangement; (g) such incidental, consequential and supplemental matters as are necessary to ensure that the reconstruction or amalgamation is fully and effectively carried out. 17 Section 413(4) of the Act provides: In this section: liabilities includes duties of any description, including duties that are of a personal character or are incapable under the general law of being assigned or performed vicariously. property includes rights and powers of any description, including rights and powers that are of a personal character and are incapable under the general law of being assigned or performed vicariously. 18 I am satisfied that the restructure of the Fiducian Group is a scheme for the reconstruction of a Part 5.1 body or Part 5.1 bodies. I am also satisfied that the scheme is a scheme of arrangement that is proposed for the purposes of, or in connection with, such a scheme for reconstruction. 19 The word "reconstruction", as used in contexts such as s 413(1), does not have a definite legal meaning. In In re South African Supply and Cold Storage Co [1904] 2 Ch 268, Buckley J said (at 286): What does "reconstruction" mean? To my mind it means this. An undertaking of some definite kind is being carried on, and the conclusion is arrived at that it is not desirable to kill that undertaking, but that it is desirable to preserve it in some form, and to do so, not by selling it to an outsider who shall carry it on - that would be a mere sale - but in some altered form to continue the undertaking in such a manner as that the persons now carrying it on will substantially continue to carry it on. It involves, I think, that substantially the same business shall be carried on and substantially the same persons shall carry it on. But it does not involve that all the assets shall pass to the new company or resuscitated company, or that all the shareholders of the old company shall be shareholders in the new company or resuscitated company. Substantially the business and the persons interested must be the same. 20 In In the matter of Stork ICM Australia Pty Ltd; Stork ICM Australia Pty Ltd v Stork Food Systems Australasia Pty Ltd (2007) 25 ACLC 208, Lindgren J quoted this passage with approval when considering the operation of s 413. His Honour also noted (at [74]) that Buckley J's explanation of the meaning of "reconstruction" was adopted in Brooklands Selangor Holdings Ltd v Inland Revenue Commissioners [1970] 1 WLR 429 and in Baytrust Holdings Ltd v Inland Revenue Commissioners [1971] 1 WLR 1333. 21 The plaintiff relied on the following passage from Damian T and Rich A, Schemes, Takeovers and Himalayan Peaks (3rd ed, Ross Parsons Centre of Commercial, Corporate and Taxation Law, 2013) pp 447-448 (citations omitted) as providing a convenient description of a "reconstruction": The Courts have provided the following guidance on the key features of a "reconstruction" (the Courts have not intended these articulated features to be exhaustive): (1) all or substantially all of an undertaking is transferred by a company (the transferor company) to another company (the transferee company) and that undertaking is then carried on by the transferee company; (2) substantially the same business must be carried on by the transferee company as was carried on by the transferor company (this is not to say that the transferee company cannot also have other businesses); (3) the shareholders of the transferee company must be (or, after the reconstruction, become) the same or substantially the same as the shareholders of the transferor company; (4) in relation to point (3) above, the case of an intra-group transfer from one company to another company in the group, it will be sufficient if the shareholders in the ultimate holding company of the transferee and transferor are the same or substantially the same; (5) for there to be a "reconstruction", there is no requirement for the transferee company to take over all or indeed any of the liabilities of the transferor company; and (6) a transfer may still involve a "reconstruction" even if the undertaking is transferred to more than one transferee company. 22 Proposition (6) from that passage is of particular significance because the reconstruction that is proposed here will involve two transferees. 23 In Fallon and Another (Executors of Morgan, Deceased) v Fellows (Inspector of Taxes) [2001] STC 1409, Park J considered the meaning of "scheme of reconstruction or amalgamation" in s 86 of the Capital Gains Tax Act 1979 (UK). After referring to the passage from South African Supply [1904] 2 Ch 268, which I have quoted above, Park J said (at [13]): In the context I think it clear that, when the learned judge referred to the persons carrying on an undertaking, he had in mind the shareholders who were carrying it on through a corporate body. He was referring to persons carrying on an undertaking in the sense of owning it, not in the sense of being involved in the management and conduct of the business operations. The basic concept is that one starts with a group of shareholders who own a business through one corporate vehicle, and one ends with the same group of shareholders or substantially the same group of shareholders, who own the same business or substantially the same business, still though a corporate vehicle, but now through a different corporate vehicle. 24 The case before Park J was a capital gains tax appeal from the Special Commissioners: Fallon and Another (Executors of Morgan, Deceased) v Fellows (Inspector of Taxes) [2001] STC (SCD) 45. Park J noted that the question on appeal was whether certain events were, in law, a scheme of reconstruction. One argument advanced by the appellants was that a scheme of reconstruction was not involved because such a scheme postulates the reconstruction of a single company into another single company. The appellant's proposition was that anything more complicated was not a scheme of reconstruction. 