MDA National Ltd v Medical Defence Australia Ltd

IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION WAD 54 of 2015

IN THE MATTER OF AMCOM TELECOMMUNICATIONS LIMITED ACN 062 046 217 BETWEEN: AMCOM TELECOMMUNICATIONS LIMITED ACN 062 046 217

JUDGE: MCKERRACHER J DATE: 13 APRIL 2015 PLACE: PERTH

RELIEF SOUGHT 1 These are reasons for orders made after a first hearing in relation to a proposed scheme of arrangement on 30 March 2015. 2 The plaintiff, Amcom Telecommunications Limited, sought orders to convene a meeting of its ordinary shareholders to consider a proposed scheme of arrangement. 3 Amcom has, in accordance with the Corporations Act 2001 (Cth) (CA), consulted with the Australian Securities and Investments Commission (ASIC), the position of which, but for a requirement for certain votes to be 'tagged', is presently not to intervene.

OUTLINE OF SCHEME 4 Amcom is an Australian incorporated public company listed on the Australian Securities Exchange (ASX) with approximately 8,634 registered holders (as at 23 March 2015) of an aggregate of 266,399,148 ordinary shares. Amcom is in the business of providing internet and fibre-based telecommunications services in Australia. A Scheme is proposed between Amcom and its ordinary shareholders. The Scheme involves the acquisition of all of the shares of Amcom by Vocus Communications Limited, an Australian incorporated public company also listed on the ASX. It is proposed that: (a) Amcom shareholders will transfer their shares to Vocus; (b) Amcom shareholders will receive 0.4614 Vocus shares for each Share held on the record date; (c) the Scheme will affect the acquisition of Amcom by Vocus and will result in Amcom becoming a wholly owned subsidiary of Vocus; (d) Amcom will cease to be listed on the ASX; and (e) if the scheme meeting is convened by the Court under s 411(1) CA, and subject to shareholders agreeing to the Scheme at the scheme meeting, Amcom will procure the vesting or exchange of all Amcom performance rights.

EVIDENCE 5 Amcom relies on: (a) the affidavit of Mr Mark Anthony Paganin sworn 9 March 2015; (b) the affidavit of Mr Mark Anthony Paganin sworn 27 March 2015; (c) the affidavit of Mr David Ayers Hinton in his capacity as chief financial officer and company secretary of Amcom sworn 26 March 2015; (d) the affidavit of Mr Anthony James Grist in his capacity as chair of the scheme meeting sworn 19 March 2015; (e) the affidavit of Mr Clive Ralph Stein in his capacity as alternate chair of the scheme meeting sworn 19 March 2015; (f) the affidavit of Mr David Spence in his capacity as non-executive director and chairman of Vocus sworn 26 March 2015; (g) the affidavit of Mr Richard John Stewart in his capacity as independent expert sworn 25 March 2015; and (h) the affidavit of Mr Stephen Lomas in his capacity as investigating accountant sworn 20 March 2015. 6 The factual matters noted in these reasons are extracted from those affidavits.

