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[2010] VSC 554
Supreme Court of Victoria
2010-11-26
Davies J
Original judgment source is linked above.
CORPORATIONS - Schemes of arrangement - Approval of scheme - Discretion - Corporations Act 2001 (Cth) ss 411 (11), 411(12) and 411 (17).
1 The applicant, Plantic Technologies Limited ("Plantic") seeks orders from the Court approving the schemes of arrangement made between Plantic and its shareholders ("Share Scheme") and between Plantic and its option holders ("Option Scheme"). The schemes, if approved, will result in the cancellation of all options for cash consideration and the acquisition for cash consideration of all the shares in Plantic by Gordon Merchant No. 2 Pty Ltd ("Gordon Merchant").
2 On 8 October 2010 I ordered that Plantic convene a meeting of its shareholders to consider, and if thought fit, to approve the proposed Share Scheme and a meeting of the option holders to consider, and if thought fit, to approve the proposed Option Scheme. The Share Scheme meeting and the Option Scheme meeting were separately held on 17 November 2010. On 25 November 2010 Efthim AsJ made orders pursuant to r 16.6 of the Supreme Court (Corporations) Rules 2003 that the meeting was duly convened and that the resolution considered at the meeting was duly passed.
3 The implementation of both schemes is conditional upon a number of conditions precedent being satisfied or waived. Plantic has provided certificates to the Court in accordance with cl 3.3 of the Share Scheme and cl 3.3 of the Option Scheme confirming that each condition precedent has been satisfied or waived, other than the Court's approval.
4 The role of the Court in approving a scheme is supervisory in nature. When deciding whether to approve a scheme the Court must consider whether there has been compliance with the Corporations Act 2001 (Cth) ("the Act"), whether the majority of shareholders are acting in good faith in voting in favour of the scheme and whether the scheme is one that is capable of being accepted by shareholders looking to their own commercial advantage. [1]
5 At the application for orders to convene a meeting Plantic sought a direction under s 1319 of the Corporations Act 2001 (Cth) ("the Act") in the following terms:
"that depositary interest holders may vote at the meeting by instructing the Custodian on how to vote or by requesting the Custodian to appoint them to attend and vote at the meeting on behalf of the Custodian as the Custodian's representative in relation to the shares held on trust for the particular depositary interest holder."[2]
6 I concluded that the direction was appropriate for the reasons set out in my judgment delivered on 8 October 2010.[3] No objector has appeared at the second hearing to put any contradicting argument that the direction ought not to have been made or that the votes were obtained in a manner that made them invalid.
7 I am satisfied that the orders approving the Share Scheme and the Option Scheme should be made for the following reasons:
(a) the share scheme was overwhelmingly supported by the shareholders. The requisite majority for the purposes of s 411(4)(a) of the Act was satisfied as 91.55% of the number of shareholders that were present and voting in person or proxy at the scheme meeting voted in favour of the resolution and 93.1% of the votes cast in person and by proxy at the scheme meeting were in favour of the resolution;
(b) the option scheme was overwhelmingly supported by the option holders. The requisite majority for the purposes of s 411(4)(a) of the Act was satisfied as 93.33% of the number of option holders that were present and voting in person or proxy at the Option Scheme meeting voted in favour of the resolution and 99.64% of the votes cast in person or by proxy were in favour of the resolution;
(c) the opinion of the independent expert is that both the share scheme and the option scheme are fair and reasonable and in the best interests of the shareholders and option holders respectively;
(d) the Share Scheme and the Option Scheme have the unanimous support of the board of directors of Plantic;
(e) Plantic has received a statement in writing from ASIC under s 411(17)(b) of the Act stating that ASIC has no objection to the schemes; and finally
(f) the orders are not opposed by any shareholder or option holder or by ASIC.
8 In light of these matters and having regard to the matters that I took into account in ordering the convening of the meeting, I am satisfied that it is appropriate to approve both schemes.
9 Plantic also seeks an order under s 411(12) of the Act for exemption from compliance with s 411(11) of the Act. In my view, such an order is also appropriate. There is no alteration to the Constitution and once the scheme is implemented Plantic will become a wholly owned subsidiary. The scheme will then be of historical interest only.[4]
[1] See Re Coles Group Limited (No. 2) [2007] VSC 523; (2007) 65 ACSR 494 [24], [33], [47] - [65], [68], [71] - [72], [77]; Re Lonsdale Financial Group Limited (No. 2) [2007] VSC 525 (Unreported, Robson J, 17 December 2007) [21]; Re IWL Limited [2007] VSC 530 (Unreported, Robson J, 17 December 2007) [7]; Re Mitre 10 Limited [2010] VSC 100 (Unreported, Robson J, 17 March 2010) [15]; Re Rusina Mining NL (No. 2) (2010) 78 ACSR 609 [39] - [40]; Re Lion Selection [2009] VSC 546 (Unreported, Judd J, 3 December 2009) [20] - [22].
[2] Re Plantic Technologies Ltd [2010] VSC 484 (Unreported, Davies J, 8 October 2010).
[4] Re Lion Selection [2009] VSC 546 (Unreported, Judd J, 3 December 2009) [23] - [24]; Re Cytopia (No. 2) [2010] VSC 4 (Unreported, Croft J, 15 January 2010) [19] - [20]; Re GRD Limited [2009] FCA 1595 (Unreported, Gilmour J, 24 December 2009) [36] - [38].