25 In rejecting that contention, Park J said (at [35]-[36]): [35] I accept that in the nineteenth century case of Hooper v Western Counties and South Wales Telephone Co Ltd (1892) 86 LT 78, Chitty J gave a description of a reconstruction in terms which assumed that one company was being reconstructed into a single successor company. I also accept that, in the passage from the judgment of Buckley J in the South African Supply and Cold Storage case which I have already quoted, the judge discussed the position on the basis of the successor company being 'the new or resuscitated company' in the singular. However, the facts of those cases concerned reconstructions from one predecessor company into one successor company, and it was natural that the judges analysed the concept in the ways that they did. It would be entirely wrong to regard their expositions as ossifying the law and ruling out the possibility that there could be a reconstruction in law where the movement is from one predecessor company to two or more successor companies. It is interesting to note that, in Brooklands Selangor Holdings [1970] 1 WLR 429 at 445, Pennycuick J noted a statement of Chitty J in Hooper v Western Counties about a rather different aspect of the meaning of reconstruction in this context, and commented: 'No one, I think, now would put quite such a restricted meaning on the term as that.' In the Brooklands Selangor Holdings case itself there was one company before the reorganisation and there were two companies after it. It is true that Pennycuick J held that there had not been a reconstruction, but that was because the essence of the transaction was a partition, not because it was legally impossible for a movement from one predecessor company to two successor companies to rank as a reconstruction. [36] Further, the capital gains tax provision which applies to the company rather than to the shareholders (s 267 of the 1970 Act at the time of the transaction involved in this case) contemplates that there can be a reconstruction when what is transferred may be the whole or part of the business of the company which is being reconstructed. Where what is transferred is only part of the business it will almost always be the case that business activities which were previously carried on by one company will thereafter be carried on by two companies. 26 There is nothing in s 413(1) which limits a reconstruction to one in which the whole undertaking or all the property of one company is transferred to another. The provision expressly recognises that "the whole or any part of the undertaking or of the property" of the transferor body can be transferred. Once that is recognised, there seems to be no reason in principle why a reconstruction cannot be one under which several parts of the undertaking or property of the transferor body can be transferred. And if that is so, the transfer of separate parts must comprehend several transfers to separate transferees. In my view, the language of s 413(1) accommodates such a case. However, as Buckley J observed in South African Supply [1904] 2 Ch 268, the transfers cannot simply be transfers to outsiders. The conception on which s 413(1) proceeds is that, under a scheme for the reconstruction of a Part 5.1 body or Part 5.1 bodies, substantially the same business will be carried on by substantially the same persons, as explained in Fallon [2001] STC 1409 by Park J. Such is the present case. 27 I am satisfied that, in principle, orders of the kind now proposed - which involve the transfer of several parts of the undertaking or property of the transferor body (the plaintiff) to separate transferees (FIM and FSL), where the transferor body and transferees are members of the one corporate group - can be made under s 413(1). 28 There is, however, one particular order sought by the plaintiff under s 413(1) that requires further consideration. 29 The plaintiff seeks an order to the effect that no party to a contract to be transferred to FIM or FSL, or to another contract to which the plaintiff or a related body corporate is named as a party, shall be entitled to terminate the contract or vary its rights or obligations (or the rights or obligations of the plaintiff, FIM, FSL or another related body corporate of the plaintiff) merely as a result or consequence of the implementation of, or the taking of any act or deed in connection with, the scheme or the transfers contemplated by the s 413(1) orders, or by the scheme booklet. The plaintiff seeks this order in reliance on s 413(1)(g) of the Act. 30 In seeking this restraint, the plaintiff stressed the breadth of s 413(1)(g) which, the plaintiff submitted, is to ensure that schemes of arrangement are carried out as intended by the members and the Court: Re AGL Gas Networks Ltd (2001) 160 FLR 269 at [43]. The plaintiff submitted that the word "necessary", as used in s 413(1)(g), should be given a meaning of "more than desirable but less than vital": Re Norwich Union Linked Life Assurance Ltd [2004] EWHC 2802 (Ch) at [8]. 31 In In the matter of RBS Group (Australia) Pty Ltd - RBS Group (Australia) Pty Ltd v RBS Alternative Investments (Australia) Pty Ltd & Ors (unreported, Sup Ct, NSW, Ward J, 2 February 2012), Ward J considered the operation of s 413(1) in the context of a scheme of arrangement that involved transferring part of the plaintiff's assets, undertakings and liabilities referable to its warrants business to a newly formed single-purpose entity - the first defendant. One aspect of the transaction was the extinguishment of existing guarantees (pertaining to the warrants business) given by the second defendant, and the giving of new guarantees by the third defendant. The extinguishment of the existing guarantees was sought to be effected by orders under s 413(1)(g) of the Act. 32 In that case, the plaintiff advanced a submission that, as the ultimate aim of the proposed transfers included the cessation of the second defendant's involvement in the warrants business, the extinguishment of the guarantees was necessary to ensure that the reconstruction was fully and effectively carried out: RBS Group at [51]. 