STATUTORY REQUIREMENTS 7 Section 411 and s 1319 CA relevantly and respectively provide: 411 Administration of compromises etc. (1) Where a compromise or arrangement is proposed between a Part 5.1 body and its creditors or any class of them or between a Part 5.1 body and its members or any class of them, the Court may, on the application in a summary way of the body or of any creditor or member of the body, or, in the case of a body being wound up, of the liquidator, order a meeting or meetings of the creditors or class of creditors or of the members of the body or class of members to be convened in such manner, and to be held in such place or places (in this jurisdiction or elsewhere), as the Court directs and, where the Court makes such an order, the Court may approve the explanatory statement required by paragraph 412(1)(a) to accompany notices of the meeting or meetings. … (2) The Court must not make an order pursuant to an application under subsection (1) or (1A) unless: (a) 14 days notice of the hearing of the application, or such lesser period of notice as the Court or ASIC permits, has been given to ASIC; and (b) the Court is satisfied that ASIC has had a reasonable opportunity: (i) to examine the terms of the proposed compromise or arrangement to which the application relates and a draft explanatory statement relating to the proposed compromise or arrangement; and (ii) to make submissions to the Court in relation to the proposed compromise or arrangement and the draft explanatory statement. (3) In subsection (2), draft explanatory statement, in relation to a proposed compromise or arrangement between a body and its creditors or any class of them or between a body and its members or any class of them, means a statement: (a) explaining the effect of the proposed compromise or arrangement and, in particular, stating any material interests of the directors of the body, whether as directors, as members or creditors of the body or otherwise, and the effect on those interests of the proposed compromise or arrangement in so far as that effect is different from the effect on the like interests of other persons; and (b) setting out such information as is prescribed and any other information that is material to the making of a decision by a creditor or member of the body whether or not to agree to the proposed compromise or arrangement, being information that is within the knowledge of the directors of the body and has not previously been disclosed to the creditors or members of the body. … (4) A compromise or arrangement is binding on the creditors, or on a class of creditors, or on the members, or on a class of members, as the case may be, of the body and on the body or, if the body is in the course of being wound up, on the liquidator and contributories of the body, if, and only if: (a) at a meeting convened in accordance with an order of the Court under subsection (1) or (1A): (i) in the case of a compromise or arrangement between a body and its creditors or a class of creditors - the compromise or arrangement is agreed to by a majority in number of the creditors, or of the creditors included in that class of creditors, present and voting, either in person or by proxy, being a majority whose debts or claims against the company amount in the aggregate to at least 75% of the total amount of the debts and claims of the creditors present and voting in person or by proxy, or of the creditors included in that class present and voting in person or by proxy, as the case may be; and (ii) in the case of a compromise or arrangement between a body and its members or a class of members - a resolution in favour of the compromise or arrangement is: (A) unless the Court orders otherwise - passed by a majority in number of the members, or members in that class, present and voting (either in person or by proxy); and (B) if the body has a share capital - passed by 75% of the votes cast on the resolution; and (b) it is approved by order of the Court. … (6) The Court may grant its approval to a compromise or arrangement subject to such alterations or conditions as it thinks just. … (17) The Court must not approve a compromise or arrangement under this section unless: (a) it is satisfied that the compromise or arrangement has not been proposed for the purpose of enabling any person to avoid the operation of any of the provisions of Chapter 6; or (b) there is produced to the Court a statement in writing by ASIC stating that ASIC has no objection to the compromise or arrangement; but the Court need not approve a compromise or arrangement merely because a statement by ASIC stating that ASIC has no objection to the compromise or arrangement has been produced to the Court as mentioned in paragraph (b). … 1319 Power of Court to give directions with respect to meetings ordered by the Court Where, under this Act, the Court orders a meeting to be convened, the Court may, subject to this Act, give such directions with respect to the convening, holding or conduct of the meeting, and such ancillary or consequential directions in relation to the meeting, as it thinks fit.

relevant principles 8 As noted on multiple previous occasions, there are three stages to an application under s 411 CA. First, the Court approves the convening of a scheme meeting and approves the draft explanatory statement to be sent to the Scheme members (Scheme Booklet). Secondly, members vote on the proposed scheme at the scheme meeting. Thirdly, the Court approves the proposed Scheme: Re CSR Ltd (2010) 183 FCR 358 (at [7]) per Keane CJ and Jacobson J. 9 The principal questions relevant to the first stage are these: Is there a compromise or arrangement? Is there a Pt 5.1 body? Are there members of a company? Are there classes of members? Should the Court make orders to convene a meeting?

Standard of review 10 As noted in Re Integra Mining Limited [2012] FCA 1414 (at [11]), the standard of review relevant to the first hearing requires the Court to consider whether the proposed Scheme is not inappropriate and is one that sensible business people might consider is of benefit to its members: Re Sonodyne International Ltd (1994) 15 ACSR 494 per Hayne J (at 499). If the proposed arrangement is one that seems fit for consideration by a meeting of members and is a commercial proposition likely to gain the Court's approval if passed by the necessary majorities, then leave should be given to convene the meeting: Re ACM Gold Ltd; Re Mt Leyshon Gold Mines Ltd (1992) 34 FCR 530 per O'Loughlin J (at 535). The Court does not need to be satisfied that no better scheme could have been devised: Re Foundation Healthcare Ltd (2002) 42 ACSR 252 per French J, as his Honour then was, (at [44]). 11 While s 411(2) CA contains a statement of the circumstances in which a scheme meeting must not be ordered, s 411 does not contain a statement of the criteria that must be satisfied before a meeting is ordered: Re CSR Ltd per Keane CJ and Jacobson J (at 362). 12 The Court should order the convening of the scheme meeting and approve the Scheme Booklet if it is satisfied of the following matters: The proposed Scheme is an arrangement in respect of which the Court may order a meeting of the members: s 411(1) CA. That is, the Scheme is an arrangement; Amcom is a Pt 5.1 Body; the Scheme participants are members of Amcom; and the scheme meeting will be convened between members of the same class. ASIC has had a reasonable opportunity to examine the terms of the Scheme and the Scheme Booklet and make submissions to the Court in relation to those matters: s 411(2)(b) CA. The Scheme Booklet provides adequate disclosure (s 412(1)(a)(i) CA) and contains the prescribed information: s 412(1)(a)(ii) CA, r 5.1.01; Sch 8 cll 8301 - 8310 of the Corporations Regulations 2001 (Cth). The procedural requirements of the Federal Court (Corporations) Rules 2000 (Cth) have been met. There is no apparent reason why the Scheme should not, in due course, receive the Court's approval if the necessary majority of votes are achieved: Integra Mining (at [12]) and the cases there cited.

Arrangement 13 The term 'arrangement' is of wide import, as was observed by Santow J in Re NRMA Ltd (No 1) (2000) 156 FLR 349 (at [20]). 14 The Amcom board unanimously recommends that, in the absence of a superior proposal, Amcom shareholders vote in favour of the Scheme at the proposed scheme meeting. 15 PricewaterhouseCoopers Securities Ltd (ACN 003 311 617), an independent expert appointed by the Amcom board to assess the Scheme, has prepared a report and concluded that the proposal is in the best interests of Amcom shareholders. 16 Critically, it is for the members to decide if they should accept the terms of the Scheme, as amended. The Scheme is bona fide and is properly proposed. As the Full Federal Court observed in Re CSR Ltd (at [64] - [65]), it is not the appropriate time at the first Court hearing to determine whether the scheme would ultimately be approved by the Court. 17 The proposal before the Court is an arrangement.

Part 5.1 Body 18 Section 411 CA confers jurisdiction on the Court in respect of a Pt 5.1 body. 19 The term 'Part 5.1 body' is defined in s 9 CA to mean, relevantly, a company. Amcom is a company.

Classes of members 20 An arrangement to which s 411(1) applies is one between a company and its members or any class of them. It is only such an arrangement to which the Court may grant its approval pursuant to s 411(6) CA. 21 Section 411 does not define the term 'class'. However, as noted by Bowen J in Sovereign Life Assurance Co v Dodd [1892] QB 573 (at 583), the term ought to be given such a meaning: … as will prevent the section being so worked as to result in confiscation and injustice, and that it must be confined to those persons whose rights are not so dissimilar as to make it impossible for them to consult together with a view to their common interest. 22 In the case at hand, there is a single class of shareholders. Amcom members have the same rights attaching to their shares. Therefore in the proposed Scheme, Amcom members have the same right to receive the Scheme consideration.

Foreign shareholders 23 Amcom shareholders who have an address on the share register outside Australia (and its external territories) and New Zealand are considered ineligible foreign shareholders under the Scheme unless Vocus is otherwise satisfied that the laws of the relevant country of residence permit the issue of shares in Vocus. 24 The ineligible foreign shareholders will have the Vocus shares they would otherwise be entitled to receive under the Scheme issued to a nominee appointed by Vocus. The nominee will sell those shares that would otherwise be issued to ineligible foreign shareholders on-market and in good faith within 15 business days of the implementation date. The nominee will transfer the proceeds to Vocus, less any applicable brokerage, stamp duty, and other selling costs, and taxes, who will remit them to each respective ineligible shareholder in accordance with their entitlement.

UNUSUAL ASPECTS OF THE TRANSACTION RAISED FOR COURT'S CONSIDERATION 25 In light of the ex parte nature of the hearing and the disclosure principle described by Barrett J in Re Permanent Trustee Co Ltd (2002) 43 ACSR 601 (at [7]), there were a number of aspects of the transaction which Amcom brought to my attention. The overall submission of Amcom, which I accepted, was that none of the matters that follow should be of concern to the Court.