33 In addressing that submission, Ward J said at [54]: I noted in my oral reasons that I had given some consideration as to whether it could be said that 'necessary' encompassed a condition to a scheme which is effectively a condition imposed by the party putting forward the scheme for approval. On balance I considered that, having regard to what was said in AGL Gas Networks and the manner in which the word has been interpreted in the limited cases in which it has been considered in a similar context, in circumstances where this is a condition that is required to be satisfied in order for the Scheme to come into effect and is necessary to give effect to the intended aims of the Scheme, there is jurisdiction to make the ancillary orders sought. 34 In the present case, the plaintiff submitted that the Court should have regard to the purpose of the scheme, which is to introduce a more focused governance structure for the Fiducian Group and to help eliminate the potential for conflicts of interest, consistent with the plaintiff's obligations under Prudential Standard SPS 521: see [8] of my first reasons. The plaintiff submitted that to enable it and its related bodies corporate, or any party to a contract with any of them, to terminate the contract or vary its rights or obligations, merely on account of the implementation of the scheme or restructure, would undermine and frustrate the purpose of s 413(1) of the Act, which is to facilitate the reconstruction (and amalgamation) of Part 5.1 bodies. 35 In that connection, the plaintiff submitted that there is a possibility that, here, the scheme and the related transfers of property and liabilities "may trigger change of control, certain event of default or similar provisions" in contracts with companies in the Fiducian Group, enabling other contracting parties to exercise a right to terminate or vary those contracts. 36 The plaintiff further submitted that: As the current Fiducian shareholders will continue to have the same economic interest in the Fiducian group following implementation of the Scheme as they currently do, and contractual counterparties to Fiducian group contracts will not be affected by the Restructure in any practical sense (other than possibly having to deal with a different Fiducian group member), it is submitted that parties to Fiducian group contracts (including members of the Fiducian group) should be prevented from terminating or varying the terms of those contracts merely on account of change of control, event of default or similar provisions being triggered by implementation of the Scheme or Restructure. 37 The plaintiff pointed to the fact that, under a creditors' scheme of arrangement, the scheme can be used to modify, vary or release not only the debts and liabilities of the company to its creditors, but also the liability of sureties for the same debts and liabilities, for the scheme consideration provided: Fowler v Lindholm (2009) 178 FCR 563 at [68]. The plaintiff submitted that, in substance, the order sought did no more than modify or vary the rights of "contractual counterparties". 38 The plaintiff also pointed to the fact that the power conferred by s 413(1) enables a contract to be transferred even in circumstances where the contract provides that, as between parties, it cannot be assigned without consent. The plaintiff submitted that, in such circumstances, the practical effect of an order made under s 413(1) in relation to the transfer was to override the purpose of the "no-assignment" clause. 39 The plaintiff submitted, therefore, that the order sought, which deprives third parties of contractual rights, is not beyond the scope of s 413(1)(g), but is rather a necessary incident of the Court's power to ensure the achievement of the purposes of s 413, which include that reconstructions are facilitated and effectively carried out. 40 I am not persuaded that, in the circumstances of the present case, the order sought is one that falls within the power conferred by s 413(1)(g). I accept that the provision is a broad one. I also accept that what is "necessary", in the context of s 413(1)(g), must be determined by its stated object, namely, to ensure that the scheme for reconstruction or amalgamation is fully and effectively carried out. Thus, the word "necessary" takes its colour from the stated object. However, with respect, I do not think it assists to substitute "necessary" with a proxy expression, such as "more than desirable but less than vital"; nor do I think that "necessary" requires further explication. It is, after all, an ordinary English word. It is also the word chosen by Parliament to state its will. 41 Here, the plaintiff has not pointed to any specific contractual provision that would prevent the scheme for reconstruction being fully and effectively carried out. Rather, it has advocated the desirability of making the order, based on the possibility that there might be contractual provisions that are triggered by the circumstances referred to in the order, which would then enable a contracting party to terminate or vary the contract in question. 