Performance Rights 26 Amcom has 4,185,000 unlisted performance rights issued under the Amcom Performance Rights Long Term Incentive Plan (Performance Rights Plan) where each performance right constitutes a right to receive an Amcom share (Amcom Performance Rights). There are three tranches of Amcom Performance Rights with differing expiry dates. Relevantly, there are: (a) 1,025,000 Tranche D performance rights with an expiry date of 30 June 2015; (b) 1,060,000 Tranche E performance rights with an expiry date of 1 September 2016; and (c) 2,100,000 Tranche F performance rights with an expiry date of 31 January 2018 (1,580,000 of which were issued after the date of the scheme implementation agreement (SIA)) (Additional Performance Rights). 27 Each performance right has various vesting conditions as determined by the Amcom board, and there is no attaching exercise price. 28 By 8.00 am on the second Court date, arrangements are to have been put in place and all necessary regulatory approvals are to have been obtained so that all Amcom Performance Rights outstanding as at 17 December 2014 will either vest or have lapsed, or, in the case of the Additional Performance Rights, legally binding agreements to acquire or cancel the Additional Performance Rights for consideration have been executed by each of the holders of those Additional Performance Rights. 29 This is to be achieved through the Amcom Board resolving that, subject to the requisite majorities of Amcom Shareholders approving the Scheme at the scheme meeting. All Amcom Performance Rights belonging to Tranche D, Tranche E and Tranche F that are held by Amcom's chief executive will vest, and 50% of the Additional Performance Rights will vest. 30 In relation to the remaining 50% of the Additional Performance Rights, Amcom is to enter into legally binding agreements with the relevant Amcom Performance Rights holders and Vocus, as applicable, to ensure that, subject only to the requisite majorities of Amcom shareholders approving the Scheme at the scheme meeting, those Additional Performance Rights are either acquired by Vocus or cancelled for consideration, which must comprise of such number of performance rights in Vocus to be calculated by multiplying an adjusted merger ratio by the number of Additional Performance Rights held by that person, and, subject to certain exceptions, be on terms no less favourable than the terms of the Additional Performance Rights. 31 To the extent that a member also holds Amcom Performance Rights issued under the Performance Rights Plan, that member will receive no different consideration because the conversion of that member's performance rights only gives an entitlement to a greater share of the scheme consideration. An Amcom Performance Rights holder whose rights automatically vest will be treated as a member, will be recorded as a member on the record date, and will share in the scheme consideration. The receipt of such amounts does not result in a member receiving a right or benefit under the Scheme that is different to other members, and the amount is received as holder of, and in exchange for, performance rights. 32 After consultation with ASIC, the plaintiff intends to identify to the Court at the next hearing those votes cast on the Scheme by the holders of Amcom Performance Rights. This is the usual form of 'tagging' process undertaken to allow the Court to identify which votes have been cast by the holders of Amcom Performance rights at the scheme meeting.

Deal protection clauses 33 Amcom and Vocus have entered into a number of deal protection mechanisms under the SIA.

Break fee 34 Pursuant to the SIA, Amcom is required to pay Vocus a break fee of $4 million if the Scheme is not implemented and: (a) a superior proposal is publicly announced or made before the effective date or the termination of the SIA, whichever occurs first, and, within twelve months from the date of the SIA, that third party acquires voting power in more than 50% of the Amcom shares or otherwise completes the transaction; (b) at any time prior to the second court date, any director of Amcom publicly changes, withdraws or modifies their recommendation of the proposed transaction, does not recommend that Amcom shareholders approve the Scheme in the explanatory booklet or makes any public statement to the effect that the Scheme is not, or is no longer recommended; except in circumstances where Amcom is entitled to terminate the SIA under cl 10.1(a)(ii) or cl 10.1(a)(iii), or the independent expert concludes that the Scheme is not in the best interests of Scheme shareholders; (c) Vocus terminates the SIA in accordance with cl 10.1(a)(ii), i.e. a material breach of a representation or warranty; (d) an Amcom material adverse change occurs prior to 8.00 am on the second court date (except if the Amcom material adverse change occurs as a sole result of a change in any applicable law) and Vocus terminates the SIA in accordance with clause 10.1(a)(iii); or (e) an Amcom prescribed occurrence occurs prior to 8.00 am on the second court date and Vocus terminates the SIA in accordance with cl 10.1(a)(iii). 35 Amcom submits, and I accept, that the break fee is not, relatively speaking, excessive and will not operate coercively as: (a) the break fee will not be payable where the Scheme becomes effective; (b) the break fee is considerably less than the 1% guideline given by the Australian Takeovers Panel Guidance Note 7; (c) Vocus is also subject to a $4 million break fee under certain circumstances; (d) the break fee has been negotiated at arms length; and (e) there has been full disclosure of the break fee in both the SIA and the Scheme Booklet. (See Re APN News & Media Ltd (2007) 62 ACSR 400 per Lindgren J (at [55]) and Re Rusina Mining NL [2010] FCA 517 per Barker J (at [52]).)

Exclusivity provisions 36 Clause 13 of the SIA is an exclusivity provision which includes 'no shop' and 'no talk and no due diligence' sub-clauses. It provides that: 13.1 No shop During the Exclusivity Period, each of Amcom and Vocus must not, and must ensure that its Authorised Persons do not, except with the prior written consent of the other party, solicit, invite or encourage any Competing Proposal or initiate discussions with any third party with a view to obtaining any expressions of interest, offer or proposal from any person in relation to a Competing Proposal. 13.2 No talk and no due diligence Subject to clause 13.3, during the Exclusivity Period, each of Amcom and Vocus must not and must ensure that its Authorised Persons do not, except with the prior written consent of the other party: (a) participate in any negotiations in relation to a Competing Proposal or which may reasonably be expected to lead to a Competing Proposal; (b) enter into any relevant agreement in connection with a Competing Proposal; or (c) provide any information to a third party for the purposes of enabling that party to make a Competing Proposal." 37 In respect of such provisions, in Re Arthur Yates & Co Ltd (2001) 36 ACSR 758 Santow J (at [9]) held that an exclusivity clause must satisfy the following concerns: (a) it should be for no more than a reasonable period capable of precise ascertainment, hence the need to ensure that any exclusivity period is properly defined; (b) while an exclusivity clause may differentiate between actively soliciting an alternative merger proposal or simply dealing with an unsolicited one, in either case it is important that such an exclusivity clause be framed so that it is subject to the overriding obligation not to breach the directors' fiduciary duties or be otherwise unlawful; and (c) there should be adequate prominence given to that constraint in the explanatory memorandum sent to shareholders. 38 The exclusivity period is capable of precise ascertainment. 'Exclusivity Period' is defined at cl 1.1 of the SIA as being the period from the date of the SIA, 17 December 2014, and the earlier of the 'Implementation Date', which occurs after Court approval of the Scheme, termination of the SIA, or the 'End Date', being 31 May 2015 or other such date agreed upon by Amcom and Vocus. 39 The exclusivity clauses are subject to the overriding obligation not to breach the directors' fiduciary and statutory duties under the 'fiduciary carve-out' in cl 13.3 of the SIA. 40 There is clear disclosure of the exclusivity provisions at cl 13 of the SIA and para 8.8(c) of the Scheme Booklet. In addition, the provisions were negotiated by the parties with the assistance of legal firms recognised as practising in the mergers and acquisitions area.

Convening shareholder meeting 41 Amcom proposes to convene a meeting of shareholders ordered by this Court in accordance with Pt 2G.2 CA and the terms of its constitution. In particular, Amcom will deem that a notice sent by post is given on the second business day after the date of its posting, in accordance with its constitution.