42 It seems to me that there are at least two difficulties confronting the plaintiff. First, by relying on what are truly no more than abstract or theoretical possibilities, the plaintiff has not established that the order sought is "necessary" to fully and effectively carry out the scheme for reconstruction. Secondly, assuming that a particular contractual provision will be triggered in one of the ways postulated, the plaintiff merely seeks to avoid a contractual outcome that has already been agreed upon. Whether, in such a case, a contracting party would seek to exercise the rights available to it is another matter. But, in my view, it cannot be said that the order is necessary to ensure that the reconstruction is fully and effectively "carried out". In truth, the order merely seeks to provide for the consequences of the reconstruction, not its effectuation. I do not accept that, without the order, the purpose of the restructure will be frustrated. 43 These matters also stand as reasons why, assuming power, it would not be an appropriate exercise of the Court's discretion to grant the order. In my view, the essentially abstract or theoretical circumstances advanced strongly militate against the making of such an order, particularly where there is no evidence to support the contention that the purpose of the restructure will be frustrated without it. The assumption here must be that, if the order is granted, there will be a contracting party whose rights are affected. Otherwise, there would be no purpose to be achieved by granting such an order. Presumably, as the proponent of the order, the plaintiff does not seek to avail itself of any rights it might have in that regard. I assume the same position obtains with respect to the plaintiff's related bodies corporate. But what of outsiders? Why should the Court interfere in a blanket fashion with the contractual rights which those contracting parties have bargained for and obtained to cover the very circumstances in question? The plaintiff may be right to say that the implementation of the restructure will not result in economic loss or disadvantage for those parties. But if that is so, and a contractual provision is still triggered, it simply means that the contracting party must have had its own special reasons for making its contract on that basis. These circumstances are simply not known to the Court. Thus, for discretionary reasons alone, I would not grant the order.
An aspect of proof 44 The scheme is subject to a number of conditions precedent. Clause 3.2 of the scheme provides: 3.2 Certificate (a) Fiducian and NewCo will provide to the Court on the Second Court Date a certificate, or such other evidence as the Court requests, confirming (in respect of matters within their knowledge) whether or not all of the conditions precedent in clauses 3.1(a) and 3.1(b) have been satisfied or waived. (b) The certificate referred to in clause 3.2(a) constitutes conclusive evidence that such conditions precedent were satisfied, waived or taken to be waived. 45 This provision proceeds on the basis that, at the second court hearing, the Court will need to be satisfied that, on appropriate evidence, the conditions precedent to the scheme taking effect (other than the Court's own approval and the lodgement of its order with ASIC) have been satisfied or waived, in order for the Court to favourably exercise the discretion to approve the scheme under s 411(4)(b) of the Act. 46 The question arises: if the scheme does not come into effect until it is approved by the Court and a copy of the Court's order is lodged with ASIC, what is the effect of providing a certificate answering the description of the certificate in clause 3.2 of the scheme, before the scheme comes into effect? At that stage, such a certificate certainly does not have the conclusive effect for which clause 3.2(b) provides. 47 In the present case, as in other scheme cases that have come before me, I have indicated that, at the second court hearing, the plaintiff should provide a short affidavit from an appropriate person deposing to whether the conditions precedent have been satisfied or waived. That, of course, would not be the only way of proving those matters. That said, I am not aware of any reason why the provision of proof, in that form, would be unduly burdensome. 48 In the present case, the plaintiff provided such an affidavit, signifying that the conditions precedent had been, in each case, either satisfied or waived. The plaintiff also provided a certificate answering the description of the certificate referred to in clause 3.2 of the scheme. The certificate was executed as a deed by the plaintiff and NewCo, who were parties to the scheme implementation deed from which the conditions precedent emanated. Under the deed, the parties certified, confirmed and agreed that the conditions precedent had been either satisfied or waived. On the basis of the deed itself, I would have been satisfied that the conditions precedent had been satisfied or waived. 49 By making these remarks, I do not wish to be taken as prescribing any particular mode of proof that would be necessary to satisfy the Court on these matters. My own concern has been to ensure that, at the second court hearing, appropriate evidence of satisfaction or waiver is placed before the Court. My concern has been that reliance on provisions, such as clause 3.2(b) of the scheme, is misplaced when the question before the Court is whether the scheme should be approved. This is not to question the binding effect of such clauses, as between the parties to the scheme, once the scheme itself comes into effect.
Disposition 50 Subject to the above remarks, it is appropriate that orders, substantially as sought by the plaintiff, be made. I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Yates.
Fiducian Portfolio Services Limited
Fiducian Investment Management Services Limited