Electronic despatch of documents 42 Where a shareholder has nominated to receive electronic notices from Computershare Investor Services Pty Limited on behalf of Amcom, Amcom proposes to despatch the Scheme Booklet and the proxy form, being the relevant documents that all Amcom shareholders will receive, to the electronic mailing address nominated by that shareholder. 43 Amcom's Constitution provides that a notice to shareholders may be sent by sending it to the electronic address (if any) nominated by the shareholder or by sending it by other electronic means (if any) nominated by the shareholder. 44 3,271 shareholders have nominated to receive electronic notices from Computershare on behalf of Amcom. Amcom's primary method of serving notices on these shareholders is by way of electronic means via Computershare. 45 The cumulative effect of ss 249J(3), 249J(3A), 412(1) and 1319 CA allows the Court to give such orders as to provide the electronic despatch of a scheme booklet: see Re Alinta Limited (No 2) [2007] FCA 1378 per Emmett J; MDA National Ltd v Medical Defence Australia Ltd [2014] FCA 954 per Yates J (at [105]). 46 In the event that, after despatch to an electronic mail address, Computershare receives a 'bounce-back' message indicating that the notice has not been delivered, Computershare will attempt to send the email with the attached documents again. Where a second 'bounce-back' notice is received, Computershare will send, by prepaid post, copies of the relevant documents to that shareholder's registered address. 47 Where Amcom shareholders have not nominated to receive electronic notices, Amcom will issue the notices as contemplated either by prepaid post or by prepaid air courier, as the case may be.

Risk and title 48 'Performance risk' is addressed by timing the provision of the Scheme consideration such that it must be provided before the transfer of Amcom shares from Amcom to Vocus takes place. Further, Vocus will enter into a deed poll pursuant to which it promises to pay or procure payment of the scheme consideration to each scheme shareholder. 49 The scheme document provides that Vocus will transfer the scheme consideration with clear title. A clause to this effect was approved by Lindgren J in Re Investa Properties Limited [2007] FCA 1104 (at [22] - [30]). There is, in all the circumstances, no significant performance or credit risk in this case: see, for example, Re APN News per Lindgren J (at [23]).

Deemed warranty 50 The Scheme document provides for a shareholder warranty that the shares are transferred free of encumbrances. The terms of this deemed warranty are in substantially similar terms to those in Re APN News and Re ABB Grain Ltd [2010] FCA 1309. In Re APN News Lindgren J stated (at [57]-[63]) that a deemed warranty is no more than a device directed to ensuring that a scheme participant whose shares are subject to an encumbrance is not unfairly disadvantaged. Secondly, Lindgren J required the attention of scheme participants to be drawn to the existence of the deemed warranty in the scheme (at [63]). This approach was subsequently approved in Re ABB Grain Ltd per Besanko J (at [34]-[39]) and in Re oOh!Media Group Ltd [2012] FCA 26 per Yates J (at [27]).

ASIC'S CONSIDERATION 51 The jurisdiction of the Court to make an order convening meetings under s 411(1) is conditional upon the matters set out in s 411(2) CA. Section 411(2) requires that the Court be satisfied of two matters before making an order. First, that ASIC has been given 14 days notice of the hearing, or such lesser period of notice as the Court or ASIC permits: s 411(2)(a) CA. Second, that ASIC has had a reasonable opportunity to examine the terms of the scheme and the draft explanatory statement and to make submissions to the Court: s 411(2)(b) CA. 52 The Scheme Booklet was lodged with ASIC on 6 March 2015. Notice of the date and time of the hearing was given to ASIC on 23 March 2015. 53 ASIC's position follows a period of consultation and review of the documents since the date of first lodgement. 54 By letter from ASIC produced on the morning of the first hearing, ASIC confirmed it had received the requisite notice under s 411(2)(a) CA and confirmed its usual policy to not appear at the first hearing, but made the following observations: ASIC's current intention in relation to the scheme ASIC notes that some performance rights in the Company will vest immediately following approval at the scheme meeting by shareholders. These performance rights would not yet have vested if not for the Scheme. As a consequence of an additional commercial interest to the remaining shareholders because of the shares that those performance right holders will receive (having a value in the range of $2,898,000 to $55,200), the Company has agreed to tag the votes of the performance right holders (where they are also shareholders voting at the Scheme meeting) or the relevant related entities through which the performance rights are held, and provide relevant material to the Court and ASIC on the voting of the Scheme as soon as reasonably possible after the Scheme meeting. … In addition to the holding of performance rights, ASIC notes that Mr Clive Stein, Amcom's Managing Director and CEO, has an entitlement to 12 months' base salary if he elects to terminate his employment within 12 months of the implementation of the Scheme pursuant to the terms of his executive services agreement dated 25 September 2014. This entitlement would not be available to Mr Stein if not for the Scheme. As a consequence of this additional commercial interest to the remaining shareholders, the Company has agreed to tag the votes of Mr Stein, or the relevant related entities through which the performance rights are held, and provide relevant material to the Court and ASIC on the voting of the Scheme as soon as reasonably possible after the Scheme meeting. Finally, ASIC notes that the Company's shares in which Vocus Communications Limited (Vocus) has a relevant interest are not registered in Vocus' name. The Company has advised ASIC that in the event the registered holder of those shares votes its shares, the Company will count those votes separately by ballot and bring the fact that the registered holder has voted its shares at the Scheme meeting to the attention of the Court at the Second Court hearing. On the basis that: 1. the votes of Mr Stein and the other performance right holders (where they are also shareholders voting at the Scheme meeting) are 'tagged' and relevant material is provided to the Court and ASIC on the voting of the Scheme as soon as reasonably possible after the Scheme meeting, and 2. votes cast by the registered holder of shares in which Vocus has a relevant interest are counted separately by ballot and the fact that the registered holder has voted its shares at the Scheme meeting is brought to the attention of the Court at the Second Court hearing, ASIC does not currently propose to appear to make submissions, or intervene to oppose the Scheme at the first hearing under s 411(1) of the Corporations Act. This current intention is based on ASIC's examination of the terms of the Scheme and the draft explanatory statement in accordance with our policy is RG 60. It is also based on information available to ASIC as at the date of this letter on the matters that ASIC will have regard to before it will state that it has no objection to a scheme under s 411(17)(b) of the Corporations Act. These matters are set out in RG 60. ASIC's position may change if further information becomes available. ASIC is not responsible for the contents of the draft explanatory statement. Although ASIC has reviewed the draft explanatory statement in accordance with our policy in RG 60, ASIC has not verified the information in the draft explanatory statement either as to accuracy or as to whether there may be additional information that is relevant to the Scheme that may need to be disclosed in the draft explanatory statement. ASIC has not formed any view as to the merits of the Scheme or as to how members should vote. 55 By a further written undertaking from Mr Hinton, company secretary and chief financial officer of Amcom, produced at the first hearing, I was informed that the necessary 'tagging' would be undertaken and that evidence of this process would be supplied to the Court prior to the second hearing. Obviously, ASIC would also need such evidence in a timely fashion to enable it to consider the impact, if any, of the tagged votes.

PROPER DISCLOSURE 56 The Scheme Booklet meets the disclosure requirements of s 411(3) and s 412, ASIC Regulatory Guide 60, the takeover and prospectus provisions CA and Sch 8 of the Corporations Regulations. 57 Amcom's directors consider the contents of the Scheme Booklet to be accurate insofar as statements of fact relate to Amcom. There is evidence that Vocus undertook verification of the accuracy of the statements in the Scheme Booklet.

CONCLUSION 58 The paperwork in support of the application has been comprehensive. The following orders will be made:

1. Pursuant to section 411(1) of the Corporations Act 2001 (Cth) (Act): a. the plaintiff convene a meeting of the holders of its ordinary shares (Shareholders) (Scheme Meeting) for the purpose of considering, and if thought fit, approving a scheme of arrangement (with or without modification) proposed to be made between the plaintiff and the Shareholders (Scheme), being the scheme substantially in the form set out in Annexure D of the scheme booklet, containing the explanatory statement, in relation to the Scheme which is annexure MAP6 of the affidavit of Mark Anthony Paganin sworn 27 March 2015 in the proceeding (Scheme Booklet); b. the Scheme Meeting be held at 11:00am (AWST) on 6 May 2015 at The Duxton Hotel, 1 St Georges Terrace, Perth, Western Australia 6000; c. Anthony James Grist, or failing him, Clive Ralph Stein, be the chairperson of the Scheme Meeting and report the result of the Scheme Meeting to this Court; and d. the chairperson appointed to the Scheme Meeting have the power to adjourn the Scheme Meeting in their absolute discretion for such time that the chairperson considers appropriate.
2. Pursuant to section 1319 of the Act, Rule 2.15 of the Federal Court (Corporations) Rules 2000 (Cth) (Corporations Rules) shall not apply to the Scheme Meeting, except in so far as that rule applies regulation 5.6.13 (without the form 530 stipulated therein) of the Corporations Regulations 2001 (Cth) to the Scheme Meeting. Subject to these Orders and pursuant to section 1319 of the Act, the Scheme Meeting is to be: a. convened, held and conducted in accordance with the provisions of Part 2G.2 of the Act that apply to members of a company and the provisions of the plaintiff's constitution that are not inconsistent therewith and that apply to meetings of members; and b. convened using the notice of meeting in the form or to the effect of the notice contained in Annexure F of the Scheme Booklet.
3. Pursuant to section 411(1) of the Act, the explanatory statement contained in the Scheme Booklet is approved for distribution to the Shareholders.
4. Subject to registration of the Scheme Booklet with the Australian Securities & Investments Commission (ASIC) pursuant to section 412(6) of the Act, the plaintiff is to dispatch, on or before 2 April 2015, a document substantially in the form of the Scheme Booklet, a proxy form, and a reply-paid envelope addressed to Computershare Investor Services Pty Limited to each Shareholder on the plaintiff's register of members (Register) to the relevant address set out in the Register by: a. in the case of each Shareholder who has a registered address in Australia, prepaid post; b. in the case of each Shareholder who has a registered address outside Australia, prepaid airmail or air courier; and c. in the case of each Shareholder who has nominated an electronic address for the purposes of receiving notifications of notices of any meeting from Computershare Investor Services Pty Ltd, by email to the email address nominated by that Shareholder.
5. Dispatch of the documents referred to in paragraph 4 of these Orders in accordance with its terms is to be taken to be sufficient notice of the Scheme Meeting.
6. The time by which the Shareholders must return their proxy forms for the Scheme Meeting is 11:00am (AWST) on 4 May 2015.
7. All voting at the Scheme Meeting be by poll declared by the chairperson.
8. All votes cast by holders of performance rights in Amcom be identified by affidavit evidence filed by the s 411(6) hearing .
9. If the matter is relisted, the plaintiff is to give notice of the hearing of the application pursuant to section 411(4) of the Act and that notice of the hearing of an application pursuant to subsection 411(4)(b) of the Act for orders approving the Scheme be published once in "The Australian" newspaper by an advertisement substantially in the form of Annexure A to these Orders, such advertisement to be published on or before 7 May 2015 and the plaintiff be otherwise exempted from compliance with Rule 3.4 of the Corporations Rules.
10. The proceeding be adjourned to 13 May 2015 at 10:15am before Justice McKerracher for the hearing of an application to approve the Scheme.
11. These orders be entered forthwith. I certify that the preceding fifty-eight (58) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher.

Associate: Dated: 13 April 2015 Annexure A Amcom Telecommunications Limited Notice of Hearing to Approve Scheme of Arrangement pursuant to section 411 of the Corporations Act 2001 (Cth) To all members of Amcom Telecommunications Limited ACN 062 046 217 (Amcom) TAKE NOTICE that at 10:15am on 13 May 2015, the Federal Court of Australia at Peter Durack Commonwealth Law Courts Building, 1 Victoria Avenue, Perth WA 6000 will hear an application by Amcom seeking the approval of the scheme of arrangement between Amcom and its ordinary shareholders, as proposed by a resolution passed by the meeting of ordinary shareholders held at The Duxton Hotel, 1 St Georges Terrace, Perth, Western Australia 6000 at 11:00am (AWST) on Wednesday, 6 May 2015. If you wish to oppose the approval of the above arrangement, you must file and serve on Amcom a notice of appearance, in the prescribed form, together with any affidavit which you wish to rely on at the hearing. The notice of appearance and affidavit must be served on Amcom at its address for service by no later than one day before 12 May 2015. The address for service of Amcom is c/- Clayton Utz, Level 27, QV.1 Building, 250 St Georges Terrace, Perth WA 6000 (Reference: Cameron Belyea) Facsimile: 08 9481 3095 Email: cbelyea@claytonutz.com. A copy of the Scheme Booklet is available from the ASX's website at www.asx.com.au.